FeeX Makes One Of The Most Time-Consuming Processes For Financial Advisors Take Only A Few Minutes

Fees are one of those things that are easy to not think about. After all, how much is a small fee, say 1 percent, really going to cost you?

But left unchecked, fees can really add up over time, especially as returns compound. This is especially true in your retirement account.

That’s where a company like FeeX comes in. They call themselves “The Robinhood Of Fees” due to their ability to monitor your retirement accounts—specifically 401(k)’s and IRA’s—and help you find hidden fees.

The service also expands to financial advisors, by making it easier to compare retirement products they recommend to clients, as well as stay above board with regulations.

To learn more about how FeeX works to make advisors’ lives easier, we caught up with its head of business development, Dave Goldman.

Benzinga: Tell me about FeeX and its mission.

Dave Goldman: FeeX has been around since 2012. The core of what we do is we’re a financial account analysis company. We take a variety of financial accounts, whether that’s complex retirement accounts or brokerage accounts, and we run in-depth financial analysis on those accounts, primarily to serve financial advisors and institutions in providing better advice to their end clients.

Another one of the core challenges we’re solving for is a new regulation, which is the Department of Labor fiduciary rule. This rule requires a financial advisor who’s giving any sort of advice on a retirement account to give an in-depth analysis and comparison before providing any sort of advice. What our company and our technology does is analyze these disclosure documents and analyze the account on the participant level to give the advisor all the data they need to provide a recommendation.

Benzinga: Are all of these services performed by algorithms or people?

Dave Goldman: It’s a combination. We’ve spent the last six years building technology and algorithms to facilitate this process, but as with all financial products, there are outliers and nuances, so we have a team of financial analysts that can intervene when necessary.

Benzinga: So what’s the benefit for an advisor to use FeeX? I imagine a lot of those fees are where they make their money.

Dave Goldman: Advisors are typically using our platform as part of their prospecting or conversion cycle. So a financial advisor is going to meet with a current client or current prospect and they’re going to connect to their held-away assets.

They’re going to look at those assets and we’re going to provide the analysis, saying that “At XYZ account at ABC brokerage, you may have not realized this, but this is what you’re paying on your old 401(k) and your brokerage account.” And the advisor can use that as part of their pitch to show the client what their proposal would look like, fees being one of the more challenging considerations to understand.

Oftentimes, advisors are looking at proprietary products such as retirement plans that they don’t have access to. So the advisor that is making a pitch to this client might not have a good picture of the held-away assets, and we give them insights into those assets to craft a pitch around them.

Benzinga: I thought the Trump administration repealed the fiduciary standard. How are regulations in financial advising changing, and how does FeeX fit in?

Goldman: What actually happened is the [Department of Labor fiduciary] rule got phased in in two parts. One phase dealt with the impartial conduct standard, which requires that advisers act in the best interest of their clients and that they do these analyses before offering any advice on retirement accounts. That went into effect June 9 and stays in effect.

The second phase that was supposed to go into effect and was then delayed is called the best interest contract exemption, which is the legal teeth behind the rule. The piece that FeeX solves for went into effect June 9 and stays in effect.

Benzinga: I feel like the fintech companies with longevity are those that are solving problems no one thought were solvable in financial services — I’m sure no one thought advisor fees were going to be reduced or go away, but here we are.

Goldman: It’s more than just fees if you think about it. It’s fees, it’s asset allocation, it’s investment lineup, past returns. Also, the compliance aspect of what we’re doing in addition to the prospecting/sales aspect, the fiduciary rule created a new challenge for advisors.

As of June 9, 2017, if you recommend that a client rollover a 401(k), you need to do this in-depth fee and service comparison. It is quite complicated to do these analyses, because the data the Department Of Labor requires you base the analysis on — it’s called a 404a5 document, it’s a pdf provided to the participants — the plan that can be 100+ pages. Advisors need to understand that entire document and understand how it affects the person they’d be advising, and create an analysis and comparison.

That’s possibly a day or two of work for an advisor, if they could get all the data. What our platform does on the compliance side is does all that for the advisor. They get all that analysis back and saves them a day or two of work, which lets them focus on building their business.

Benzinga: What were some of your big wins in 2017 and what are you looking forward to in this year?

Dave Goldman: In 2017, we brought on a lot of Fortune 100 clients to the platform and we officially launched our FeeX for advisors platform, which is the platform that they’re licensing. We also have a FeeX for custodians platform, which is our way to allow financial firms to use our technology to communicate directly with their clients online. We have some exciting things coming up in that space, as well.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.