Talk about sticker shock.
Individual retirement accounts, which are the widely used retirement savings vehicle in America, cost consumers $43 billion in fees in 2012, according to a startup called FeeX that launched in the U.S. Tuesday to bring awareness to that price tag.
FeeX uses software to track how much consumers are paying for their retirement funds, and displays the results on its website.
"It's very important to us as a company to help the consumer start to understand the real cost of investment," says Yoav Zurel, the company's chief executive. "Consumers don't know what they are paying."
FeeX will display the dollar amount and percentage users pay in fees for their IRAs — including displaying their data on a damage meter.
FeeX uses Yodlee's software to pull in a user's IRA accounts. It plans to offer the service for 401(k) plans next.
Providing data visualization of a consumer's data to reveal what products are costing over time is an emerging fintech trend. Moven, an app connected to a debit card powered by CBW Bank, sends alerts to users designed to show them how much they spent on coffee in a given week, for example. BillGuard offers an app that crowdsources financial data to help users spot improper charges.
Like BillGuard, FeeX's software comes with a crowdsourcing twist — it crunches data to show users what other people are paying compared to what they are paying.
FeeX does not charge consumers other than collecting their data. Looking ahead, Zurel says he could monetize the company by charging businesses for usage.
"FeeX is to meant humanize finance and make it something you understand," Zurel says. "You don't need to be a rocket scientist to understand you should be aware of the price you are paying."