Saving money on retirement fees


When the Israeli crowdsourced traffic app Waze was acquired by Google for close to $1 billion last year, co-founder Uri Levine had a choice to make: Continue with his creation at Google or look for the next sexy segment to be democratized by the power of the crowd. He chose to move on.

Levine’s latest product, FeeX, is just about ready to take the United States by storm, after having been live in Israel for the last year. The subject of his new venture sounds anything but sexy: analyzing your investment and retirement accounts.

But this is a project with Levine as co-founder and chairman, after all. The twist is that FeeX (feex.com) doesn’t just dig into where you’ve put your money; it teases out the hidden fees. And the results can be shocking. In America, fees associated with retirement funds come to around $600 billion a year.

“The majority of Americans are paying over a third of their retirement savings to fees alone,” FeeX co-founder and CEO Yoav Zurel said.

FeeX estimates that the average American household pays $155,000 in mostly hidden 401(k) fees over the lifetime of the account. The numbers are similar in Israel.

Levine stumbled onto the idea for FeeX when he noticed a $250 annual charge on his bank statement earmarked for “guarding” his securities. Guarding is a remnant from the past, when banks put the paper documents signifying your holdings in a guarded vault. Back then, there was infrastructure and electricity to be paid. But now everything is just bits in the cloud.

Levine sent an email to his bank, which quickly refunded his money — long before Waze made him a well-known high-tech figure.

Levine realized that this was just the tip of the hidden-fees iceberg. And if it was so easy for him to get his money back, maybe he could help other consumers do the same thing.

Levine didn’t dream up FeeX alone; post-Waze, he mentored a group of students at the Zell Entrepreneurship Program at the Interdisciplinary Center in Herzliya. Levine’s students Zurel, David Weisz and Eyal Halahmi hatched the startup together. Levine was so excited by what they’d created that, when the program ended, he invested $100,000 of his own money.

That was two years ago. Since then, 75,000 people in Israel and the U.S. have had their retirement funds analyzed by FeeX. The system is surprisingly simple to use.

In the U.S., simply give FeeX the login credentials for any accounts you want analyzed. FeeX feeds that information to Yodlee, a super-secure financial platform that powers nine out of the top 15 U.S. banks. Within minutes, FeeX generates a report showing how much you have in each account, in what stocks or mutual funds your money is invested, and how much you’ll pay in fees in the next 90 days and until your retirement.

To the right of each line is a link reading, “Reduce fee by …” and then a certain percentage. Click it and a number of similar funds appear that have lower fees. Print out or generate a PDF of the report to send to your broker or — as is the case for most Americans managing their retirement accounts — make the changes yourself.

FeeX uses crowdsourcing to see what funds people are invested in and to cross-check data to make its recommendations smarter. One of the biggest chunks of usually hidden fees, Zurel explained, is what’s paid out to management and financial advisers. Based on what others are paying, FeeX can inform the user how much he or she may be overpaying. It’s up to the account owners to negotiate down fees with their banks and management advisers. FeeX generates a sample letter to get the ball rolling.

In Israel, it’s a bit more complicated. There’s no Yodlee in the Holy Land, so users have to download a copy of their account statements, then upload them to FeeX. Then the program can work its magic and make recommendations. Because Israelis hate to be freiers (a Hebrew pejorative for “sucker”), there’s a large graphic on the Hebrew site called the “Sucker Meter,” in case you were hesitant about writing to your bank.

Zurel said FeeX has saved users in Israel and the United States more than $300 million to date.

FeeX is free, in keeping with Levine’s past experience with Waze, where building a dedicated, enthusiastic user base came before advertising, paid premium services and eventually a huge acquisition deal.

So, has FeeX been successful in making retirement account fees sexy? The venture capital community thinks so. The company has raised close to $10 million.

And its sights are set on more than just retirement accounts: Running the same analysis on mortgages has the potential to disrupt the lucrative business of advisers who help consumers refinance and lower their mortgage payments. It’s on the FeeX roadmap, as are credit-card statements and insurance policies.

FeeX likes to call itself the “Robin Hood of fees.”

Said Zurel: “We’re constantly trying to bring transparency to the system, to change the equilibrium point between supply and demand. Now the demand knows more.”

U.S. Treasury looking into Gov. Rendell fees from terror group


The U.S. Treasury Department is investigating speaking fees allegedly paid to former Pennsylvania Gov. Ed Rendell on behalf of a State Department-designated terrorist organization.

The Treasury Department is seeking to subpoena records of payments made by backers of the Mujahedeen-e-Khalq, or MEK, an Iranian dissident group, to Rendell for his speaking engagements on behalf of the group, the Washington Times wrote in a story published March 9.

Rendell is one of many prominent Jewish officials, including former Attorney General Michael Muskasey and Harvard Law School professor Alan Dershowitz, who speak on behalf of the MEK.

Rendell and other political officials have called for the MEK to be removed from the State Department terrorist list, claiming that there are no credible reports that it has engaged in violence in more than two decades.

Additionally, they say, the MEK, which had been harbored in Iraq by Saddam Hussein’s regime, complied with a U.S. directive and disarmed after the U.S.-led invasion in 2003. It is now vulnerable to an Iranian-tilting Iraqi government, and delisting the group would facilitate finding refuge for the 3,400 members remaining in Iraq.

The MEK has called for the overthrow of the religious leaders of the Islamic Republic of Iran. The MEK has been on the State Department terrorist list since 1997.

Academy Wants to Ease Wallet Strain


For the past couple of years, Rabbi Shimon Kashani has been concerned about Jewish education. While he saw several day schools in Los Angeles, he was worried that some students whose families couldn’t afford the fees were opting for public schools, and therefore had limited options for Jewish education.

“I found that, for many reasons, it was difficult for some people to get a Jewish education, and my work here is to make it easier for people to get a Jewish education,” said Kashani, who is the director of the Southern California Jewish Center.

So Kashani started Moses Hebrew Academy (MHA). Scheduled to open in the fall for kindergarteners through fourth-graders, MHA offers a lower-than-average tuition and generous scholarships, a new, multimillion-dollar campus, secular educational standards that Kashani said exceed Californian standards, extracurricular activities like scouting and ballet and, of course, a traditional Jewish education.

MHA hopes to appeal to families who have enrolled their children in public schools, families who can’t afford tuition at other schools and families living in the Westwood/Santa Monica area who don’t want to make the trip down to Hancock Park or Pico-Robertson in order to give their children a Jewish education.

Laurie Zimmet, MHA’s principal, said the school is not Orthodox, but strongly traditional. According to Zimmet, the school will serve kosher food, pray from a traditional siddur and teach traditional texts like Torah, Prophets and Talmud. In other words, it will have all the trappings of an Orthodox school without the moniker, in an effort to appeal both to Orthodox parents and to parents with little Jewish background who would feel alienated by orthodoxy.

“We don’t like labels,” Zimmet said. “A Jew is a Jew. We are upfront with public school parents that the school has traditional Jewish values, and for students who aren’t at the level yet [to learn those things] we will bring them to the higher level with individual attention.”

Zimmet said that, so far, parents inquiring about the school have been attracted by the “pioneer’s scholarship” a 50 percent discount on the $7,500 tuition, with further scholarships after that if needed.

“A lot of parents out there who are making six-figure incomes — very successful adults — and they are made to feel like they are poor schlubs because of the tuition these days,” she said. “When you have two, or three or four children and you are paying $15,000 per kid, before the other fees — like raffle tickets, or scrip — just to pay for tuition you would need to make $100,000, and so you have people that are making well over $200,000 asking for scholarships.”

According to Gil Graff, the director of the Bureau of Jewish Education (BJE), the average elementary school tuition is between $10,000 and $12,000, and 40 percent of students in schools are on need-based scholarships.

“It is unusual that a school would simply say off the bat, ‘Anyone who applies to this school is excused from paying half the money,'” Graff said. “That said, there are many schools, who, on a needs determination basis, do give half tuition. I would also say nationally and locally it is not uncommon that a start-up school that has no track record and no accreditation [has a] pioneer discounts incentive program to try and develop an enrollment.”

Zimmet said that the school could afford to give these tuition breaks because it already owns its $3 million Westwood campus, and will rely on Kashani’s fund-raising abilities to make up the rest of the shortfall.

Kashani told The Journal that he plans on raising funds from “the wider community” and would make up the shortfall from his own pocket if need be.

However, the BJE told The Journal that most of the schools in Los Angeles are running at a loss and rely on the community to make up the gap between tuition and running costs.

“We have day schools that in the aggregate are spending $116 million to educate 9,600 students, and they are getting in tuition $87 million, which leaves a gap of approximately $29 million,” Graff said. “There are people in Los Angeles who do respond to schools in terms of making funds available so that the school can accept children who are not in a position to pay the full tuition.”

MHA is currently engaging in an aggressive marketing campaign to get the word out about the school. In addition to advertising in Jewish newspapers and parenting magazines, it is also distributing flyers in Jewish neighborhoods and sending out flyers with non-Jewish preschool newsletters, and outside of public preschools.

Dr. Phil Liff-Grieff, the associate director of the Bureau of Jewish Education, said there was a “significant need” in the community for a school with low-cost tuition.

“Generally we [are] seeing that the price of day schools is a serious impediment to many families and there is indeed a population that is not in public school by choice,” he said. “Even in the Orthodox community, we do find families with kids in public schools, and it is those families that would be most responsive to [MHA’s] marketing approach. There are families that tell me that even with the scholarship aid available to them [at other schools] tuition is too much.”

MHA is preparing for 50 students in its inaugural year, and it expects that its classrooms will be coed until fourth grade.

“We are nervous about [being a pioneering school]” Zimmet said. “But we are way past the point of ‘feeling our way along.’ We own the property already, we have both our Judaic and English curriculums written already and we have a mission statement [of academic excellence] that we are going to stick to.”

For more information about Moses Hebrew Academy call
(310) 234-8300, or visit to www.mosesacademy.com .