Detect Hidden Fees

When clients go to Shirley Mueller, MD, for help, it's so she can find the less-than-transparent fees that they are paying to brokers or financial advisors. But there is now a way for anyone to try to do this on their own.

“No-finance-degree-needed; charts and tools crunch the numbers so you don’t have to.”

— from SigFig.com

When clients come to me for help, it’s easy for me to find the less-than-transparent fees that they are paying to their brokers or financial advisors. This is one of the ways I can assist them in making money — by eradicating these unnecessary charges.

But for people who aren’t my clients, there is now a way for them to try to do this on their own through a recently available website called SigFig.com.

The site advertises that it will uncover and eliminate fees that are not apparent. It promises also to determine if a financial advisor is charging excessively. Additionally, it claims bank level security.

A ready perception is that there is little to lose by using the site: it is free. The only requirement of the participant is that she or he does have to spend time entering data. Relinquishing personal financial information also is a barrier for many.

Nevertheless, this is how it works. After going to the site, there is a 30-second tour. Then, the enquirer is asked to sign up for the service, which includes personal financial information. If she or he is too cautious to do so after spending 30 seconds on the site, there is an option to go to “features” which displays a bit more information.

The most positive feature of the site is that those who participate glean free information about hidden fees. The portfolio analysis promised is less helpful. It is already included on most brokerage firm’s websites.

The most negative aspect of the site is that personal financial information has to be transferred to an internet business where contact with a human seems difficult, if not impossible. The team in charge consists of two very young and two middle-aged members. All have stellar credentials, but their age bespeaks their general experience (at least for the two young men). However, they have engaged some older folks (about one-third to half) to be among their board members, investors, and advisors.

For me, personally, I’m afraid of the site and chose not to proceed beyond the 30-second tour and the features section, even on a trial basis to write this column. Though it promises to sync with an IRA, brokerage or financial advisor account free, there are still many unknowns. What if the user decides she or he doesn’t want the service? Is the ability to unlink easy or difficult? There are a multitude of other glitches that could occur and as far as I can tell no human to help with such a problem. Until that occurs, even a trial seems risky.

Physicians who read this column will no doubt remember that some of us didn’t prescribe new drugs until they had been used for a few years and the “bugs,” so to speak (including some unexpected deaths), worked out.

SigFig could be akin to that situation. Maybe a few years under the belt of this startup will be just what the doctor ordered.