Expert Advice

How Does Rebalance Keep Fees So Low?

Mitch Tuchman, Managing Director of Rebalance, on how our firm works to  save clients tremendous amounts of money by keeping fees low.

Mitch Tuchman: We find that we’re reducing our client fees by an average of 52%, sometimes a lot more. The way that we do that is we perform a fee analysis for most of our clients, where we look at all the mutual funds that are in their account and the advisory fees and we show most of them that they are paying well in excess of 2%, 2.5%. Once we show a client that, we then show them how we’re going to bring that down well below 1% by working with us.

The first thing we do is get rid of all of the actively managed mutual funds that caused so much expense in an account and are creating part of so many bad habits in the investment industry right now. It gets rid of all the commissions, all the back ended fees, all the conflicts. We also use index funds, which are much less expensive and our advisory fee is only half a percent. We’re able to do that because we use a lot of technology in the way we run our business and it makes our investment advisors and our service team extremely efficient.

The third thing that we do is kind of like a Geico model, we go directly to our clients and we don’t have a lot of these middleman-marketing fees that so many firms have. By going directly to our clients and then asking our clients to refer friends and family to our service, we’re able to lower all the marketing expense.

Basically, we just run a very efficient business, and we use very low-cost funds, and by operating this way, we’re able to save clients a tremendous amount of money so it stays in their account growing and compounding to help fund their retirement.