Expert Advice

How Does Rebalance Reduce Client Fees By An Average Of 52 Percent?

Mitch Tuchman, Managing Director of Rebalance IRA, on reducing client fees by 52% using low-cost index funds.

Mitch Tuchman: The way we reduce our clients’ fees by an average of 52% is first, we use low-cost index funds. By simply getting rid of all the actively managed funds in the client’s portfolio that are full of other back-ended commissions paying to brokers, we reduce those cost dramatically. The fund fees themselves go down by 60 to 80%.

Second, we run an advisory service in a very efficient way. We don’t have a brick and mortar model with hundreds of offices all over the country in well-placed locations. We use a lot of technology to make our advisors and our team much more efficient and effective.

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.