If you want to invest but don’t know how, leave the complicated investment decisions to someone else you can trust. For a long time, your only option was to pick a traditional financial advisor for a big fee.
Nowadays, however, there is a new crop of automated financial advisors to choose from. So-called “robo-advisors” come at a much lower cost and include a simple, fast online sign-up process.
FutureAdvisor is one such robo-advisor, and a long-time industry player paving the path for automated, digital financial management. Continue on for a comprehensive FutureAdvisor review that discusses how it works, what it costs, and whether or not it may be a good fit for your investment management needs.
At a high level, the FutureAdvisor app manages your investments based on your age, risk tolerance, and current market conditions to give you the best investment returns possible.
Its automated trading analysis tools even go so far as to take advantage of investment losses to offset gains for a tax savings known as “tax loss harvesting.”
The entire package of investment strategies employed by FutureAdvisor are designed to give you the best long-term investment gains possible for your unique situations — and in some cases, you don’t even have to sign up for a new investment account to make it work.
The primary FutureAdvisor product is a web-based application that manages your investments to take advantage of low-cost investment funds chosen and tailored to your unique needs and retirement-planning goals.
Investment decisions are made by computer algorithms, which connect to accounts at Fidelity or TD Ameritrade.
If you don’t have an account with Fidelity or TD Ameritrade, you are given the option to create one when you sign up for FutureAdvisor. A FutureAdvisor account specialist will handle migrating your assets from your existing investment account into your FutureAdvisor account.
Because of the restriction to Fidelity and TD Ameritrade accounts, FutureAdvisor will not work with your existing investment account at any other brokerage firm. If you love your current brokerage and are not willing to change, FutureAdvisor will not work for you.
The FutureAdvisor app offers several major features for its customers:
- Automated investing: This is the core feature of the app. FutureAdvisor will make actual trades in connected accounts based on its analysis and your user profile that is completed during the sign-up process. Investments are driven by complex algorithms designed by PhD investment analysts and a team of seasoned investment advisors.
- Intelligent trading for taxes and fees: FutureAdvisor is programmed to minimize the total number of trades and focuses on low-cost index funds and ETFs to ensure you keep as many of your investment dollars as possible — rather than spend them on fees.
- Tax loss harvesting: Automated selling and purchasing to lower your tax bill every April, thanks to tax loss harvesting.
- Trades take place in an account you control: FutureAdvisor never holds your funds. They live in your connected account at Fidelity or TD Ameritrade. FutureAdvisor acts as a fiduciary investment manager while your brokerage holds your account and assets.
These features can help you make more efficient investing decisions, boosting your portfolio overall.
Using the FutureAdvisor online platform
Signing up for FutureAdvisor is simple and straightforward. Start by heading to the sign-up page, then enter your email address and a secure password.
After you are presented with the FutureAdvisor user agreement, you fill out a questionnaire that will tell the algorithm how to manage your investments. Enter your information carefully, as this determines how your hard-earned dollars are invested.
Once you fill out this simple profile, you’re prompted to either open a new investment account or connect your existing investment accounts to the FutureAdvisor platform for automated analysis.
If you are uncomfortable linking your accounts, you can also add your information manually. However, taking advantage of everything FutureAdvisor has to offer does require linking your accounts.
When you complete the setup process, you will have access to a dashboard showing your investment goals and linked account progress.
If you click on a specific goal, you are presented with best practices and ideas for improving your existing accounts. If you choose to sign up for the premium product where FutureAdvisor manages your accounts, these best practices are automatically implemented for you.
Users can also access a page of specific investment advice for your existing portfolio accounts, even those at other financial institutions that are not supported with the premium product.
Again, with the paid version of FutureAdvisor this advice is implemented automatically. However, you can access this level of information for free and manually implement FutureAdvisor’s suggestions at any brokerage.
Overall, the web platform is well-designed and easy for newbies to use.
FutureAdvisor interest rates and fees
No FutureAdvisor review would be complete without a look at the company’s fees and charges.
FutureAdvisor offers two versions of its product. The free version offers access to the views above, where you can see an analysis of your current investment portfolio and advice about how to improve it.
The second option — FutureAdvisor’s primary offering, which includes automated investment management and tax loss harvesting — has a flat fee of 0.5% of your investment account balance annually.
The 0.5% fee is billed quarterly as a 0.125% fee on total assets managed. When possible, this fee is deducted from a linked account that is not a tax-advantaged retirement account. Fee-only financial advisors often charge up to 2% annually, so compared to a human financial advisor FutureAdvisor is a bargain.
You may also incur trading fees from Fidelity or TD Ameritrade for trades in your linked accounts. There are no charges for opening or maintaining your accounts.
FutureAdvisor eligibility requirements
FutureAdvisor is open to people who are looking to invest in their future. The requirements to sign up for and use the service are that you are a legal U.S. resident between 18 and 68 years of age or older who has at least $10,000 in investable assets.
FutureAdvisor customer service
Due to the automated nature of the product, the likelihood that you will need to interact with customer service is very low. However, if you do need customer service, they can be reached through an email form on the website.
More about FutureAdvisor
FutureAdvisor was founded in 2010 and is reported to have $969 million in assets under management. Headquartered in San Francisco, California, the company raised $21.5 million in investment capital before agreeing to an acquisition by Wall Street investment management firm BlackRock in August 2015.
The company employs around 100 individuals, and was founded by Bo Lu (CEO) and Jon Xu (CTO) to apply modern portfolio theory, the Black-Litterman model, and other investment theories to client portfolios. Their aim was to give average investors access to investment advice and technologies previously reserved for only wealthy investors.
FutureAdvisor can be reached via email through its contact form. It can also be reached by phone at (800) 975-7199 or by mail at:
505 Howard St.
San Francisco, CA 94105
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