FutureAdvisor Information

  • Address: 116 New Montgomery St, Suite 300, San Francisco CA 94105
  • Phone #: (800) 975-7199
  • Annual Fee:Flat annual management fee of 0.5%
  • Min Deposit Req: No

 

On this page we give you a simple FutureAdvisor review. Other websites can at times give way too much information that you end up with information overload. We like to keep our reviews simple, so here is our ‘simple but factual FutureAdvisor review.

Credibility: FutureAdvisor is a relatively new kid on the online investment advisor block, having been formed in 2010. However in the short five years that they have been in operation, they have made some very impressive progress. In 2015, they were recognized by the World Economic Forum as one of the leading technology pioneers in the world. As of 31st December 2015 they managed over 12,000 accounts and more than $695 million in assets. In August 2015, FutureAdvisor announced its intent to be acquired by  multinational investment management corporation, BlackRock Inc.

Website:

Assets Under Management: $695million (at time of writing

Minimum Investment amount: None to link accounts and get free portfolio analysis and investment recommendations or $10,000 for premium service which allows you to directly manages assets.

Annual Fees: A flat annual management fee of 0.5% of assets directly managed. The 0.5% management fee is billed as quarterly installments of 0.125% of assets directly managed.

Investment Types: ETF’s

Services:

  • Financial Planning
  • Retirement
  • IRA’s
  • 401k’s
  • Tax Loss Harvesting+

Company History: FutureAdvisor was founded in 2010 by two former Microsoft engineers – Bo Lu and Jon Xu. The company was started with $1 million in seed funding, and then raised an additional $5 million in funding from Sequoia Capital in 2012. In 2015 FutureAdvisor announced that they were to bought by BlackRock for an undisclosed fee.

FutureAdvisor Main Facts

 

FutureAdvisor Interface

Introduction:

FutureAdvisor is one of the newest online investment advisors (robo-advisors) on the market. As a company, FutureAdvisor currently manages $695 million in assets compared with over $2 billion each by other online investment advisors Betterment and Wealthfront. FutureAdvisor offers a wide mix of services & tools for you the user with many of them being free. they also offer  paid account management with automatic rebalancing, tax-loss harvesting, along with access to financial advisors. This last service is something that I personally like as being able to speak to an advisor allows you to have confidence you are moving in the right direction with your investments.

Investment Choices:

Just like other online investment advisors, FutureAdvisor deals with ETF’s as opposed to mutual funds. The service provided by FutureAdvisor enables you to manage your various offers taxable investment accounts, whether they are  individual or joint accounts. Furthermore, you are able to directly manage your IRAs, including traditional, Roth, rollover and SEP IRAs. Unlike online investment advisors like Betterment, FutureAdvisor doesn’t enable you to invest in individual stocks, bonds or other investments.

Main Features of FutureAdvisor:

There are three different services offered by FutureAdvisor, these are college savings, investment management, and retirement planning.  I’ll give you a brief overview of these main services, starting with college savings. This actually falls under their free advice section as they help and guide you to create a plan for funding your children’s education in the future. In addition, they can open and manage 529 accounts (not sure if this still comes under the free service) and they can deal with paying school fees as well.

Next comes investment management. This doesn’t come under FutureAdvisor’s free service, there is an annual fee of 0.50%, however, this fee is only applied to the assets that you get them to directly manage for you.

Finally retirement planning. This, just like college savings is a free service also. The service will analyze your funds, make suggestions and provide personally tailored advice to help you best manage your financial portfolio.

In addition to these main features, FutureAdvisor does offer further free services and advice, such as providing free advice on 401k’s.

Downsides of FutureAdvisor:

Unlike Betterment who don’t have a minimum investment for them to directly manage your assets, you do with FutureAdvisor and it’s $10,000, which compared to Betterment is very high. Also, their management fee is 0.50% compared to Betterment’s fee of 0.35%. Having said that FutureAdvisor do offer a lot more free advice and information that a lot of the other online investment advisors, and their fees compared to working directly with an advisor, is extremely low.

I’m not sure if this is really a downside or not, but FutureAdvisor only perform trades for you within TD Ameritrade and Fidelity brokerage accounts. So if you don’t have an account with either TD Ameritrade or Fidelity, you will have to open one, and if you have an account with anyone else, you can’t move it, it can only be with TD Ameritrade or Fidelity.

Incentives For Joining FutureAdvisor:

The main incentive for opening an account with FutureAdvisor is all the free advice and support they give you. On top of that as a client, you will have direct access to financial advisors during weekly business hours. If you so wish you can have an appointment with an advisor, and your trades will be monitored by said advisor as well as by their software.

Who it is for / Who it is not for:

If you are starting out with investing and need free advice, looking to start planning for your retirement or even begin a college fund for your children, then FutureAdvisor is a great service. If you are a seasoned investor, FutureAdvisor is still a very good online investment advisor, but there are better ones out there, such as Betterment. Also, if you are post retirement age, FutureAdvisor doesn’t accept new accounts so are not a service for you.

We hope that from our FutureAdvisor review you have been able to get the salient facts to help you decide whether to open an account or not.