Future Advisor Review
If you are a member of the middle class like the majority of Americans, then you know all too well that for middle class people, there has been a dearth of financial advice (that was not blatantly and overtly biased) over many decades. This problem existed because of the enormous net worth minimums that money managers used in order to weed out those of us who were not wealthy enough. Enter Future Advisor on the scene.
Future Advisor boasts that it offers these same levels of world-class financial services that were traditionally only available to the rich and powerful families of America and beyond. Their stated goal is to help the backbone of the country, the hard-working middle class families who want to achieve their own financial goals, put their children through college, and manage to retire all in one lifetime.
Future Advisor Intro and Background
These are noble goals that Future Advisor has set for itself, but whether or not they can achieve them remains to be seen. We inquired and uncovered much of their specific strategy to deliver this kind of rich man’s financial advisory services to the working class. They start with the all-important, well-balanced asset allocation strategy. This reduces investment fees, diversifies against undue financial risk, and takes the emotions of individual stock and bond holdings out of the equation. The fee that they charge amounts to between a sixth and a half of the typical money management service fees. Future Advisor does all of this and simultaneously provides you with the option of discussing your personal needs and goals with registered brokers.
We keep in mind that the typical minimum investment account size for professional money management with the financial industry cabal comes in at around half a million dollars. Future Advisor will do it for accounts with only $10,000. For those with smaller sized investment pools, they recommend purchasing shares in a low-cost index fund.
Something they are doing must be working, as they are presently the most rapidly-expanding financial advisory firm in the U.S. They say that it is because they assist regular families in saving automatically and investing smartly so that it is not a burden on them, and that they minimize the taxes of these clients at the same time. Future Advisor claims more than $150 million under management and invests these holdings using algorithms based on the preferences of their investors, all by buying into low fee index funds.
Future Advisor Tools and Features
Whether you are a fan of Future Advisor or not, we believe that you have got to love their significant array of financial management features and tools. The more important ones are:
- Retirement Accounts Direct Management – We like that Future Advisor handles all of your retirement accounts directly and supports Roth, traditional, SEP, and rollover IRA’s as well as UGMAs, UTMAs, Coverdell, and 529s.
- Automated deposits and automatic rebalancing – standard features that help your account to grow without you having to handle making deposits consciously. The rebalancing ensures your asset allocation does not come unglued over time.
- Tax Loss Harvesting – ensures that your tax write-offs will be the maximum possible by selling your biggest losers and reinvesting in a similar, comparable type of investment with the proceeds.
- ETFs Investing – they prefer to buy Exchange Traded Funds as they have lower costs than mutual funds, with typical fees amounting to a reasonable 0.15%.
- Future Advisors Premium Service – with a $10,000 minimum sized account, you qualify for Future Advisor Premium that directly manages your money for you.
- Free Tools and Advice – If you prefer to do it yourself and save on the fees but would like the expert advice provided by a registered broker and backed by quality, proven research and Modern Portfolio Investment Theory, you are in luck as the platform literally will analyze your investment portfolio at no charge and then provide you with no-cost recommendations. Over 400,000 individuals with $40 billion worth of assets have participated so far.
- Free College Savings Money Management – we absolutely love that there is no charge for Future Advisor to manage your college savings money. Besides investing your funds, they will advise you on the amount of money you need to save regularly and the account types that are most ideal for your situation. They provide free rebalancing services also as your children grow and the market changes.
- Future Gift – A site that makes it possible for your family and friends to make a contribution to your child’s college investment accounts.
- No New Accounts Required – so long as your investment accounts are held by Fidelity or TD Ameritrade, Future Advisor can manage your investments directly without you having to open up new accounts or move existing ones. Simply give them the management rights, and they will make trades for you. Accounts at other brokerages will have to be moved, but they will help you through the ordeal. If you are only interested in the analysis features of the site, then you can hold your accounts wherever you wish.
- Financial Advisor Support – For five days each week, you have the option to email, chat with, or even call their financial advisors. You can make appointments to speak with them at your convenience. They also pride themselves on real-person monitoring of every trade executed by the algorithm on your account.
Future Advisor Interface Screenshots
Future Advisor Fees
The company will not charge you for the free portions of the service that include both trade recommendations and free analysis of your portfolio. If you put your money under account management with them, be prepared for a .50% yearly money management fee unless this is college savings or 401k account money, for which there is also no charge. Some trading fees will be charged to you if you are in their money under management program, though they are reasonable and typical.
Future Advisor Safety and Security
We feel that Future Advisor is justifiably proud of its security and safety procedures. Thanks to their partnership with Yodlee for back-end support, they do not and never will store any of your banking information, accounts, or passwords. Yodlee handles directly the sensitive connections to your banks and financial companies, as they have done so skillfully and securely for countless other companies for more than a decade.
All of your data and data transfers are encrypted with the same 256 bit SSL level encryption that the largest banks in the world employ. Security giant VeriSign monitors all of their transactions, data transfers, and general online practices as well.
Final Words on Future Advisor
In today’s personal financial management space, we find two types of online financial advisors. Many of them are straight up automatic advisors, also known as robo-advisors, who employ smart algorithms that make all of your portfolio trades and decisions. The other type is the hybrid like Future Advisor that combines automatic trading with actual flesh and blood financial advisors. Future Advisor has broken the old guard’s mold by not requiring $50k to $500k of minimum startup account capital to provide you with real people who will help manage your money and even discuss it with you on the phone.
We are impressed and intrigued by the notion that you can have the best of both worlds with this service. They deliver a good scope of services and tools, and most of them for free. They also give you the choice of picking up the premium services and gaining professional management that includes smarter tax loss harvesting, automatic rebalancing, and real access (by phone, live chat, or email ) to their own financial advisors.
With many creative and helpful free offers like free 401k and college savings management services, free trade recommendations, and free analysis of your accounts, it is hard to go wrong with Future Advisor if you are a smaller investor, a do it yourself diehard, a retirement saver, a college saver, or a person whose accounts are already at TD Ameritrade or Fidelity. If you are not one of these individuals, we suggest you check out some of the competitors who offer somewhat comparable services, minus the brokers you can talk with obviously, for significantly lower management fees.
- So Simple Automated Trades – It does not get any easier than someone handling all of your trading and investing.
- No Cost, Do It Yourself Option – You can use the service at no charge and get a feel for whether it is right for you before you buy into the professional management aspect.
- Tax Loss Harvesting – You may lower your taxes by astutely taking the right investment tax losses.
- Financial Advisors – the staff of professional, full time, registered financial advisors will be more than happy to talk with you via phone, chat, or email to answer any investment questions you have.
- Lacks Personal Finance Options – as the creators designed the platform to primarily dispense investment advice and help, it does not support credit cards and individual bank accounts in the system.
- Inflexible With Retirement Account Custodians – every type of retirement account has to be either originally held or moved over to either TD Ameritrade or Fidelity.
- Age Discrimination – Future Advisor will not take on clients who are greater than age 68, as they claim their service is pinpointed to those clients still accumulating assets and investments and who are in their pre-retirement phase.
For free investment advice and portfolio analysis, you can not go wrong with this platform that also offers a managed money service, albeit at a steep .50% annual fee. Future Advisor delivers fantastic customer service and is only lacking in other areas of the personal financial management universe like bank account and credit card management.