Our FutureAdvisor review: FutureAdvisor receives constant accolades from the financial community due to its proven approach to maximizing returns on investment funds. CNN Money added this investment management firm to its list of the top 15 financial sites for 2013 — and for good reason. This site takes the frustration and confusion out of the investment process while ensuring clients can net solid returns with minimal risk. Read on to learn about the proven benefits and potential drawbacks of choosing this investment management company.
- Best For: FutureAdvisor expertly serves the needs of low-key, hands-off investors at every risk tolerance level. Individuals interested in gradually boosting their account balances using long-term, diversified investments will benefit most from this company’s metered approach.
- Price: FutureAdvisor charges just 0.125 percent of the managed account totals on a quarterly basis, which equals a total annual fee of 0.5 percent. Trading fees and account closing costs may apply. All of the fees are deducted from taxable accounts first to minimize yearly tax liabilities.
- Features: The diversified accounts managed by FutureAdvisor may include traditional, Roth, SEP and rollover IRAs, plus taxable individual and joint accounts outside the retirement realm. The employed diversification and tax strategies help minimize risk and expenses to boost the growth of these accounts over the years.
- Other highlights: FutureAdvisor currently offers new clients three months of free premium access to give individuals time to gauge the benefits of the company’s direct management services. Information about investment account recommendations, 401(k) management and retirement planning remain free for base level accounts.
- Customer Service: The award-winning team at FutureAdvisor offers comprehensive support and guidance by phone, email and live chat. Team members and software programs provide 24/7 monitoring and balancing of all managed accounts.
|Fees||Investing Options||Minimum Investment||STL Rating|
|0.5% Annual Rate||At least 12 asset classes, including ETFs, options and stocks, are used to diversify managed accounts||$10,000|
What Features Does FutureAdvisor Bring to the Table?
With FutureAdvisor, you receive ongoing monitoring services and automatic balancing adjustments for all of your investment accounts. The adjustments are made to match your expectations for risk tolerance and account growth.
Upon signing up for this service, you enter in your stats, including age, yearly income, preferred retirement age and risk tolerance level, for use in the generation of an appropriate personalized management plan for your accounts. After creating your investment profile, you can add all of your current retirement and non-retirement accounts to your managed portfolio. The company expertly manages IRAs of all kinds, including Roth, traditional, rollover and SEP accounts. In addition, you can add your non-retirement individual and joint taxable accounts to the list of managed entities.
You also have the option to open new accounts with help from the team of financial advisors. You must deposit an initial balance of at least $10,000 to obtain this service. You can make additional small deposits after creating your account, but these funds will need to hit $500 to become a part of your investment portfolio.
What Are the Benefits of Choosing FutureAdvisor?
Your accounts receive direct professional oversight by financial experts to ensure they meet your expectations through the years. If your account growth or risk deviates from the intended path, the system triggers the balance process to align your finances with your goals.
Your account actions always remain highly transparent and affordable through every phase of the investment process. You can log in to your dashboard to review current holdings and recent actions and results. You can also review the health breakdown for your investment portfolio, which covers your diversification rate, tax efficiency and performance metrics.
All of your managed accounts are held by one of two third-party investment companies, TD Ameritrade or Fidelity Investments. These companies offer third-party access to your accounts and additional financial monitoring statistics. The accounts always remain in your name, with FutureAdvisor listed as the managing entity only.
FutureAdvisor reviews your accounts constantly to meet the metrics you assigned. The system rebalances your accounts up to six times a year to ensure the performance metrics meet or exceed expectations. As a result, your investment accounts always stay on target to help you reach your financial goals. You have the ability to withdraw your funds anytime, with balance transfers occurring within four days’ time.
Does FutureAdvisor Have Any Drawbacks to Consider?
FutureAdvisor only works really well for individuals interested in a hands-off approach. Upon setting investment growth expectations and identifying risk tolerance levels, the monitoring software and expert team of professionals take over from there.
Portfolio building and rebalancing occurs automatically without your input. The team will generate one alter email for the initial rebalance phase, but no other will arrive after that. Furthermore, you cannot select any particular stock holdings for your portfolio after assigning account management to the team at FutureAdvisor. You are only given the ability to lock existing stock holdings if they make up a very small portion of your portfolio.
How Much Are the Costs and Fees for FutureAdvisor?
FutureAdvisor offers two account levels for you to choose between on your journey toward financial success. If you want to manage your accounts yourself, you may choose the free option to receive information about 401(k) management, retirement planning and investment selection at no charge. For personalized monitoring services and automatic adjustments, you will need to set up a premium account.
With the premium account, you will only pay management fees in the form of 0.5 percent of your managed account balances over the course of the year. The fees are broken down into installments of just 0.125 percent per quarter. During the rebalance phase of your account management plan, you may need to cover trading fees assigned by the online brokerages.
TD Ameritrade: $9.99 per ETF or stock trade with a maximum of $24 for mutual funds.
Fidelity Investments: $7.95 per ETF or stock trade with a maximum of $50 for mutual funds.
The team strives to minimize these expenses by selecting commission-free funds whenever possible. As a result, up to 90 percent of the investments do not have any required commission fees.
During the management process, you may incur account closing or trade out fees of up to $100 when your investments shift for the rebalance phase. You will never have to pay any fees to open accounts or halt your management services. To protect you from high tax burdens, all of the assigned fees are pulled out of taxable accounts, if possible.
You have the ability to cancel your premium management services anytime without a charge. If you prefer to oversee the management of your own accounts, you can receive guidance from the team by using the free base account.
How Does FutureAdvisor Stack Up Against Competitors?
FutureAdvisor assembled an expert team of award-winning professionals to provide clients with the best possible financial results. The team features software engineers, finance experts and data scientists with diverse backgrounds and experience levels. The guidance and support offered by these professionals is always backed by pertinent, results-driven data. Competitors are unable to replicate the level of financial knowledge and care offered by these professionals.
The software employed for financial monitoring and balancing is also unmatched by the competition. The software utilizes high-tech algorithms to identify deviations from expectations and automatically apply suitable balance adjustments. The program employs the company’s financial methodology for high returns from long-term, diversified investments to make account changes. Tax-saving strategies are built in as well, to keep you from high liabilities at year’s end.
All things considered, with FutureAdvisor acting as your fiduciary, you can expect to net great yearly returns on your investment without worrying about unnecessary levels of financial risk.