Review: FutureAdvisor as a Robo-Advisor

The Rise of Robo-Advisors

Robo-Advisors are digital platforms that provide financial planning services with little to no human supervision and interference; in other words, they are called AIs (artificial intelligence) that acts as online financial advisors.

Review: FutureAdvisor as a Robo-Advisor

What they do is they collect information such as the financial situation and the future goals of their clients, they then use this information to offer advice and strategic planning on areas and markets where they can maximize their investments efficiently and be able to generate passive income and active income for some.

Robo-Advisors have been gaining recognition for the past years especially to those who are looking for a more convenient and time-efficient way of managing their investments.

May it be for retirement, for investment accounts, or for those who seek low-cost investment opportunities, these Robo-Advisors give their clients access to a certified financial planner and allow their clients to set up a customized portfolio which gives access to a wealth of management services.

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In choosing the best Robo-Advisor for you, some of the most important considerations and questions to answer are:

  1. Do they offer a low initial investment?
  2. Do they charge low fees for their services? and;
  3. Do they offer known investment options and comprehensive portfolio management features?

There are several known Robo-Advisors available in the market since 2008, but let us focus on one tool known as FutureAdvisor.

What is FutureAdvisor? What kind of help do they offer that would convince you to consider signing up for this service? Read more on this review to help you decide whether FutureAdvisor is right for you and if you should trust them with your investments.

What is FutureAdvisor?

FutureAdvisor is an investment advisory firm which manages its client’s investment accounts. As stated on their homepage, “they serve as a fiduciary who puts the financial interest of their clients ahead of theirs.”

They are registered with the U.S. Securities and Exchange Commission and are working with a team of finance professionals, data scientists, and software engineers to give its clients a reliable and dependable service which secures growth in securities and investments.

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As a financial advisor tool, FutureAdvisor gives its clients access to a team of financial advisors through chat, electronic mail, and mobile phone calls for several days per week. This management service monitors, rebalances, and manages the clients’ current investments to help them strengthen their accounts.

If you are wondering whether the company’s services are free, well not entirely.

Some of their services do not charge a fee like the one for a comprehensive retirement analysis. However, for the more extensive investment management, FutureAdvisor charges a management fee of 0.50% and also requires a minimum balance requirement of $10,000 on their client’s account.

FutureAdvisor works with two of the most well-founded brokers in the United States – Fidelity and TD Ameritrade – for their clients’ accounts. This makes this tool a good choice for clients who already have existing accounts with either of the two brokers. They will no longer need to further familiarize themselves with their system and would no not need to transfer funds to use FutureAdvisor.

Services They Offer

FutureAdvisor has two main product offerings:

  1. Free Portfolio Analysis Services
  2. Future Advisor Premium

Free Portfolio Analysis Services

This free service analyzes the client’s portfolio and from there, FutureAdvisor will give recommendations based on the Modern Portfolio Theory that is commonly used by the majority of Robo-Advisors like Betterment and Wealthfront.

With this service, you may initiate trades through your online broker. It is worth noting that this service can also be used on any account and broker.

Future Advisor Premium

With FutureAdvisor Premium, clients have access to daily tax-loss harvesting and automatic portfolio rebalancing. This tax loss harvesting is a common portfolio practice in which when clients lose money on ETF’s in the client’s portfolio, they will be sold at a loss and will then be replaced with a similar ETF.

This method will allow clients to offset the taxes they pay on their gains and decrease their overall tax bill. Doing tax loss harvesting would be too much work for clients to do on their own, and the company has a program that can handle all these complexities. However, keep in mind that this method only applies to taxable accounts and not to retirement accounts.

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The company rebalances their client’s portfolio automatically which ensures that stocks in their portfolio stay in balance even when stocks grow at different rates and move away from the client’s ideal asset balance especially when they are trading daily for harvesting tax-loss.

All accounts on this service must be moved to TD Ameritrade or Fidelity, all the client needs to do is to give FutureAdvisor the right to manage their accounts and it will then trade on the client’s behalf.

One downside of this service is it requires all accounts to have a minimum balance of $10,000.00 – which might be a little high compared to the minimum balance required of other Robo-Advisors in the market. They also carry an annual fee of 0.50% in addition to the transaction fees that clients may incur.

In addition, this “premium” service has a minimum age restriction. Clients over the age of 68 are no longer accepted by FutureAdvisor because people in this age bracket are viewed to give more value to the return rather than income generation.

This service is of advantage to those who have existing accounts on either of the two brokers mentioned above because they can get all the perks of a Robo-Advisor with their trusted brokers. However, for those with accounts with other brokers, they will need to transfer their accounts to the only two approved brokers of FutureAdvisor.

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FutureAdvisor’s Investing Strategy

Creating an account with FutureAdvisor is free and in the process, clients will be asked to answer a series of questions about their current financial situation, their own financial goals, and the risks that they are able and willing to tolerate in view of investment growth.

This is also what other Robo-Advisors do, only that for this app they also ask about the client’s family and relatives. FutureAdvisor tries to take a holistic approach so that they would be able to fully understand how each of the client’s family members affect their investing goals and strategies.

FutureAdvisor uses the Modern Portfolio Theory which allows their clients to maximize stock market gains and minimize risks by investing in a balanced and diversified portfolio. Aside from that, the company also uses other well-tested financial theories and mathematical models to ensure that their clients’ investments are effectively handled.

Should You Consider Opening a FutureAdvisor Account?

Well, it depends. If dealing with securities or investments and gaining from similar mechanisms is something that you do passively apart from your regular job, then probably enrolling with this company will serve your best interest.

Because Robo-Advisors do and fill the job of checking and formulating the best strategies suited with your investment goals, this will save you the trouble of researching to know the world of financial markets.

On the other hand, if engaging with securities is where you derive your active income from, then there would be less of a need to enroll with FutureAdvisor since all the services that they do are already known to you, and of course, some things are just better off if you do them your own.

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FutureAdvisor, on top of everything, provides convenience to its clients regarding their investment plans and strategies, giving way or opening opportunities to greater and better realization of income.

However, if the convenience it guarantees will not compensate to the worries you might be encountering in entrusting another company with your investment accounts, then maybe you should take a longer time to think before choosing this type of financial assistance.

FutureAdvisor is a relatively young company in the business, being only more or less than ten years in the industry. Although it only trusts and authorizes two brokers, they have established their name in the field which makes the company share the goodwill that has been created by TD Ameritrade and Fidelity.

Truly, security of your finances is probably the least worry that one should think of in deciding on trying with this specific Robo-Advisor company. What is also good in this company is that they actively search for better areas in which your investment goals match and where a greater return is viewed to be realized.

Ultimately, this type of mechanism is a big change from the usual face-to-face encounters with a financial adviser. The benefits it provides gives a certain group of individuals with same financial interests a huge advantage primarily because of the convenience it gives and the opportunities it may open to a client.

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But this would not be appealing to everyone as some people would prefer and would be more comfortable dealing with the usual advisers for fear of the unknown world of technology. Having to change into a more technologically-advanced process could be scary for most people.

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