FutureAdvisor takes a holistic approach to financial planning. This robo-advisor wants more than your retirement pot. You will be given the option of linking all of your brokerage and 401(k) plans to your FutureAdvisor account. This enables this ambitious robo-advisor to optimize your savings and income opportunities, as well as fees and tax efficiencies, across your whole financial picture. Separately, you can even link your bank accounts to future advisor and receive budgeting and cash management advice.
Assets Under Management: $600 million
Client Profile: Millennials, Baby Boomers
What do you need to start?
FutureAdvisor is a little different than most robo-advisors as they are an independent advisory firm that manages your existing retirement and non-retirement at Fidelity or TD Ameritrade. If your assets are at another brokerage, you will need to transfer to either Fidelity or TD Ameritrade to be managed by the FutureAdvisor robo-advisor platform.
FutureAdvisor provides free investment advice for all of your investment accounts regardless of which brokerage you use. And, they will manage your 401(k) plans and 529 College Savings Plans for free! They can be with Fidelity, TD Ameritrade, or even Betterment, Charles Schwab, or Vanguard.
If you want FutureAdvisor to actually manage the day-to-day trading and portfolio management decisions, you can also select that option if you currently invest with Fidelity or TD Ameritrade.
What questions do they ask?
After a few basic profile questions including your personal information, planned retirement age, annual income, and risk tolerance, you will be prompted to enter your non-BlackRock financial accounts. You may click on the list of leading brokerage and 401k plans to link accounts and have your complete financial profile assessed. Alternatively, you can manually enter your investments. This option can be cumbersome and involves adding individual taxable and non-taxable accounts, but it is a small investment of time for the potential returns from a more precise portfolio allocation.
Once at least one of your investment accounts has been linked, FutureAdvisor will perform a free portfolio checkup and make recommendations that will help ensure you can afford to retire at your anticipated retirement age. If you are a Fidelity or TD Ameritrade customer, you will also have the option to enroll in their robo-advisor services known as FutureAdvisor Premium.
FutureAdvisor Platform Features
|Accounts Supported||Taxable, Traditional and Roth IRA, 401k, 529 Plans|
|Account Management Fees||Free for Portfolio Analysis
0.50% annually for managed portfolios
|Investment Expense Fees||Varies on Individual Fund-0.03% to 0.15% on average|
|Asset Allocation||ETFs from up to 15 asset classes|
|Tax Harvesting||Yes-Included with Future Advisor Premium|
|Mobile App||Only available for iOS here|
|Customer Support||Chat and Phone — 11:30A-8P Eastern, Email–24/7|
FutureAdvisor offers a “freemium” model. They will perform a free portfolio checkup on any investment account you own regardless of the brokerage. This can be an excellent option if you want to test drive FutureAdvisor’s platform or simply want an extra set of eyes on your portfolio and are comfortable with DIY investing.
When you are ready to let FutureAdvisor manage your Fidelity or TD Ameritrade taxable brokerage, IRA, 401k, or 529 Plan, you will need to sign-up for their Premium plan. The annual fee is 0.50% of all managed assets, which is billed quarterly in 0.125% increments, and your account balance must be at least $10,000.
Automatic rebalancing and tax-loss harvesting are included in the fee. As the annual fee is higher than other robo-advisors, you do get online access to the FutureAdvisor advisory team. If you still want access to human advisors, the $10,000 initial account balance requirement is a bargain.
Based on your initial investment questionnaire responses, FutureAdvisor will adjust your portfolio with U.S. and international stock and bond ETFs to match your risk tolerance. All FutureAdvisor trades are based on an algorithm yet verified by a human financial consultant. If you are hesitant to fully automate your investments, this can be an excellent balance between automation and traditional portfolio management.
This diversification is standard among all robo-advisors. To help minimize trading fees, 90% of all the funds FutureAdvisor trades are commission-free. The actual funds traded in your portfolio will depend on whether you invest with Fidelity or TD Ameritrade as they offer different no-fee funds.
Even if you choose not to have all your investment accounts managed by FutureAdvisor, linking your non-Fidelity and TD Ameritrade accounts allows FutureAdvisor to provide a more accurate analysis and will optimize your asset allocation.
Vanguard Personal Services
||0.30%, human advisers for a fee or >$500,000|
|Asset Allocation||Invests in U.S. and International stock and bond ETFs||Invests in U.S. and International stock and bond ETFs||Invests in U.S. and International stock and bond ETFs|
If you want access to a human advisor but still want to enjoy the savings offered by a robo-advisor platform, FutureAdvisor will be one of your most affordable options. You only need $10,000 in managed assets to get human access, many other platforms require $50,000 or $100,000 in managed assets. The annual fee of 0.50% is also very competitive for human advisory access.
Another drawback, in addition to the $10,000 initial account balance requirement, is that your managed assets myst be at Fidelity or TD Ameritrade to qualify for FutureAdvisor Premium. There can be account transfer fees charged by your current brokerage if you do not currently invest with either of these brokerages. That being said, both Fidelity and TD Ameritrade are two highly reputable brokerages and have many excellent investment options.
Pros of FutureAdvisor
- Free Portfolio Analysis
- Human advisory access with low account minimums
- Competitive management fee
- Automatic tax-loss harvesting and portfolio rebalancing
- 401k and 529 Plans are managed for free
Cons of FutureAdvisor
- $10,000 account minimum
- Doesn’t offer lower management fee for investors that don’t want human advisory access
- Only manages Fidelity and TD Ameritrade accounts
Is FutureAdvisor Right For You?
FutureAdvisor is the best option if you meet the follow two criteria:
- Invest with Fidelity or TD Ameritrade
- Want access to a human advisor
If you do not want access to a human advisor, other robo-advisor platforms are more reasonable. Although it might not be a suitable alternative to “hands free” investing, their free portfolio analysis can be a good option if you want the insight of a robo-advisor but feel confident to manually rebalance your portfolio to match FutureAdvisor’s recommendations.