Pros, cons and who should create an account

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Pros

  • Takes advantage of tax loss harvesting
  • Gives you access to multiple levels of risk
  • Uses a variety of index ETFs to minimize the tax burden and keep the portfolio on track

cons

  • Only manages accounts with Fidelity or TD Ameritrade
  • High account minimum and fees; limited account selection
  • Limited customer service

More information

  • Promotion: None at the moment.

Overall rating

Is FutureAdvisor right for you?

FutureAdvisor is an automated investment platform owned by BlackRock that manages all existing investment accounts its clients have with Fidelity or TD Ameritrade. The advisor regularly rebalances your accounts, implements tax minimization strategies and monitors your portfolio throughout your investment timeline.

It primarily uses index ETFs in its portfolio allocations, and while it only accepts clients with assets held with Fidelity or TD Ameritrade, you can still use the platform if you don’t currently have an account with either broker. FutureAdvisor will consolidate accounts held elsewhere into Fidelity or TD Ameritrade accounts.

If you have at least $5,000 and don’t mind the 0.50% fee, FutureAdvisor might be for you.

FutureAdvisor vs Personal Capital

FutureAdvisor and Personal Capital both specialize in robo-advice, but FutureAdvisor is a better option for Fidelity and TD Ameritrade users who want to automate their investment assets at a lower cost. While FutureAdvisor has a minimum account requirement of $5,000, Personal Capital requires $100,000.

While Personal Capital makes the most sense for higher net worth investors, it has a wider selection of investment types, portfolio options, and features than FutureAdvisor.

FutureAdvisor vs Improvement

FutureAdvisor and Betterment also share the automated investment approach and both offer ETFs, tax loss harvesting and portfolio rebalancing. But Upgrade is a cheaper option everywhere.

With Betterment, the digital plan allows you to start investing without having to meet minimum account requirements. The premium plan has a higher minimum requirement ($100,000) and it gives you unlimited access to a CFP.

While at FutureAdvisor you pay 0.50% per year, Betterment only charges 0.25% for its digital plan and 0.40% for its premium plan. Plus, Betterment gives you access to checking and cash reserve accounts, various portfolio options, and more.

Ways to invest with FutureAdvisor

Automated portfolio management

FutureAdvisor manages existing investment assets that you hold with Fidelity or TD Ameritrade. With a minimum of $5,000, you can take advantage of automatic features such as rebalancing, portfolio monitoring, and tax loss harvesting. However, these features are standard with automated advisors and you can use them through other companies for much less.

FutureAdvisor takes a simple approach when it comes to setting up your account. To select an appropriate allotment for you, he will first ask questions about your financial situation (such as marital status and annual household income). You can then choose which goals – such as retirement, large purchase or general investments – you want to invest.

After getting information about your time horizon and desired risk tolerance (FutureAdvisor offers five levels of risk: conservative, moderately conservative, moderate, moderately aggressive and aggressive), the robo-advisor creates an investment strategy for you.

The platform implements tax optimization strategies by primarily leveraging the investments you already have in your trading account. It only invests your money in index funds if it believes it can help you achieve certain portfolio goals.

Cost

The cost isn’t great when compared to other popular robo platforms like Betterment, Ellevest, SoFi Automated Investing, and Wealthfront. FutureAdvisor charges 0.50% per year (it bills this quarterly, meaning you pay 0.125% four times a year).

In addition, FutureAdvisor’s account options and portfolio types are also limited compared to similar platforms. It only offers a small list of taxable accounts and IRAs, and it gives users no flexibility when it comes to customizing their portfolios or choosing specific allocations.

You can access a wider range of portfolio options (and at a lower cost) with other automated platforms. For example, Betterment offers six types of portfolios.

Account types

The platform supports a small number of accounts. These include individual and joint accounts, traditional IRAs, Roth IRAs, rollover IRAs, and 401(k) rollovers. While FutureAdvisor only accepts TD Ameritrade or Fidelity trading accounts, you can still use the robo-advisor if you don’t currently have a trading account with either broker. It takes care of the paperwork needed to consolidate accounts you have elsewhere with one of the two brokers.

FutureAdvisor: Is it reliable?

FutureAdvisor does not have a Better Business Bureau profile, but its parent company, BlackRock Inc., does. The Better Business Bureau gives BlackRock an A rating. This rating not only reflects the agency’s opinion of how well the company treats its clients, but also takes into account several other factors.

These include business type, time in business, licensing and government actions, advertising issues, and customer complaint history. The BBB cites two complaints as one of the main reasons BlackRock got its rating.

BlackRock’s profile shows that it has handled two complaints in the past 12 months. There is currently one unanswered complaint.

FutureAdvisor — Frequently Asked Questions (FAQ)

What is FutureAdvisor?

FutureAdvisor is a robo-advisor that offers automated portfolio management. When it comes to retail investors, the platform only manages assets for those who have accounts with Fidelity or TD Ameritrade.

Is a robo-advisor a good idea?

This depends on your investment preferences. If you are a do-it-yourselfer who likes to have full control over the investments in your account, then automated investment platforms are not a good idea for you. Robo-advisors are best for hands-off investors who are okay with computer algorithms and/or financial experts creating and managing personalized portfolios on their behalf.

Can you lose money with robo-advisors?

Yes. Be it an online brokerage, automated investment platform or cryptocurrency exchange, you can lose money with any investment platform. And while robo-advisors typically provide exposure to a diversified collection of funds (e.g., ETFs or mutual funds), these assets are not immune to market fluctuations.

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