Advantages, disadvantages and who should create an account

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Advantages

  • Use tax-loss harvesting
  • Gives you access to multiple levels of risk
  • Uses multiple index ETFs to minimize tax burden and keep portfolio on track

The inconvenients

  • Only manages accounts held at Fidelity or TD Ameritrade
  • Minimum account and high fees; limited account selection
  • Limited customer service

More information

  • Promotion: None at this time.

Global mark

Is FutureAdvisor for you?

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

It primarily uses index ETFs in its portfolio allocations, and while it only accepts clients whose assets are held at Fidelity or TD Ameritrade, you can still use the platform if you don’t currently have an account with either brokerage firm. 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 right 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 with lower fees. While FutureAdvisor has a minimum account requirement of $5,000, Personal Capital requires $100,000.

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

FutureAdvisor vs. Betterment

FutureAdvisor and Betterment also share the automated investing approach and both offer ETFs, tax loss collection and portfolio rebalancing. But Betterment is a cheaper option all around.

With Betterment, you can start investing without meeting any minimum account requirements, thanks to its digital plan. Its premium plan has a higher minimum requirement ($100,000) and it gives you unlimited access to a CFP.

While you will pay 0.50% per year at FutureAdvisor, 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, multiple wallet options, and more.

Ways to invest with FutureAdvisor

Automated portfolio management

FutureAdvisor manages existing investment assets you hold with Fidelity or TD Ameritrade. With at least $5,000, you can take advantage of automatic features such as rebalancing, portfolio monitoring, and tax loss harvesting. These features, however, are standard among robo-advisors, and you can access them through other companies for much less.

FutureAdvisor takes a simple approach when it comes to setting up your account. To select an appropriate allowance for you, it first asks questions about your financial situation (such as marital status and annual household income). You can then choose the goals, such as retirement, a major purchase, or a general investment, that you want to invest towards.

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

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

Costs

Its fees are not high compared to other popular robotic platforms such as Betterment, Ellevest, SoFi Automated Investing, and Wealthfront. FutureAdvisor charges 0.50% per year (it charges this quarter, which means you’ll pay 0.125% four times a year).

Additionally, 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 doesn’t give users flexibility when it comes to adjusting their portfolios or choosing specific allowances.

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

Account Types

The platform supports a small number of accounts. These include single and joint accounts, traditional IRAs, Roth IRAs, rollover IRAs, and 401(k) rollovers. Although FutureAdvisor only accepts TD Ameritrade or Fidelity investment accounts, you can still use the robo-advisor if you don’t currently have an investment account with either brokerage. He will provide the necessary documents to consolidate the accounts you hold elsewhere in one of the two brokerages.

FutureAdvisor: Is it trustworthy?

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 bureau’s opinion of how the company interacts with its customers, but it also takes into account several other factors.

These include the type of business, length of activity, licenses and government actions, advertising issues, and customer complaint history. The BBB cites two complaints as one of the main reasons BlackRock received its rating.

BlackRock’s profile shows that it has closed two complaints in the last 12 months. He currently has one unanswered complaint at this time.

FutureAdvisor — Frequently Asked Questions (FAQ)

What is FutureAdvisor?

FutureAdvisor is a robo-advisor that offers automated portfolio management. As far as retail investors are concerned, the platform only manages the assets of those who hold accounts with Fidelity or TD Ameritrade.

Is a robo-advisor a good idea?

It depends on your investment preferences. If you are a do-it-yourself person who likes full control over your account investments, automated investment platforms are not a good idea for you. Robo-advisors are best for hands-off investors who are comfortable with the idea of ​​computer algorithms and/or financial experts creating and managing personalized portfolios on their behalf.

Can you lose money with robo-advisors?

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

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