FutureAdvisor Review – Automatically Manage Investments

  • Review of: FutureAdvisor
  • Reviewed by:
  • Published on:
  • Last modified: June 25, 2015
  • Editor Rating

    Rated 4 stars

FutureAdvisor is an online investment advisor that automatically manages your investments. It helps you to do this in an advantageous way by using modern portfolio theory (or MPT), to build and maintain a portfolio to maximize your return based on certain levels of risk indicated by your investor profile.

FutureAdvisor competes with similar online investment advisory services, such as: Personal Capital, Wealthfront and Betterment.

How does it stack up against them? It depends on what services you’re looking for.

What is FutureAdvisor?

The company launched operations in March 2012. It’s led by a team of finance professionals, data scientists, and software engineers backed by the same venture capital team that backed PayPal and Google.

The service offers direct management of taxable investment accounts –- both individual and joint. It also offers direct management of IRAs, including traditional, Roth, rollover and SEP IRAs.

With direct management, you grant the service the authority to trade in your accounts on your behalf.

How Does FutureAdvisor Work?

FutureAdvisor works with Fidelity and TD Ameritrade accounts. These firms charge their usual transaction fees for trades within the account, in addition to any fees you may pay to FutureAdvisor.

FutureAdvisor - Your Portfolio
Link all your financial accounts in one place

Management includes the following services — depending upon the plan selected:

  • Index fund investing that favors low fee index funds, primarily with Vanguard or iShares.
  • Personalized diversification through a specific portfolio based on your age, risk tolerance, and investment horizon.
  • Low fees, by making portfolio fees transparent to help you pick lower fee options.
  • Re-balancing recommendations –- typically 2 to 4 times per year -– based on significant changes in your portfolio.
  • Emphasis on value and small-cap funds for greater long-term returns, includes U.S. and internationally centered funds.
  • Tax harvesting, by monitoring your holdings and looking for positions with at least $1,000 in harvestable losses at current market prices.

How Does FutureAdvisor Compare?

Out of the other services we’ve reviewed it’s most similar to SigFig. Both services sync up financial data via Yodlee, and gives automated financial advice no matter where your assets are located. No financial advisor is involved.

If you are looking for a financial advisor, then FutureAdvisor isn’t your choice. Personal Capital does offer a financial advisor if you sign up for their paid advisor service.

With FutureAdvisor they will perform the trades for you within supported brokerage accounts (currently only with TD Ameritrade and Fidelity). So in this respect they are more like Personal Capital or Betterment.

Though FutureAdvisor uses what it refers to as indirect management of employer-sponsored retirement plans by balancing them using the assets of directly managed accounts, such as IRAs and taxable accounts.

Simply put, it manages diversification through the directly managed accounts, in order to balance the holdings in the employer-sponsored plans.

FutureAdvisor - Portfolio Recommendations
Gives specific actions to make your portfolio the most efficient

Like many of the other automated financial services we’ve reviewed, it cannot be used for daily personal finance use like Mint.com, or what we recommend Personal Capital. FutureAdvisor was designed only for investment guidance.

If adequate diversification and balance is not achieved through the directly managed accounts, FutureAdvisor will make recommendations as to investment moves to make within the employer-sponsored plans.

The asset allocation questions asked are a little simplistic, and doesn’t have much flexibility like say Betterment’s asset allocation wheel.

The Good

  • No Fee DIY Option – You can try out the service at no cost.
  • Ability to Link Up Brokerage Account – You can link up and have FutureAdvisor automatically perform the trades to get your account into their recommend asset allocation. Though currently only custodian with TD Ameritrade and Fidelity.
  • More Flexibility – Unlike Betterment or Wealthfront in which you must transfer assets to their firms. FutureAdvisor gives recommendations based upon your existing portfolio.
  • Review Trades before adjusting – FutureAdvisor will review your existing investments before making recommendations, taking into account tax implications of selling what you already have.
  • Easy to Use Interface – Better user interface when compared to Wealthfront, but not as good as Betterment’s
  • Tax Loss Harvesting – Decrease your taxes by taking investment losses and pair up with your gains. Though retirement accounts don’t have to be concerned about this issue.

The Bad

  • Slightly Higher Fees Than Competition – When compared to the other robo-advisors FutureAdvisor is slightly on the expensive side.
  • Limited Asset Allocation – Asset allocation isn’t as flexible when compared to Betterment’s service.
  • Retirement Planning Only – FutureAdvisors is currently for retirement planning only

How Much Does FutureAdvisor Cost?

You have the choice of the DIY option which is free, or the premium option.

FutureAdvisor recently simplified their pricing model. The paid service is just a flat fee of 0.5% of assets managed. Assets that cannot be managed by FutureAdvisor but monitored (ie 401(k) plan) are not included in billing. The management fee is billed in quarterly installments of 0.125% of assets directly managed.

The annual fee is cheaper than any advisor based service like Personal Capital, but still more costly than fully automated services like Betterment.

The free service -– the DIY Advice plan -– doesn’t actually handle activity within your accounts, it does provide you with the information, and analysis you need at zero cost. This allows a small investor, and particularly an upstart, the ability to get portfolio guidance for free.

If you are a DIY investor, FutureAdvisor is one of the services to check out.

Have you used FutureAdvisor? If so, do you recommend it?

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Reader Comments

  1. David says

    Wouldn’t it be better to do balancing In tax free accounts? By relegating the balancing to taxable accounts would have a higher tax impact.

    • says

      Hi David – I think that’s the objective, but FutureAdvisors doesn’t directly manage 401(k) plans, and that’s where most people have most of their investment capital. That leaves rebalancing primarily in taxable accounts or IRA accounts. They have to use those accounts to make adustments to a portfolio dominated by 401(k) funds. Of course, they will make recommendations as to how you can make changes within your 401(k).

      • David says

        I may have misread the article… It does seem to favor the accounts it can trade direct? Anyway… I must be doing pretty good with my investments, it’s recommending I sell everything in my retirement accounts and move it somewhere else.

  2. says

    Thanks for reviewing us, Kevin.

    David – good question. We actually automatically focus our rebalancing efforts in the tax-free accounts as much as possible. We calculate the tax impact of every trade using lot by lot cost basis information, and have a stringent capital gains and tax policy that we follow during rebalancing or any other trades (you can read more about it in our FAQ[1]). This way, we calculate on a case-by-case basis whether the long-term gain (in diversification, lowering portfolio fees, etc.) is worth the one-time tax trade off.

    Good question though. Thanks for pointing out something most people don’t think about enough.

  3. Dan Larson says

    Here’s my 2 cents. FutureAdvisor has managed my accounts since October, 2013. Very good execution with thoughtful, personal and professional communication, everything I hoped for but did not get from my traditional money manager or previous use of my brokerage firm’s Asset Allocation services. Your money manager has model portfolios and based on you age and risk tolerance, they pull one off the shelf and move your money in, charging 1% or more. FutureAdvisor includes my employer’s 401K investment options in the portfolio strategy and makes recommendations that I have to execute since they cannot control my 401K.

    I cannot say enough good about FutureAdvisor. They have been vigilant on not selling my pre-existing high appreciation investments and have taken a measured approach minimizing capital gains. FutureAdvisor build a portfolio across 5 of my accounts, including 401K, IRA and post-tax accounts. I have not had better service or execution, even when I have paid much more.

  4. Marty McFly says

    No, of course you don’t need a human financial advisor. Until you do. You have unfettered access to a wide range of investments, and opinions and models, and you have had all of that for at least 2 decades. So why now the bravado to go it alone? 5 straight positive years for equities.

    The financial advisor’s role is to remove the human element, emotion, from the investment decisions for something as emotional and personal as your wealth. Emotion drives the retail investor to sell low (Fear) and buy high (greed). There is a reason why the average equity returns for retail investors is less than half of the S&Ps returns. No, of course you don’t need a human financial advisor. Until you do. And when you do, it may be too late.

      • John Hopkins says

        -said the investor who most likely averages half the returns over the long term of that with a financial advisor

        Everyone thinks they’re investment pros when the markets are doing well. FA’s earn their worth during times of crisis. Thankfully I had one looking out for me during 08-09.

  5. James says

    No good for me (or you) if entries are done manually. I don’t trust very quickly so I entered some data manually. It labeled the Federal Thrift Savings Plan as unknown and it was unclear how to enter the dollar amount. But worse, I entered a Vanguard Fund manually which it accepted. But it was again hard to find a place to enter the dollar amount. After stumbling upon a way to enter the dollars I entered $25500 for the fund. This website showed my total assets as Total Assets: $520,710.00. How do they get that? I would not trust their math.

  6. Joe Bacarella says

    Future Advisor has their place for passive investors, however, an excellent question that deserves to be answered if you have a premium account like I did was “What is the gain on the account YTD?” It is not included for a reason…it is abysmal. I can go to any other firm and find out immediately what the gain on the account was…not so Future Advisor. They WILL tell you how much the account has increased / decreased in the past week but not how the account is doing in comparison with other guideposts such as the S&P 500 or the Russell 2000 or you name it. In this case ignorance is not bliss, the opportunity cost of such passive investing far, far exceeds any and / all fees you may have saved investing with Future Advisor and their tax efficient methods. In my case the gains on my Premium Accounts are not worth the lost opportunity cost. Goodbye Future Advisor our relationship may have been fun but not very profitable.

    • Dave says

      You make an interesting point Joe. I was wondering the same think. Actual investment performance is not indicated on any of the reviews that I have read. This is certainly the elephant in the room.

      • says


        We cannot cannot make any claims regarding returns in reviews for many reasons.
        1. SEC and FTC for one does not permit you to make such statements. I for example have an account with Betterment but my returns are mine and therefore unique. I can state my returns but it may not be you returns.
        2. Each person that has an account with FutureAdvisor (or any other robo-advisor) asset allocation is different. Or at least the time they entered if two individuals have the same asset allocation. Therefore returns will be different. Don’t forget about dollar cost averaging.
        3. There ARE some articles that do take specific asset allocation in the various robo-advisors and compares the returns from each.

        So in summary we can only review objectively the service, the asset allocations, and features they offer.

  7. Nate says

    My problem with services like this is that they obstinately refuse to include pensions in their calculations. I will be eligible for military retirement in a few years, which is essentially like investing in 100% US Savings Bonds. Therefore, since I’m stuck with half my retirement in bonds, I don’t want to invest any more of my money into low return investments. These services flatly refuse to allow me to specify 100% stocks.

  8. Mike says

    I am coming off of about 12 months with FutureAdvisor as a premium member and wanted to comment on them based on this review. In fact, Investorjunkie was one of the sites where I originally learned more about FutureAdvisor. Just a few quick highlights and thoughts on 1 year as a premium member with them.

    To the reviewers who comment that FutureAdvisor does not consider things like pension or workplace retirement accounts (the person above “my account…savings bonds”, etc.), that is not true. I have a 403B with an extremely limited set of bond and equity funds and another total bond account at another firm. Since the beginning, FutureAdvisor supported these and considered funds available in my 403b as they looked at rebalancing, fund suggestions and what to sell, etc. You do need to work with their support if your pension/retirement account provider is not automagically supported. They use the same crap import service (Yodle) as other robo-advisor. But, when they needed considerations for my 403b provider, I usually worked with them; this primarily involved me sending FutureAdvisor statements.

    I will directly speak to my investment performance with them. My total (workplace and nonworkplace) accounts were considered by FutureAdvisor. Workplace is held at Lincoln Financial and nonworkplace (Roth, etc.) held at Fidelity. After plug-and-chug on some numbers, my CAGR while with FutureAdvisor and for all accounts is about +2%. This is on a roughly 80% stock/equity and 20% bonds portfolio which they “FutureAdvised” on for about 1 year. Yes, you read that right: +2%.

    On a side note, my wife and I manage her portfolio at T Rowe Price. Her portfolio is roughly 68% stock & 32% bonds in an IRA. On our own decisions consistent with our investment strategies, we pulled in ~16% on that account over the same time period as my FutureAdvisor time. We judge ourselves competent investors but I really wanted to give futureAdvisor a shot.

    The FutureAdvisor performance was entirely based on their own management and on questions I answered in their profile when joining as a premium member. Roughly, retiring at 69 with my current age at 39. YYMV of course. Based on their analysis of my questionnaire answers, I was a low-aggressive investor with mostly As and A+s in the categories they rate such as diversification, etc.

    Overall, I’d say they are a good firm if you are REALLY TRULY SINCERELY dis-interested in managing your retirement accounts. I like that they considered all accounts, workplace and nonworkplace, and they seem to work with large retails brokers such as Fidelity, Schwab, etc. Their tech and customer support folks are friendly and knowledgeable. I believe they are U.S. based but don’t quote me on that. I think FutureAdvisor offers a valid service but if you are more comfortable with your own decisions and investment objectives then you might not entirely find their service(s) worthwhile.

  9. Patrick says

    FutureAdvisor has stopped including your 401k as part of their analysis. They gave me several reasons but I wasn’t particularly impressed by any of them. Now, they simply give you advice along the lines of “put x amount in a REIT fund but not if the fee is too high and, if that isn’t available, go for this other suggested type of fund.”

    I don’t invest for fun or short-term income, I invest for retirement. Ignoring the investment account that has the largest amount of contributions going into it on a regular basis is ignoring one of the most important part of my investments. That analysis was really FutureAdvisor’s single compelling feature and, without it, … what does FA bring to the table?

  10. Steve says

    I’ve had a FutureAdvisor Premium account since early June 2014, and I *really* regret taking the plunge.

    FutureAdvisor’s old dashboard lists forecast annual returns of 4% under poor market conditions and 7.6% under average market conditions. As of today (early March 2014), my overall managed account performance is about -0.8% (over 9 months), yet FutureAdvisor gives my accounts an A+ performance rating. WTF? By FutureAdvisor’s own performance standards, my account performance is abysmal.

    My brokerage account has benefited somewhat by FutureAdvisor’s automatic tax loss harvesting, which I would be too lazy to do on my own if I were managing the account. However, my Roth IRA and Rollover IRA accounts are not afforded the same benefits, and the lost opportunity costs in those accounts is significantly greater than any fees I might have saved. In particular, my Roth IRA is down almost 10% for a 9 month loss of almost $25k. This when the S&P 500 is up significantly over the same time period.

    I’m surprised that the myriad of investment writers who wrote such glowing predictions about FutureAdvisor (and other similar companies) haven’t followed up with more hard hitting articles about the average return for investors participating in these types of services. Perhaps that’s too much to ask of the journalism community?

    Buyer beware!

    • says


      With regards to performance each individuals asset allocation is different, so there is no fair way to measure returns within said systems. There have been some back testing of specific portfolio models but again that’s not exactly the same of specific investment returns. None of the firms release the data on their investor returns. So how do you propose we investigate the returns of their customers? We do have test accounts in various firms, but again your results may vary so releasing this information isn’t a fair test.

      Lastly less than one year measurement of returns IMHO isn’t a fair review of your returns. You should have at least one year and realistically 5 year return is a fair measurement.

    • Candace says

      I also switched to using FutureAdvisor in June 2014. I decided to give it a year and compare my returns with the low-cost index funds I have invested in in the past. My returns at FutureAdvisor for the past year are 2%. I agree with other commenters that FutureAdvisor should make it easier to see the returns in the accounts they are managing, and compare those returns to standard benchmarks.

  11. Mark says

    I’ve been trying to sign up to FutureAdvisor for a couple months. I encountered some bug in their DocuSign eSignature process and since then I’ve been struggling to become a Premium service client. They finally sent me an application via mail a couple weeks ago but it didn’t have any of the agreements (client, custody, disclosure) that they’re required to provide. They subsequently provided a standard Fidelity agreement via e-mail, but not the other two. I’ve had a tough time finding someone to talk to there who seems to understand the client onboarding process or can answer my basic questions. I think I tried to sign up for their service about this time in early January 2015 and two months out I’m still just looking in. Curious how difficult it was to leave their service for anyone who has commented here. Just judging by the onboarding process I’m going to pass altogether.

  12. miller says

    I have had free acct at FA for a few months. After spending several days looking at several robo-advisors and some reading around the Internet … I decided not to go with any of them. Will delete my free acct at FA.

    Something about myself:
    – engineer by profession
    – lost a lot of 401k and after tax money over the years to various advisors (robo or not)
    – My thought process resembles folks like Steve and Mike above. Take heed folks. You don’t need to experiment everything. Somethings you can learn from others.
    – being an engineer, I know a thing or two about automation. There is no magic that automates investing. Spend time … not everyday … perhaps once a quarter. Look at your investments, see what you can do to protect yourself. World is changing a lot faster now.
    – My target is … not to be homeless and begging … like that special forces vet on TV.

  13. miller says

    Funny thing is …

    When you want to buy a stock or fund or etf … you lookup and quickly find how its doing over the last week/month/year etc.

    It was strange to see no such data for these robo strategies. Why is it so hard to publish them?

    The vague charts FA provided … is just that, vague. Doesn’t match with folks’s real experience.

    If FA (or any robo advisor) is willing to provide a real assessment of their investment decisions over a period of time … like a fund/etf does at MorningStar … I’m willing to take a look at it again.

    Again, no offense robo advisors … its just not for me. Don’t want to end up on the losing side yet again.

  14. craig says

    I am having problems with the free future advisor account. I am getting a message:
    We are unfortunately unable to provide recommendations for you at this time because more than 10% of your assets are unable to be analyzed. Please contact us if you would like our Premium investment team to analyze these holdings for you.
    This is under my 401K account but as a result it is not giving me any recommendations on my IRA either. I have emailed future advisor about this and I am not getting a way to fix this or a reason why. It is not giving me an action plan – so I can’t evaluate the free service enough to see if I want the premium one. Has anyone experienced this problem? Is there a solution?

  15. Patrick says

    I was with FA over the last few months but I’ve decided to switch to something else. Primarily, I’m annoyed that they dropped support for any in-depth analysis of my 401(k).

    Yeah yeah, they told me all about how changes in a 401(k) could trigger unwanted trades in your brokerage accounts. I know it’s super difficult to keep track of all the stupid, custom funds that 401(k)s frequently include. My thought on the matter is that you don’t promise to “look at the whole picture” and then decide it’s too hard so you’re just going to go look at the same picture everyone else does. If it doesn’t work as intended, you fix it, you don’t just remove it.

    Now, all they do is offer very vague recommendations of “try to invest 10% in a REIT if you can but not if the expense is too high” and things like that. If I recall correctly, they do at least show the total amount invested in your 401(k) but it specifically says “excluded from analysis” and it doesn’t count (or even track, apparently) my 401(k) contributions. They provide a nice little summary screen that says I need to contribute x amount per month to meet my retirement goals but they only count money contributed directly to my brokerage accounts. Practically everybody who is participating in an employee-sponsored 401(k) is going to be making significant contributions that FA is just ignoring when that used to be their one really stand-out feature.

    Plus, the .5%, no matter how large the accounts being managed, is entirely too much. They use a $100k account in their marketing and that math comes out to about $10 a week or $500 a year. For $500 a year, I better be getting a lot more than some “me too!” automated investments.

    • Patrick says

      Hah! My mistake. I *thought* I had posted something similar to this but overlooked it when reading the article and comments again. Only after posting did I realize the mistake.

      Oh well, I stand by it.