Even with the simplicity and low-cost characteristics of the increasingly-popular market of index funds, investing remains a complex task that requires more attention than the average investor can provide. Chores such as re-balancing and maximizing tax efficiency are often left undone. One financial startup, FutureAdvisor, aims to automate these investing “to-do’s.”
This week at Finovate, a financial technology conference, FutureAdvisor demonstrated a premium service that would automate the management of an investment portfolio.
For a flat $19 fee per month, FutureAdvisor will handle asset allocation, portfolio re-balancing, investment of new cash and tax-loss harvesting for investors with more than $50,000 in assets. Those with $50,000 or less in assets pay a $9 monthly fee but they don’t get automatic tax-loss harvesting.
For a premium user, FutureAdvisor will handle the transfer of assets in existing investment accounts to Fidelity Investments or TD Ameritrade, the two brokerage partners that will allow FutureAdvisor to make trades on a user’s behalf. FutureAdvisor may sell off existing holdings, and possibly incur trading costs, but FutureAdvisor will only buy commission-free low-cost index funds, including Vanguard mutual funds and iShares ETFs.
“We aim to serve people who don’t have a financial advisor today, including those who think their financial advisor is too expensive or simply don’t have have enough money to attract a typical financial advisor,” said Bo Lu, CEO and co-founder of FutureAdvisor, in an interview.
