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Anyone use FutureAdvisor?
12-02-2014, 09:54 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: North Scottsdale
Posts: 1,545
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Anyone use FutureAdvisor?
Came across this site which is available free or for a fee should you choose the Premium service. Plug in your accounts and it gives recommendations and projections on performance, diversity, fee efficiency and tax efficiency.
Pretty easy to use and I can't say that I totally disagree with some of their suggestions. They pretty much use a index fund/low cost etf approach. Individual stocks are frowned upon.
My question....implementing their recommendations is going to trigger a ton of LTCG's for me. Does it make sense to bite the bullet and trigger the LTCG's to move into more cost efficient etf's and index funds. If I decide to go ahead I would wait till after the first of the year and do so as part of my annual rebalancing. My AA isn't far off from their suggestions and my return projections are within 1% of their returns. However, my diversity among asset classes and fee efficiency are somewhat poor based on their analysis.
Maybe I use a hybrid approach taking into account some of their suggestions but not the wholesale changes they propose.
Any thoughts would be appreciated!
https://www.futureadvisor.com
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FIRE'D in July 2009 at 51...Never look back!
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12-02-2014, 11:32 AM
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#2
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Full time employment: Posting here.
Join Date: Aug 2014
Posts: 584
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I have used them as a check on my investments. I don't fully agree with their choices but, like you, I am not far off. I think the free tool doesn't fully calculate all the costs/benefits of some manged accounts and I can see that the tool would not consider the costs and taxes of transitioning to another AA. I didn't see any big advantage for a paid account--its too easy to move funds around yourself.
That said, it is worthwhile for another point of view and, unless there is a security risk for disclosing your financial data, worth doing the exercise. I certainly suggest it for those who don't have a clue about investing and are tempted to go do a typical financial adviser.
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12-02-2014, 12:23 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 6,256
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__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
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12-02-2014, 01:09 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: North Scottsdale
Posts: 1,545
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Quote:
Originally Posted by RonBoyd
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my quick review of the two sites you listed leads me to believe they are similar to FutureAdvisor.
__________________
FIRE'D in July 2009 at 51...Never look back!
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12-02-2014, 01:09 PM
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#5
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Full time employment: Posting here.
Join Date: Aug 2014
Posts: 584
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More similar to the first one. These two look like they have some interesting analysis that FutureAdvisor lacks--specifically the geographic feature.
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Capital Gains Taxes and FutureAdvisor Premium
12-02-2014, 03:38 PM
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#7
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Confused about dryer sheets
Join Date: Dec 2014
Location: San Francisco
Posts: 1
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Capital Gains Taxes and FutureAdvisor Premium
Hi RockyMtn -
I work at FutureAdvisor, and I hope I can shed some light on how we work.
First of all, our free product doesn't take capital gains taxes into account, because we don't know enough about our free users to do that.
On the premium side, we ask for information about your income and marital status, which means we'll make different and more tax-efficient recommendations.
I can explain the differences between Personal Capital, FutureAdvisor and the CNN page.
Personal Capital is a conventional financial advisory firm with a nice web application. It has an office of human financial advisors based in Denver. They will only work with you if you've got more than $100,000 in investable assets.
FutureAdvisor's minimum is $10K. We manage investments with software, which is why we're able to offer it to more people. We focus on tax efficiency, risk diversification and low fees.
The CNN Money page is based on SigFig's recommendations. SigFig is primarily a broker recommendation service, with an investment management arm.
Hope that helps!
Chris
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12-02-2014, 04:23 PM
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#8
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,169
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Quote:
Originally Posted by RockyMtn
My question....implementing their recommendations is going to trigger a ton of LTCG's for me. Does it make sense to bite the bullet and trigger the LTCG's to move into more cost efficient etf's and index funds. If I decide to go ahead I would wait till after the first of the year and do so as part of my annual rebalancing. My AA isn't far off from their suggestions and my return projections are within 1% of their returns. However, my diversity among asset classes and fee efficiency are somewhat poor based on their analysis.
Maybe I use a hybrid approach taking into account some of their suggestions but not the wholesale changes they propose.
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Personally, if I were making tweaks/changes to my holdings in taxable accounts, I would do it when I'm doing my rebalancing, and perhaps over a few rebalancings, depending on the amount of changes.
You mention you're close to their suggestions... so perhaps you do some of the changes one year, then others the next year...
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
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Anyone use FutureAdvisor?
12-02-2014, 04:27 PM
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#9
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Recycles dryer sheets
Join Date: Aug 2013
Posts: 437
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Anyone use FutureAdvisor?
I can confirm that future advisors free version had horrible recommendations when you take into account capital gains.. They should really make it clearer to users of the free site that one shouldn't do what it recommends. The paid service costs for me were way too high to consider them as paid advisors.
Sent from my iPhone using Early Retirement Forum
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12-03-2014, 09:29 AM
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#10
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Full time employment: Posting here.
Join Date: Nov 2009
Posts: 592
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Pretty much customer prospecting tools IMHO.
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12-03-2014, 09:37 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Sep 2012
Posts: 1,568
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If you are going to switch, and if you own mutual funds that you'd be selling, might make sense to sell now if the funds will have significant capital gain distributions.
Sent from my iPhone using Early Retirement Forum
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You know that suit they burying you in? Thar ain’t no pockets in that suit, boy.
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