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Anyone use FutureAdvisor?
Old 12-02-2014, 10:54 AM   #1
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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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Old 12-02-2014, 12:32 PM   #2
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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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Old 12-02-2014, 01:23 PM   #3
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Is this similar to Personal Capital or CNN's Money Portfolio?


https://www.personalcapital.com/


https://portfolio.money.cnn.com/
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Old 12-02-2014, 02:09 PM   #4
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Originally Posted by RonBoyd View Post
Is this similar to Personal Capital or CNN's Money Portfolio?


https://www.personalcapital.com/


https://portfolio.money.cnn.com/
my quick review of the two sites you listed leads me to believe they are similar to FutureAdvisor.
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Old 12-02-2014, 02:09 PM   #5
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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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Old 12-02-2014, 03:14 PM   #6
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Add to the mix of these robo-advisors: Charles Schwab Intelligent Advisors. A free service to launch in 2015. Here's a review:

Schwab Intelligent Portfolios: Game Over For Betterment and Wealthfront?
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Capital Gains Taxes and FutureAdvisor Premium
Old 12-02-2014, 04:38 PM   #7
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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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Old 12-02-2014, 05:23 PM   #8
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Quote:
Originally Posted by RockyMtn View Post
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.
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...
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Anyone use FutureAdvisor?
Old 12-02-2014, 05:27 PM   #9
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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.


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Old 12-03-2014, 10:29 AM   #10
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Pretty much customer prospecting tools IMHO.
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Old 12-03-2014, 10:37 AM   #11
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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.


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