CI First Look – FutureAdvisor

by on Apr 23, 2012

altRecently, we came across FutureAdvisor, a financial planning website that strives to service the average investor. Launched in May 2010, FutureAdvisor provides unbiased and affordable advice using automated proprietary computer algorithms.

FutureAdvisor’s Online Customer Experience
The enrollment process requires the user to set an email address and password for login and provide additional personal and financial information. Additionally, users must either import investment accounts or manually input investment information. The site currently cooperates with 50 brokerage houses, allowing users to import account information from firms such as Fidelity, Vanguard and Wells Fargo.  In-depth analysis and suggestions generate immediately upon enrolling.

FutureAdvisor Homepage

The FutureAdvisor private site consists of five tabs – Personal Profile, Financial Profile, Asset Allocation, Analysis and Recommendations.  The Personal Profile, Financial Profile and Asset Allocation tabs merely restate information entered while enrolling. The Analysis tab displays portfolio fee and tax efficiency goals and explains how successfully a portfolio has met its diversification goals.

The Recommendations tab lists a number of personalized investment suggestions. Suggestions include the purchase and/or sale of individual securities to create a more balanced portfolio. The Recommendations page also analyzes specific investment features, such as exposure to domestic stock, foreign stock and emerging markets, through a checklist summary of investment accounts.

FutureAdvisor Recommendations For Your Account

An Ask an Advisor button is ubiquitous throughout the site in the left column. Selecting it generates an AJAX box allowing users to submit questions to advisors with an email response promised within 48 hours. The FutureAdvisor Blog is also promoted on the site and contains a number of thought-provoking posts focusing on topics such as retirement readiness, managing your investments, capital gains/losses, etc.

FutureAdvisor Ask an Advisor

FutureAdvisor’s Services
While FutureAdvisor does offer fee-based subscription services (gold and platinum packages cost $49 and $195 a year, respectively), it also provides a free service that includes asset allocation recommendations and a personalized 401(k) analysis. The gold package also offers users one scheduled video call with an advisor annually, while the Platinum Package includes unlimited access to advisors via video calls.

Site Security & Terms
While the site’s security appears to be more than adequate – 256-bit SSL encryption and all practices monitored and secured by Verisign – its Terms of Use may be slightly troubling to some users. Enrolling with the site implies an agreement that usernames, passwords and other log-in credentials be provided for all investment accounts. Additionally, enrolling with the firm grants FutureAdvisor a limited power of attorney which might not sit well with some users.

Closing Thoughts
FutureAdvisor provides effective financial planning services, the majority of which are available for free. While agreeing to the company’s Terms of Use may be difficult for some users, the site’s analysis and recommendations offer a high level of detail and are easy to understand. The use of personalized infographics serves to further illustrate the data and the user-friendly design makes navigation easy throughout the site.