FAQs

Who is behind FutureAdvisor?

FutureAdvisor, wholly owned by Blackrock, Inc., is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC).  We are a team of finance professionals, data scientists, and software engineers.

What types of accounts are supported? Are you able to manage my 401(k)?

We currently offer Direct Management for Traditional, Roth, and Rollover, as well as individual and joint taxable accounts. Direct Management means you grant FutureAdvisor the authority to trade in the account on your behalf. We can help you rollover your 401(k) if you no longer work at your employer. However, we  do not manage 401(k) accounts if you are still at your employer and contributing to them.

I don't have an investment account, can I still join?

Yes, we can help you open Traditional IRA, Roth IRA, and taxable accounts for you. Simply let us know and we will help you get started.

Do I have to sell or liquidate my investments to have FutureAdvisor manage them?

No. We manage your accounts the way they are today. If your accounts are already with Fidelity or TD Ameritrade, we're simply a management layer you add over your existing accounts. If your accounts are elsewhere we do the paperwork to consolidate them at Fidelity or TD Ameritrade as part of FutureAdvisor's services. Securities which you use to fund your account generally will be sold in order to properly diversify your portfolio in accordance with our investment models. Securities will be sold in a tax-conscious manner in taxable accounts. See the "Taxes" section below for more information about how we strive to minimize tax impact during trading.

Who is eligible to use FutureAdvisor?

To enroll in FutureAdvisor, you must be a legal U.S. resident and U.S. citizen, at least 18 years of age, have at least $5,000 in investable assets, and you must have a valid Social Security Number or Tax Identification Number.

Why do I have to transfer my assets to Fidelity Investments or TD Ameritrade for FutureAdvisor's managed service?

We have an agreement with two industry-leading brokerages, Fidelity Investments and TD Ameritrade, to assume custody of your accounts and to enable us to trade in your accounts. Both brokerages are SIPC insured and offer robust lineups of low-fee and commission-free ETFs that we use to balance your portfolio. 

For tax sheltered accounts with less than $10,000, we help you liquidate existing investments before transfer to minimize trading fees. For tax sheltered accounts with more than $10,000, and when possible, we help you transfer the holdings as they are, to minimize the amount of time your cash is out of the market. Taxable accounts are always transferred as-is, which enables us to conduct a detailed analysis of the tax lot information for each holding before considering a sale. See the "Taxes" section below for more information about how we strive to minimize tax impact during trading.

When do you rebalance?

Following the initial rebalance, we monitor your portfolio, and rebalance when your assets drift outside their target allocation, or when life alters your investment profile, risk tolerance, or investment horizon. Depending upon the size of the account, on average, we expect to rebalance portfolios four to six times per year.

Can I override your investment decisions?

Usually not, although we do allow clients to "lock" individual stock holdings they want to keep, provided they're a relatively small portion of the overall portfolio. As your investment advisor we take responsibility for the overall suitability of your portfolio, and as such we're unable to make adjustments to suit each investor's take on the market.

How do I access my managed accounts?

Once FutureAdvisor enrolls your accounts into management, you can access your account anytime through either FutureAdvisor's website or through the brokerage website of Fidelity or TD Ameritrade as you normally would any investment account.

How do I add money to my managed accounts?

You can link your bank account to your managed accounts held at either Fidelity or TD Ameritrade. The deposit will be automatically invested within 2 business days, although we wait until you have $500 or more in cash per account before we invest.

How do I withdraw from my managed accounts?

To make a withdrawal from one of your managed accounts, log in and click "Raise Cash" from your dashboard. The funds will be available for removal from your account after 4 business days. We're here to help if you have questions about which account to withdraw from. Our phone and email contact information can be found on your Account Settings page.   

We serve as a fiduciary, which means we put your financial interests ahead of ours.  Our portfolio management service automatically monitors, rebalances, and tax-manages your current investments, adding low-fee index funds where necessary to bolster your portfolio. If your accounts are already with Fidelity or TD Ameritrade, we're simply a management layer you add over your existing accounts. If your accounts are elsewhere, we do the paperwork to consolidate them at Fidelity or TD Ameritrade as part of FutureAdvisor's services. 

Third party money movement is defined as a transfer of cash or securities between accounts with different account owner(s). This could include moving money from your account to a joint account you have with your spouse, or moving money to an escrow account for the purposes of buying a home, for example.   

We do facilitate first party money movement requests between accounts with the same owner(s), after which you can transfer to or from as needed at an outside institution. Please leave ample time for processing between institutions and for verification windows. 

If you expect to require cash or securities to move between accounts not registered in the same name as your managed account(s), please reach out to our service team at (800) 975-7199.

What are the funds FutureAdvisor uses to balance my portfolio?

FutureAdvisor utilizes the funds you already own to minimize churn and tax impact. We will add low-fee ETF index funds to your portfolio to address your specific diversification goals. Below are a sample super set of ETFs used in our model portfolios, although your portfolio may vary due to investments you transferred over when opening your account:

 Asset Class (Sample ETFs)

• US Equity Large Cap
• IVV, VTI, SCHB
• US Equity Value
• IVE, IWD, VTV
• US Equity Small Cap
• IJR, VB, SCHA
• International Equity Total
• IEFA, VEA, SCHF
• International Equity Value
• EFV, FNDF
• International Small
• SCZ, VSS, SCHC
• Emerging Markets Equity
• IEMG, SCHE, VWO
• US REITs
• IYR, VNQ, SCHH
• International REITs
• IFGL, VNQI, RWX
• Broad US Bonds
• AGG, BND, SCHZ
• Corporate US Bonds
• LQD, VCIT
• US TIPS
• TIP, VTIP
• International Emerging Debt
• EMB, VWOB
• High Yield Bonds
• HYG, JNK

*Any discussion of specific securities is intended to help clients understand our investment management style, and should not be regarded as a recommendation of any security for any person. Information concerning the performance of our managed accounts generally or our recommendations over the last year is available on request. You should not assume that future recommendations will be as profitable or will equal the performance of past recommendations. iShares ETFs are affiliated products of BlackRock, which owns FutureAdvisor.

What kinds of reporting will I get as a client?

You can sign in to FutureAdvisor at any time to view key information about your portfolio and a timeline of most recent actions taken. The custodian institution, either Fidelity or TD Ameritrade, will also send you regular statements about your accounts, in addition to end-of-year tax documents.

Does FutureAdvisor manage assets for households?

Yes, we can do householding. FutureAdvisor will manage multiple accounts collectively towards one goal. Householding enables us to use tax-efficient asset placement and tax-loss harvesting strategies across accounts. You may household different accounts for different goals, but each account can be used for only one goal. Your "household" consists of eligible accounts, defined above, under one FutureAdvisor profile, and owned by you and, if applicable, your spouse or spousal equivalent (“partner”) and managed towards one goal.

What are the pros and cons of householding with a partner?

You should evaluate the pros and cons of householding to determine whether it is right for you. 

One Risk Tolerance and Investment Horizon. Householding requires the election of one goal, one risk tolerance and one investment time horizon (determined by years to goal for retirement and major purchase goals) per household per goal. If you and your partner do not share the same goal, risk tolerance and/or years to goal (for retirement and major purchase goals), householding is not appropriate for you. 

Asymmetrical Asset Placement. Householding is based on a single Investment Objective, taking into account all of your household’s account types to determine where certain asset classes will be placed. For example, you and your partner have two accounts. Your account is a tax-deferred account (e.g., Traditional IRA) and your partner’s account is a taxable account. We may place income-producing assets like high-dividend-paying ETFs (i.e., fixed income ETFs) in the tax-deferred account in order to shield the assets’ dividend income from taxes as it grows. This may result in the placement of equity ETFs with higher growth potential and potential risk concentrated into your partner’s taxable accounts. Although the taxable and non-taxable accounts may be concentrated with specific asset classes, the accounts are being managed collectively towards one goal and one investment objective.

Privacy. For households with partners, as part of the householding process, one partner is identified as the primary partner. The primary partner is issued a username and password to view and access the householded accounts through our site. Additionally, the primary partner’s email address will be used to communicate with all members of the household. The secondary partner is not provided with a separate username and password. Householding requires the secondary partner to share personal information with the primary contact/accountholder in the household and to rely upon the primary contact/accountholder to share information and correspondence relating to the householded accounts. Householding will also result in certain notices and other important information being provided only once to the household. If you would like to keep your logins, passwords, and assets private from your partner, householding may not be for you.

Termination of Householding Relationship. For households with partners, in the event of a separation, dissolution, or just the desire to terminate the householding relationship, the partner that separates from the existing FutureAdvisor relationship will need to re-enroll in FutureAdvisor in order to continue management of his or her accounts. Please note that the returns of one partner prior to such termination may be materially different from those of the other partner, as the assets were intended to grow toward one collective goal. Additionally, trading activity may be necessary (for both the remaining partner and newly enrolling partner) in order to rebalance accounts after termination of the householding relationship.

What are the tax implications of signing up for FutureAdvisor?

FutureAdvisor’s tax optimization strategy is designed to consider the potential tax impact of selling a security held in your portfolio. When your portfolio is rebalanced, the we consider capital gains and tax implications to minimize the tax impact to your portfolio. 

Our portfolio rebalancing algorithm is designed to limit realized short-term capital gains to the greater of $200 or 5% of the position value.  Exceptions may be made in certain circumstances, including liquidating a position to avoid fund fees or future transaction costs, and in order to meet cash targets such as strategic cash allocations or client instructions to hold or increase cash.  With respect to long-term gains, the service will balance a variety of factors within the portfolio to determine optimal treatment, considering your years to goal, portfolio size, cash needs, and the potential diversification impact of a given set of transactions.  Rebalancing a portfolio may cause investors to incur tax liabilities. References to tax strategies that FutureAdvisor considers in managing accounts should not be confused with tax advice. FutureAdvisor does not provide tax advice. Clients should consult with their personal tax advisors regarding the tax consequences of investing

How does automated tax loss harvesting work?

FutureAdvisor’s systems are designed to monitor each of your taxable account holdings daily, looking for positions with at least $500 and 1.5% in harvestable, taxable losses given the current market prices of the ETFs. To harvest taxable losses, we sell the tax lots with unrealized losses and purchase a preselected similar index fund within the same asset class. In this way, we bank the losses for tax purposes without changing the overall portfolio asset allocation. At the end of the year, we're able to use these taxable losses to offset your gains for the year and/or ordinary income. 

References to tax strategies that FutureAdvisor considers in managing accounts should not be confused with tax advice. FutureAdvisor does not provide tax advice. You should consult with your tax advisors regarding your individual situation. 

Wash sales 

An Internal Revenue Service (IRS) rule prohibits a taxpayer from claiming a loss on the sale or trade of a security in a wash sale. A wash sale occurs when an individual sells or trades a security at a loss, and within 30 days before or after this sale, buys a “substantially identical” stock or security. A wash sale also results if an individual sells a security and their spouse buys a substantially equivalent security. We have internal systems and policies designed to prevent wash sales in individual and householded. However, we’re unable to factor in trades for accounts not held within a household. Our internal systems and policies are designed to prevent wash sales in individual and householded accounts. However, we are unable to factor in trades for other

References to tax strategies that FutureAdvisor considers in managing accounts should not be confused with tax advice. FutureAdvisor does not provide tax advice. You should consult with your tax advisors regarding your individual situation.

Can FutureAdvisor assist me with tax planning?

References to tax strategies that FutureAdvisor considers in managing accounts should not be confused with tax advice. FutureAdvisor does not provide tax advice. Clients should consult with their personal tax advisors regarding the tax consequences of investing.

How much does FutureAdvisor cost?

We charge a flat annual management fee of 0.5% of assets directly managed. This means that assets we don't directly trade in, such as your current employer 401(k), are not included for billing purposes. 

Our 0.5% management fee is billed as calendar-quarterly installments of 0.125% of assets directly managed. The Subscription Fee is billed to Managed Service clients and collected in four quarterly installments generally at the beginning of January, April, July, and October. The valuation used to calculate the management fee will be the net asset value of the assets in your portfolio as of market close on the last business day of the preceding quarter. If you have more than one account with us, including a taxable account, we will deduct your fees pro-rata from your accounts.

FutureAdvisor offers a limited fee promotion for active, inactive and veterans of the U.S. Armed Forces. Verification of duty will be requested. Please reach out to learn more. 

Will I incur trading commissions or other fees, especially during rebalancing?

You may incur some trading commissions during your portfolio's initial rebalance, as we divest some of your existing holdings to bring your portfolio into balance.

At TD Ameritrade stock/ETF trades are now free, but mutual funds may cost up to $24 per trade, depending on the fund. Fidelity Investments also offer free trading of stock and ETFs with a maximum of $50 per mutual fund trade, depending on the fund.

Even though many trades are now free at our supported brokerage platforms, we still take any potential transaction costs into consideration and only choose to incur them if the projected benefits outweigh the costs.

Will my current brokerage charge me account closing and/or transfer out fees?

It depends on which brokerage you utilize prior to signing up with us. If your accounts are already held at Fidelity or TD Ameritrade, or are being transferred from Vanguard, these fees will not apply. Most other brokerages and mutual fund companies charge fees ranging from $50 to $100 per account to transfer. Check with your current brokerage for details.

Will I be charged account opening or account maintenance fees?

No, you will not. Fidelity and TD Ameritrade do not charge account opening fees or account maintenance fees on institutional accounts, the kind used by FutureAdvisor.