“Millennials will never retire!” is the worst headline of all time, and it’s probably not even true. If you want to make sure you’re on track to avoid being part of that horrifying thinkpiece, FutureAdvisor has your back.
It’s a fintech company that offers you (free!) retirement advice and calculators, based on your accounts, your age and your goals.
Once you’re ready, they’ll even manage your money for you – but you don’t have to dive into that right away.
How it works
Before FutureAdvisor can help you figure out if – no, when – you’ll be able to retire, it needs to know what your current situation looks like. When you sign up, you’ll answer questions about your age, your goals, your timeline for those goals, and connect your existing investment accounts.
Then, the magic happens.
FutureAdvisor has built a whole range of calculators that look at your current situation and give you clearly written, plain language advice to help you achieve your goals. Their main focus is on retirement planning, since that’s often your most complicated goal, and the one that comes standard with a hefty dose of omg-what-is-even-happening.
Once you’ve given them all your info, they help you figure out how much you should be saving every month for retirement, and show you the impact small changes will make over time.
For example, if you think that an extra $30 won’t make a difference to your retirement? Think again, friend. FutureAdvisor has the tools and the calculations to make you realize that yes, skipping a round or two at the bar can help you retire a rich human.
Tailored recommendations, no commitment required
One of the best things about FutureAdvisor is that you don’t have to have all your money saved or invested with them to get great advice. In fact, to start out, you don’t have to keep any of your money with them.
They can connect to your existing bank accounts and investments to give you solid, real-life advice without needing to manage a single dollar of your money. That part comes later, and only if it makes sense for you.
You can still D.I.Y.
Unlike most roboadvisors, that take all the D.I.Y. out of investing, FutureAdvisor lets you stay behind the wheel for as long as you’d like. You can buy and sell any kind of investment you want if that’s your jam, and FutureAdvisor will check your investments against their recommended portfolios.
If that seems really abstract, think of it this way. If you’ve bought a bunch of ETFs, FutureAdvisor will check them out and say “Hey, you’re really heavily invested in U.S. stocks through those ETFs. You should only have about 10% of your portfolio in domestic equity right now, so uh… fix it.” (Minus that last part, they’re very professional.)
This level of advice, and using their tools to check in on your investing plans, is free forever. Which, as you know, should make you question how they make money – so let’s get to it.
Get your money managed by professionals
If all this talk about buying ETFs and managing your exposure to U.S. equities has your head spinning, well, me too. I’m more of a hand-over-the-reins kind of investor, and luckily, FutureAdvisor can handle that action.
They can manage your money for you if you’re feeling overwhelmed by all the advice, and they charge a flat fee of 0.5% to do that. On top of that flat fee, you’ll also pay for trading fees and the fees associated with the funds they use to build your portfolio, but even still, their average fee works out to about 0.65%. That’s way below most professionally managed portfolios, so you’re still ahead of the game.
On top of that, they’re a fiduciary
A fiduci-what-now? Friends, this is the one word you actively want to hear when you’re talking to people who manage your money.
A fiduciary is a third party (like your investment advisor) who has a legal obligation to act in your best interest. This is in contrast to the standard that most money management companies use, which is the suitability standard: is this a suitable investment for my client?
The difference between a suitable investment and the best investment is where high fees and ultra-high commissions sneak in, and it’s bad news for your money most of the time. The bottom line is this: if someone is managing your money and advising you on investments, you want them to be a fiduciary. Every time. No exceptions.
Since FutureAdvisor’s professional investment management team holds themselves to the fiduciary standard, they’re legally bound to make the right decisions for you and your money. That’s definitely what you want to hear when you’re trusting someone with the money that’s going to let you retire someday.
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*This piece is meant only to expand awareness of available financial tools and products and should not be considered an official endorsement of the product or its outcomes by GenFKD.