FutureAdvisor
 | |
| Private | |
| Industry | Investment services |
| Founded | 2010 |
| Headquarters | San Francisco, California, United States |
Area served | United States |
Key people |
|
| Products | Financial services, asset management, portfolio management |
| AUM |
$600 million [1] [2] |
| Owner | Sequoia Capital, Canvas Venture Fund, Devonshire Investors |
Number of employees | ~45 (2015)[3] |
| Website |
futureadvisor |
FutureAdvisor is a digital investment manager registered with the U.S. Securities and Exchange Commission and based in San Francisco. Founded in 2010, the company is reported to have $600 million in assets under management.[1][2][4] Among its investors are Sequoia Capital, Canvas Venture Fund, and Devonshire Investors, the private investment arm of the owners of Fidelity.[5]
On Wednesday, August 26, 2015, FutureAdvisor announced its intent to be acquired by BlackRock.[6]
Product
Like other robo-advisors, FutureAdvisor automates portfolio management with software that adjusts for investors' age and risk appetite.[7] Robo-advisors apply modern portfolio theory, the Black-Litterman model and other algorithms to manage investments passively, much like a traditional financial adviser. They adjust asset allocation according to notions of a "balanced" portfolio, rather than pursuing "active" strategies like market timing, stock picking and value investing. FutureAdvisor manages assets directly across multiple Fidelity Investments or TDAmeritrade brokerage accounts and IRAs.[8]
College Investments
FutureAdvisor manages tax-advantaged educational investment accounts such as 529s, Coverdell ESAs, UTMA/UGMAs for free.[9] The company has a financial planning service that helps investors estimate the price of college tuition for their children. It also helps them select and create educational savings accounts online, and manage those investments until the day the funds need to be used for college or other educational expenses. In addition, FutureAdvisor automates the monthly contributions to those accounts, as well as the disbursement to schools when the child attends college.[10]
Methodology
FutureAdvisor uses index funds and low-fee exchange-traded funds to create portfolios that adhere to modern portfolio theory. Under MPT, the proportion of assets allocated to foreign and domestic equities, bonds and Real estate investment trusts should vary according to an investor's age and risk appetite.
History
FutureAdvisor was founded by two former Microsoft engineers - Bo Lu and Jon Xu - in Seattle. The company graduated from the incubator YCombinator in 2010, took $1 million in seed funding, and raised $5 million in Series A funding from Sequoia Capital in 2012. Canvas Venture Fund led FutureAdvisor's Series B round worth $15.5 million in 2014.[11]
References
- 1 2 "Online RIA Sets Sights on Mass Affluent". Financial Planning. 2014. Retrieved November 14, 2014.
- 1 2 "Investment Adviser Public Disclosure". U.S. Securities and Exchange Commission. 2012.
- ↑ Shieber, Jonathan (May 21, 2014). "Wealth Management Startup FutureAdvisor Raises $15.5 Million". TechCrunch.
- ↑ "We asked 4 robo advisers and 4 human advisers for portfolios for the same investor". Dow Jones Marketwatch. 2015. Retrieved April 22, 2015.
- ↑ "Fidelity Investments Forges Alliance With Low-Cost Player". The New York Times. 2014. Retrieved November 14, 2014.
- ↑ "Announcement: BlackRock acquires FutureAdvisor".
- ↑ Lieber, Ron (April 12, 2012). "Financial Advice for People Who Aren’t Rich". New York Times. p. B1.
- ↑ Chapman, Lizette (May 21, 2014). "FutureAdvisor Raises $15.5M to Bring Automated Financial Advice to Masses". Wall Street Journal.
- ↑ Malito, Alessandra. "Robo-adviser jumps into college savings market". InvestmentNews. Retrieved 11 December 2015.
- ↑ Moyer, Liz. "Robo Adviser Tackles College Savings". Wall Street Journal. Retrieved 11 December 2015.
- ↑ Sanati, Cyrus (May 21, 2014). "How FutureAdvisor plans to shake up wealth management". Fortune.
External links
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