San Francisco-based FutureAdvisor is a leader in digital wealth management. Its technology-enabled advice capabilities include: personalized advice that can look holistically across clients’ brokerage, IRA and 401(k) accounts; tax-efficient portfolio management; mobile and web applications; online account enrollment; and multi-custodian support, according to the statement.
As is the case with nearly all robo advisors, FutureAdvisor offers clients all-ETF portfolios. The firm custodies client assets with Fidelity and TD Ameritrade. BlackRock has an ETF relationship with Fidelity, including commission-free trading on Fidelity’s platform and Fidelity’s sector ETFs.
FutureAdvisor uses “dynamic cost analysis on many available ETFs, ensuring that your portfolio is designed efficiently for your unique portfolio size and the number and types of accounts you hold. This takes into account ETFs’ bid/ask spread (the difference in price between what investors are willing to buy and sell the fund for, which can be as high as 5%). Our strategy also considers trade-offs between ETF commission fees and expense ratios to help minimize the total cost. For small accounts, commission fees often have a larger impact, whereas for large accounts, expense ratio alone can represent the largest fee,” according to the firm’s website.
BlackRock has also recently been expanding its model ETF portfolio footprint in Europe.