What fees can FutureAdvisor help me reduce or avoid?

There are three types of fees to consider in a managed portfolio:

  1. The advisor’s fee for management (called a management or advisory fee)
  2. The expense ratio of the fund or ETF (cost of operating the fund)
  3. The commission costs charged per transaction (buying and selling a fund)

We charge a management fee of 0.5% annually of the assets we manage — and there are no hidden fees, or a cancellation fee. Traditional advisors typically charge 1-1.25% for investment management. Part of our fee's value is the time we spend in trying to reduce the costs below, which might take an investor hours of research for a well-diversified portfolio.

FutureAdvisor selects only funds where the expense ratio is low relative to the industry. We use ETFs primarily because of their low cost relative to mutual funds, with an average cost of approximately 0.15%. Many mutual funds and ETFs charge 0.5%-2.0% for comparable securities.

FutureAdvisor also specifically selects ETFs that do not carry a commission cost where possible. The only funds that carry commissions in the portfolio are funds with exposure to less common asset classes where fewer options exist or if a lower expense ratio would outweigh the commission costs in your particular portfolio.

Finally, FutureAdvisor manages each client’s account with fees in mind - we will only incur a cost on a trade when the ultimate pro outweighs the cons — a philosophy we strictly adhere to.