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Retirement Account<br />
Education Account<br />
Digital Wealth Management<br />
FutureAdvisor Overview<br />
Landscape Category(s)<br />
Direct-to-Consumer<br />
Digital Wealth<br />
Management<br />
B2B Digital Wealth<br />
Management / White<br />
Label Solutions<br />
FutureAdvisor was<br />
acquired by<br />
BlackRock in<br />
August 2015<br />
CEO:<br />
Headquarters:<br />
Company Overview<br />
M&A and Financing History<br />
Date Size ($ mm) Investor / Acquirer (s)<br />
08/26/15 na Acquired by BlackRock<br />
Bo Lu<br />
San Francisco, CA<br />
Founded: 2010<br />
■<br />
acquired by<br />
FutureAdvisor is an electronic investment advisor that<br />
links investors’ accounts and provides automated wealth<br />
management based on Modern Portfolio Theory<br />
– Investors can retain their individual investment<br />
accounts at Fidelity or TD Ameritrade and<br />
FutureAdvisor acts as a management layer over<br />
existing accounts (will recommend portfolios that<br />
consider investors’ other investments)<br />
– Each algorithmic trade is monitored by a real person<br />
• In early 2016, BBVA Compass, LPL Financial, RBC, and<br />
Saxo Bank partnered with BlackRock and FutureAdvisor<br />
to offer digital investment services (1)<br />
Invests internationally<br />
to increase<br />
diversification<br />
Products & Services Overview<br />
A free portfolio analysis and recommendation<br />
• FutureAdvisor links accounts and analyzes investors’ current<br />
portfolios<br />
• Provides free analysis and recommendations<br />
• Transfers investors’ assets to a Fidelity or TD Ameritrade custodial<br />
account<br />
• Automates its investment plan according to Modern Portfolio<br />
Theory and FutureAdvisor’s algorithmic recommendations,<br />
reviewed by the investment team<br />
• On-call financial advisors for investors, accessible via phone, online<br />
chat or email<br />
• Free for the first three months<br />
• 0.50% annual fee<br />
Completely free college savings accounts<br />
• Asks questions to estimate college cost and design a plan to meet<br />
goals and budgets<br />
• Scans all account types in the country to find the most tax-efficient<br />
and flexible investment vehicle for each investor<br />
• Consolidates funds into a TD Ameritrade or Fidelity custodian<br />
account based on the chosen education account<br />
• Automatically invests contributions and changes the portfolio<br />
balancing as the age and tax implications change, reducing risk<br />
closer to the target horizon date<br />
• Disperses the funds to the requested school<br />
Investment Philosophy<br />
Invests in low-fee<br />
index funds<br />
Dynamic Fund Selection<br />
based on pre-existing<br />
investments and tax<br />
situations<br />
05/21/14 $16<br />
Canvas Venture; Y Combinator; Sequioa<br />
Capital; Devonshire Investors<br />
08/22/12 6 Sequioa Capital; Kapor Capital<br />
08/03/10 na Y Combinator; Great Oak Venture Capital<br />
Source: Company website, LinkedIn, CrunchBase, PitchBook.<br />
(1) Investment News.<br />
Tax-loss harvesting<br />
for accounts with<br />
$20,000 or more<br />
Uses Modern Portfolio Theory<br />
to calculate the efficient<br />
frontier and maximize return<br />
at given risk levels<br />
Automatically<br />
rebalances to avoid<br />
losses in downturns<br />
88
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