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Interview with Bo Lu, CEO of the online investment tool FutureAdvisor - Raleigh Technology

Web-based investment service, FutureAdvisor, is the topic of our interview today. FutureAdvisor is an online investment tool that also helps manage your investments by using algorithms in conjunction with real people. It's not just for those with hundreds of thousands, or millions, however, FutureAdvisor also caters to those who are new to the game, but looking to invest their money wisely. find penny stock brokers and list of information about penny stock brokers for best local options penny stock brokers visit our directory for Penny StocksInvesting can be a complex procedure, one that many of us are unfamiliar with and FutureAdvisor helps alleviate some of the worries associated with investing.

We were able to talk with Bo Lu, CEO of FutureAdvisor, about his service to find out more behind the inspiration of FA and to get a better understanding of how the "investment algorithm" works. Keep reading below!

Examiner: Care to introduce yourself, and your role at FutureAdvisor?

My name is Bo Lu and I'm the CEO and cofounder of FutureAdvisor.

Examiner: What inspired the creation of FutureAdvisor?


Investing and financial services are something I've been interested in since I was young. My parents engrained financial discipline into me from day one. As I grew older, I realized that the investment know-how I took for granted was something most of my colleagues didn't know or have. By the time I was working at a tech company after college, it was pretty common to have friends or family asking me for investment tips or advice. It was around that time that I met Jon Xu, who had a similar background and nearly identical experience with his friends and loved ones.

We realized that there were millions of people like our friends - looking for expert advice, but without the $500,000 or even $1,000,000 minimum required by traditional advisors. We were happy to help people one at a time, but also thought to themselves, "there has to be a better way!" The rest is history. We quit our day find penny stock jobs, and founded FutureAdvisor to automate the process and bring high quality wealth management to everyone.

Examiner: What is FutureAdvisor, in your words?

FutureAdvisor helps our clients reach their goals sooner. The world of investing is complex, and a lot of consumers hesitate because they have a difficult time not only making sense of all the information that's out there, but crucially, figuring out how to put find trading online free it to practice within their accounts, and for their goals. We allow clients to link up their existing accounts -- whether they're geared towards college, retirement, general investing, or anything else -- and understand what specific steps they can take to improve their chances of succeeding in the market. Then, clients can hire us to manage these investments day-to-day, and many thousands have done so.

Examiner: Who is FutureAdvisor for? Those new to the game or for veterans of the financial market?

In speaking with our clients over the years, we've discovered that we really have a diverse user base. Our clients range from those fresh out of college looking for guidance on their new 401(k) and small investment account, to those with many millions of dollars who strongly believe in the tenets of our investment philosophy, based on Modern Portfolio Theory.

That said, the bulk of our user base are pretty "normal" everyday Americans -- and we're excited to be serving them, as we think this segment of the market has been severely underserved to date. Some clients are starting to think really seriously about their investment accounts for the first time, now that they have a growing family to care for -- and others are recovering finance junkies who simply no longer have the time to keep up with their portfolios in the way they'd like. Investing can feel like a full-time job in and of itself, so it's understandable that many clients with full-time jobs in other areas choose to trust their portfolios to someone who can give their investments daily attention.

Additionally, we have a team of investment advisors in-house, and the questions they field range from the most simple -- "should I open a Roth or Traditional IRA?" to incredibly complex, e.g. "here's my situation and where I want to end up 30 years from now -- and my finances are heavily intertwined with the rest of my family's -- how do I get there?" No matter your level of investing savvy, we work with your investments where they are, and help you get to the best place you can be in the markets.

Examiner: Do you need a preexisting investment account to join?

Not at all! A great thing about our offering is that we offer many options for clients, depending on where you're coming from:

For those without any existing investment accounts, we can open accounts and help get you into the markets.

For those who join us with a complicated mess of accounts -- a few old 401(k)s here and there, a semi-neglected Roth IRA, a current investment account, and some college accounts for the kids -- we tailor our advice to where you are right now.

We can help you roll over and consolidate old 401(k)s, ensure your kids' college accounts are making the grade either at their current custodians or with a new provider, and take a look at whether the hot stock picks in your old brokerage account are still worth hanging on to. We can even manage current-employer 401(k)s (or at least manage other accounts around them) in certain situations. And for veterans, active-duty servicemembers (who get a year of free management with us!), and others with government Thrift Savings Plan accounts, we can provide TSP-specific recommendations.

In doing all of this. we aim to make the process as pain-free as possible -- we keep your accounts at their existing custodians (e.g. Fidelity, TD Ameritrade, etc) whenever possible, and if we do need to move assets around, we handle the transfer process and minimize taxes to make things as smooth as possible.

And, last but certainly not least -- being able to view all of your accounts in one streamlined dashboard, and have them managed truly all together and holistically, is a huge benefit of our users. No longer are you making trades in your brokerage or 403(b) accounts in isolation -- now, they all tie back together and work towards the same strategy.

Examiner: How is portfolio management handled on a daily basis?

If you worry that "algorithmic wealth management" means out-of-control computers are trading madly within your investment accounts -- take a deep breath and rest easy. A better way to describe our approach is that we have an incredibly smart algorithm (that never sleeps or gets tired!) working in direct partnership with incredibly smart humans.

Our portfolio manager, senior team (with decades of industry and academic experience), and investment council have worked many long hours to create an algorithm that can execute on the principles of Modern Portfolio Theory, a tried-and-tested approach used by many fellow investors. The algorithm works tirelessly to keep an eye on client's portfolios -- allowing a superhuman level of insight that would be impossible to receive from a traditional financial advisor -- and when it recommends trades, our portfolio manager reviews them for suitability before they're executed.

It's also worth noting that we don't always make the same trades en-masse in all clients' portfolios, as our approach is not one-size-fits all. Rather, trades are recommended in accordance with a client's existing holdings, age and time to retirement, risk tolerance, account types, portfolio size, goals, wishes, and so on. And, our clients' holdings are managed holistically -- trades made in your IRA are made with the knowledge of what's also going on in your taxable accounts, 401(k), and so on.

Examiner: Care to elaborate on how "automated wealth management" and your algorithm work?

A lot of this is certainly answered above. While this may sound exciting and novel, it's worth noting that this approach isn't new to the market. Many traditional financial advisors and institutions currently rely on algorithms to help them identify opportunities to trade in clients' portfolios. We simply cut out the middleman and bring these services direct to consumers. This direct approach allows consumers to become more educated about and involved in their portfolios, and to understand exactly what they're paying for -- e.g. daily monitoring for trading opportunities, tax-loss harvesting, etc.

Beyond the algorithm, we also have a fantastic team of humans, including registered advisors, who are here to listen and chat whenever clients would like to discuss their strategy, or questions, or anything else. And as we continue to expand our offering and product, our entire staff of engineers, advisors, designers, and so on take client feedback very seriously as we continue to improve our product. Though we're algorithmically-driven, humans (both advisors and clients) play a huge role here, too -- again, it's really a partnership where human and machine leverage the best of each other to help serve our clients better than before at a price point that was previously unheard of.

Examiner: What kind of fees are incurred by using FutureAdvisor?


Our automated management service costs a low 0.5% annually, and we only charge that on assets we directly manage. This goes beyond just making trades on your behalf, however -- we check daily for opportunities to capture tax savings via Tax-Loss Harvesting, and can create additional stock market training tax savings by smartly placing assets across all of your accounts. Many of our clients find that the tax savings and intelligent rebalancing we offer pay for the management fee on their own.

However, our recommendations are completely free. Anyone can create an account, link their investments, and within two minutes, see what we recommend for their portfolios. They can make these changes themselves for free, for as long as they'll like -- our recommendations automatically update as both the user's portfolio and broader markets shift.

We also. find olde discount stockbrokers and list of information about olde discount stockbrokers for best local options olde discount stockbrokers visit our directory for Stockbrokermanage college savings accounts completely free, forever. At, users can create a customized college saving plan for their family. Our tool doesn't just tell you about how much to save -- it truly crafts an individual plan for you based on your income, desired level of savings, existing assets, children's future plans, state of residence, and so on. We look at a myriad of account types and state plans in creating your plan.

As a Registered Investment Advisor, we are never incentivized to recommend one trade or position over another. Our portfolio is designed to seek out and favor low-fee, commission-fee funds as much as possible -- not just because this is cheaper for our clients, but because a wealth of research has shown that fund fees and performance are negatively correlated (e.g. cheaper funds do better). While clients may encounter the occasional trading or commission fee, we always perform a cost-benefit analysis of making the trade before doing so. (e.g. for those with larger portfolios, it may be worth paying a one-time $7.95 commission to move to a fund that offers greater overall savings via a lower fee).

We'd like to thank Bo for taking the time to answer some of our questions about his business. If you'd like to find out more, make sure to check them out here.

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