Managing the big picture of your finances and investments can feel overwhelming. For that reason, many people hire financial advisors to help.
In the last few years, many online companies started offering robo-advisor services to lower financial advisory fees by having technology handle your finances for you. Those companies often lack the human touch that makes many financial advisor services effective.
Farther Finance aims to bridge the gap between the two approaches. They offer a human-assisted financial advisory product that also uses technology to do the heavy lifting at a lower cost than a traditional financial advisor. Here’s what you should know.
What is Farther Finance?
Farther Finance is a financial advisory firm focused on providing personalized advice from an independent expert with the added aid of technology. The company, founded in 2019 by Brad Genser and Taylor Matthews, is relatively new but has a clear vision for serving its customers.
While Farther Finance doesn’t have a minimum balance requirement, they focus their services on people who have outgrown robo-advisors but don’t want to pay the higher fees of traditional financial advisors or don’t have the minimum investment amounts those advisors require.
The advisor helps you build a plan and meets with you at least quarterly to help you deal with new situations and stay on track. They make you a customized portfolio based on your goals rather than the automated portfolios other firms may offer.
How does Farther Finance work?
Signing up for an account is easy and only takes about 10 minutes. You start by clicking “Get Started” on their homepage.
This takes you to a landing page where you click “Sign Up.”
Here you give Farther Finance your contact information, including your name, email address, and phone number.
Farther Finance then sends you an email. Click the email link and you’ll return to the Farther Finance window.
Once you do, Farther Finance introduces you to your financial advisor. You can scroll through the advisors using the arrow buttons, read their bios, and then schedule a meeting with the advisor you’d prefer.
They then ask about your income and family situation, as well as your investable assets. Once they have this information, they recommend scheduling a session with an advisor to get started.
They also allow you to explore the Farther Finance dashboard, but all actions are greyed out until you first meet with an advisor.
You can use their tools while you wait, though. They include:
- 529 calculator.
- Housing calculator.
- Retirement calculator.
- Financial health checklist.
How much does Farther Finance cost?
Farther Finance’s costs are extremely straightforward. They charge users based on the assets they manage on your behalf. Their annual fee schedule is as follows:
- Accounts with a balance of less than $5,000:
- $1 per month for taxable accounts.
- $2 per month for IRAs.
- 0.40% if you don’t use a financial advisor.
- If you use a financial advisor:
- 0.80% on the first $2,500,000 managed.
- 0.65% on the next $2,500,000 managed.
- 0.50% on the next $5,000,000 managed.
- 0.35% on balances over $10,000,000.
Farther Finance features
Farther Finance offers several features to help you manage your finances.
Family view dashboard
After signing up and consulting with an advisor, Farther Finance builds you a family view dashboard that lets you view your entire financial picture in one place. You have to link your accounts to fund the cash sweeps and view them on the dashboard, but this makes it much easier to manage your money.
Dedicated financial advisor
Having a dedicated financial advisor is a feature that sets Farther Finance apart from robo-advisors and hybrids. Many other hybrid financial and robo-advisor services give you access to a team of advisor professionals. While a team can still help, they won’t know the details of your situation as intimately as a dedicated advisor would.
You meet with your dedicated advisor at least quarterly with Farther Finance. Having a dedicated person to meet with helps you avoid re-explaining things and answering the same questions repeatedly for a new advisor on a new call.
What’s especially helpful, is that all financial advisors at Farther Finance are fiduciaries, meaning they’re legally required to make the best investing decisions for you.
Cash sweeps and goal accounts
Cash sweeps can be set up to automatically move excess cash to where it needs to be in your financial plan. This makes sure your money continues to work for you while minimizing taxes and maximizing returns at the same time.
The system also allocates money to your goals based on each goal’s timeline and importance. You can set up as many goal accounts as you need to make sure you’re properly investing or saving money to reach your short and long-term goals. As your goals get closer, investments shift to more conservative options to avoid large losses shortly before reaching your expected goal’s finish line.
Farther Finance’s daily rebalancing helps you make sure your portfolio is always correctly allocated. This sells positions that have increased in value to purchase positions that have decreased in value. Effectively, this allows you to buy low and sell high whenever rebalancing is necessary.
The company is always looking to optimize your taxes to help you keep more of your hard-earned money. They carefully consider where your money best fits to reduce taxes and maximize your returns. Strategies used include asset allocation, tax-loss harvesting, and investing in tax-efficient ETFs.
My experience researching Farther Finance
The only way to get the full experience with Farther Finance is to sign up and pay for their services, which I did not do. The company does give you an option for a tour in exchange for your email address which I found very helpful. It gave me a feel for how the technology side of the company works. Here’s what I saw.
Here’s an example of how their dashboard works.
You can also view all of your account balances in one place.
Clicking into account details shows you a historical view of that account and goals for the account.
These tools make managing your money easier since they keep everything in one place. None of the tools are groundbreaking, though. While it’s a nice addition to financial advisory services, you could likely find similar suitable tools elsewhere for free or at a low cost.
The real benefit comes from the personalized advice from their human financial advisors. Quarterly calls are a great benefit to help keep you on track and check-in to see if your plan needs to be updated.
Who is Farther Finance best for?
People who want a human advisor
Farther Finance is best for people who want a dedicated financial advisor to reach out to for questions. Having an actual person to speak with works for many folks, and can help you clearly explain your goals.
People who want lower fees
The best part is, Farther Finance charges a lower fee (starting at 0.80%) compared to traditional financial advisors (usually about 1%). Farther Finance also adds technology benefits traditional financial advisors typically don’t offer.
People who want more than a robo-advisor offers
Farther Finance should be considered an upgrade over robo-advisor options. It’s a great option if you need more help than only technology can offer, but that extra help comes with a higher cost.
Who shouldn’t use Farther Finance?
People who are cost-conscious
Farther Finance isn’t a good fit for everyone. If you’re getting started on your investing journey, robo-advisors can help you get started for a much lower cost. While Farther Finance’s fees aren’t outrageous, every WealthyUpdates Reader counts when you’re trying to first build your portfolio.
People comfortable managing their finances themselves
People that have a good handle on their finances and don’t care for the individual advisor’s attention may not want to use Farther Finance, either. Due to their lower fees, robo-advisors or self-managed investment options may still prove to be a better option for you even if you’ve grown a large balance.