FutureMoney Review: Pros and Cons

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Source: The College Investor

FutureMoney is a new fintech company that helps parents get their children started saving and investing at an early age.

As we all know, the sooner you start investing, the more money you will have. Just look at Warren Buffet as an example. He started investing at age 11. After the age of 90, he earned over 90% of his wealth thanks to compound interest.

When kids start early, they can get a head start on building Nest egg for retirement. That is the goal of FutureMoney. This review is about its platform. We'll tell you how it works and whether it's worth starting investing.

• The main product is a Junior Roth IRA, which allows you to save in a tax-deferred 529 and eventually convert it to a Roth IRA.
• Pay $0 to $4 per month or a 0.25% annual management fee

What is FutureMoney?

FutureMoney is a tax-advantaged investment platform designed to help families build wealth across generations. The aim is to introduce children to investing at a young age so that they can benefit from compound interest in retirement and build up a sizeable nest egg.

Caption of the FutureMoney homepage. Source: The College Investor

Founded in January 2023 by financial industry veterans, the Boston-based fintech aims to reassure parents by giving them a tool to help their children work toward financial security. The platform offers managed portfolios and automated deposits to make wealth creation a regular habit.

What does it offer?

FutureMoney is a new fintech company that offers parents an easy way to help their children invest their savings. Parents can do this by setting up recurring deposits and letting their children invest the funds.

Junior Roth IRA

The Junior Roth IRA is the primary investment vehicle that FutureMoney offers. It is not a true Roth IRA. Instead, it uses a 529 plan that can be converted to a Roth IRA after 15 years.

Parents and children can donate up to $35,000 per child per year. These funds grow tax-free and can form the basis for future retirement savings.

According to one of FutureMoney's founders, investing $10 a week for 18 years and then allowing the funds to grow over 50 years could result in a $1 million nest egg by the time one child retires, if one based on historical market returns.

The platform offers fully managed portfolios. You can choose a portfolio based on your financial goals or important issues such as climate change or poverty alleviation.

Are there any fees?

All accounts are free to open and are billed for a monthly or annual subscription after a 30-day trial. FutureMoney offers a tiered subscription fee based on a family's income and account size.

For accounts valued at $20,000 or less, FutureMoney charges a flat fee. This fee varies depending on a family's annual income:

Subscription fees cover the ability to open unlimited accounts, make contributions, transfer funds, contact customer support and seek tax optimization. The fee is billed annually and ranges from $0 to $48 per year.

Accounts that pay the monthly subscription do not pay an administration fee.

Accounts of $20,000 or more incur a 0.25% annual management fee. Because these accounts incur the management fee, they will not be charged the monthly subscription fee.

How does FutureMoney compare?

It is important to note this FutureMoney is not a self-managed online broker. Account holders can invest in fully managed portfolios, but do not have the ability to purchase or purchase individual stocks Exchange Traded Funds (ETFs).

Robinhood is an online broker that offers a wide range of investments at low costs. You can trade individual stocks and ETFs commission-free. Unfortunately, it doesn't offer a 529 plan account option, only taxable brokerage accounts and IRAs (traditional and Roth).

SoFi Invest is similar to Robinhood in that it offers a completely self-directed investment opportunity with commission-free stock trades. It also supports Fractional shares. Although it also offers managed investments like FutureMoney, it does not support 529 plans.

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	$0 to $4 per month or 0.25% annual fee	$0 ETF and stock trading $6.99/month for Robinhood Gold
	Tax-advantaged investing for children	Low cost trades and portfolio management	Vocational training and education for students
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How do I open an account?

To open an account, download the app. You will be asked some questions about your financial goals and to verify your identity. Accounts can be funded with as little as $1 and take just a few minutes to open.

Is it safe and secure?

FutureMoney is committed to strong security to protect users' assets and information. However, it works with a number of third parties, which can increase the vulnerabilities that users are exposed to.

Brokerage services are provided in collaboration with Atomic Brokerage. Atomic Brokerage supports the John Hancock Freedom 529 plan, administered by T. Rowe Price. While Atomic Brokerage is insured by SIPC, investments are not FDIC insured.

FutureMoney's platform is managed in collaboration with AtomicVest. AtomicVest collects and shares personal information with other parties.

How do I contact FutureMoney?

The best way to contact FutureMoney is by email at support@futuremoney.com.

Customer service

FutureMoney has 4.7 stars on Google Play and 4.7 stars on the App Store. The app is too new to comment on customer service, but reviews so far report a positive user experience and the app is easy to use.

Is it worth it?

FutureMoney helps parents develop a saving habit in their children. Using a 529 plan – rather than a traditional custodial IRA – is a novel approach to saving for retirement over a long period of time. The account management fees are on par with similar investment platforms and the tiered subscription model makes FutureMoney also accessible to low-income families.

Check out FutureMoney here >>

FutureMoney features

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