Farther Finance Review 2021: Pros, Cons, & Is It Right For You?

Bobby Hall

Farther Finance is a wealth management platform that offers personalized financial services and investment advice across various investments, such as ETFs, mutual funds, stocks, and bonds.

This platform combines a team of experienced financial advisors with modern technology and data-science-driven insights to help you grow and protect your wealth. It sets out to help you build a solution to manage every aspect of your financial goals while keeping you on track to achieve them.

Overall rating

4.7

Summary: If you’re looking for a financial planner that leverages technology to manage and grow your wealth, Farther will help you build a solution to manage every aspect of your financial goals while keeping you on track to achieve them.

Farther Finance

farther finance logo

0.8%

Fees

$100,000

Account Minimum


Reviews

5

Account opening

4

Commission & Fees

5

Deposits & Withdrawals

5

Services Offered

5

Portfolio Construction

5

Portfolio Management

5

Customer Service

4

Education

5

Safe & Secure

Pros

  • Low costs
  • Automatic rebalancing
  • Joint account and family view
  • Dividend reinvestment

Cons

  • No automatic tax-loss harvesting
  • Short track record
  • Not available for investors outside the U.S.

Best For

  • Dedicated expert financial advisors
  • Customized portfolios
  • Advanced goal-setting tools

Features

HQFour World Trade Center
150 Greenwich Street, Suite 2946
New York, NY 10007
Minimum Investment$100,000
Annual Fees0.8% of assets under management
Setup FeeNone
Cancellation FeeNone
Investment Expense RatioNone
Accounts– Individual or joint brokerage
– Roth IRA
– Traditional IRA
– SEP IRA,
– Trusts,
– Custom accounts (emergency fund, long-term savings fund, goal accounts, and long term purchase fund)
AccessWeb app, Mobile app (iOS and Android)
Portfolio RebalancingAutomatic rebalancing available
Tax Loss HarvestingN/A
AdvisorAccess to a human advisor available at no additional cost

In depth review on Farther

Founded in 2019, Farther Finance is the first digital family office. Its modern infrastructure allows clients to save, invest, and bring their financial life together in one place. That includes the ability to connect all your accounts, like your 401(k) or a standard checking account, to see everything in one place and get an overview of your entire financial health.

It starts by collecting details about your financial situation and goals. Based on this, it matches you with a dedicated financial advisor who will proactively monitor your account. Farther’s proprietary algorithm will allocate your money to customized portfolios with different goals, such as saving for retirement, large purchases, emergencies, or general long-term savings.

This platform allows you to set up any number of goal-based accounts to build a tailored savings plan. It automatically adjusts your investment portfolio as the time horizon of your objectives changes. You can also set up an automated cash sweep to maintain a minimum target balance in your bank account.

You are free to adjust your target asset allocation and investment strategies for your current portfolio. When opting to withdraw some of the money from your portfolio, Farther will initiate a combination of security sales while ensuring the corresponding target asset allocation remains intact.

Farther is best for

  • Dedicated advisors: Farther combines both Robo and human advisors. It uses technology to automate several wealth management processes and dedicated human advisors to provide solutions and advice. Farther advisors help clients implement a savings structure that incorporates ongoing automated cash management into a plan designed to achieve personal goals. Goals may include building an emergency fund, buying a house, and saving for retirement, all while reducing taxes. They also address questions and needs across investments, cash, estate planning, charitable giving, and taxes. 
  • Customized portfolios: This platform offers portfolios tailored to each client to reflect priorities, return on investment, and values, such as not investing in certain companies that are not environmentally friendly. Each portfolio matches the clients’ risk tolerance and timeline. For clients with larger portfolios, this includes access to and advice on alternative investments.
  • Advanced goal-setting tools: Farther allows clients to set several financial goals and open accounts for each. It then uses its waterfall system to ensure that each dollar saved is automatically directed towards the right account in a way that lowers taxes and accelerates progress. 

Farther benefits

  • Low costs: This platform offers transparent and low-cost fees compared to commissions charged by other financial advisors.
  • Automatic rebalancing: Maintaining the right mix of stocks, bonds, and other securities in your investment portfolios is important. Farther monitors your portfolio to maintain your target allocation and proactively rebalances your investments. Typically done whenever your portfolio reaches a 20% or higher deviation from your target allocation, Farther will automatically rebalance it.
  • Joint account and family view: Farther provides a joint account for you and your spouse or partner, with the ability to add dependent as your family grows. It also allows you to manage all your family finances from one place.
  • Dividend reinvestment: When you receive dividends, Farther automatically reinvests them. They buy more ETF for any portfolio that has drifted farthest below its target allocation, which will positively affect it.

Farther drawbacks 

  • No automatic tax-loss harvesting: Farther advisors will help build a portfolio that reduces tax liability. However, the platform does not provide automatic tax-loss harvesting at this time.
  • Short track record: This company has only been in operation since 2019, therefore, has limited data on their historical performance.
  • Not available for investors outside the U.S: It is only available to US citizens, green card holders, and US Visa holders with a social security number.

Factors that contributed to the overall rating

Account opening

5

You can sign up and set up your profile and preferences in a few minutes. 

  • Download the mobile app or go to the website and click “Get Started .”
  • Provide some basic information about yourself to set up your profile and choose whether you’d like to work with a dedicated advisor.
  • Pick a funding source to link to Farther and begin saving.

Commissions and fees 

4

To provide high-quality financial advice, a dedicated financial advisor, holistic financial planning, and technology to make personal finance work, Farther charges a % fee of your account balance annually, assessed every month as follow:

FeeDeposit Amount
0.8%The first $2.5M
0.65%Next $2.5M
0.50%Next $5M
0.35% Over $10M

If your account balance is $5mln, your first $2.5M is 0.8%, and the next $2.5M is 0.65%, so your effective fee rate is 0.73%.

Deposit and withdrawals

5

There are 3 ways to deposit money to your account:

  • Optimized savings: You set a minimum amount to keep in your checking or savings account, and Farther will sweep in excess cash whenever it is available.
  • Recurring deposit: You set a specific amount to be transferred to your account consistently. For example $1,000 / month.
  • One-time investment: You specify any amount to be transferred to Farther on a one-off basis.

Also, you can transfer funds from other brokerage accounts, IRAs, old 401(k)s, or other employer-sponsored retirement plans at any time.

You can withdraw your funds at any time from your mobile app or web app. Once you’ve logged in, navigate to settings in the top left corner. From there, select “Withdrawals,” pick the account you’d like to withdraw from, select an amount, and click submit.

It can take up to five business days from when they are requested to the time you see funds arrive in your bank account.

Services offered 

5

The platform offers the following services:

Retirement planningWhether you are approaching retirement or want to start planning for it, Farther advisors will help figure out the best way to go about this. They will help you understand your budget and how to make the most of it to ensure you enjoy your retirement when the time comes.
Asset ManagementFarther advisors take the responsibility to ensure that your money lasts through fluctuations and withdrawals, if any. They will devise plans that consider your particular circumstances and provide the best course of action concerning asset management.
Education planningFarther advisors will help you decide how to incorporate education into your savings goals and help you set up an account to contribute towards your child’s 529.
Life planningSetting up and maintaining the right types of savings and investment accounts is critical to accomplishing your near and long-term goals. Farther allows you to plan for all life events, including setting up an emergency fund, saving for a vacation, buying a house, etc.
Tax planningThe advisors guide you towards employing tax-reducing strategies. The savings waterfall feature allows you to distribute money across all your accounts. It is automatically designed to reduce your taxes and stretch the value of every dollar saved.
Insurance planningLife comes with all sorts of risks that are best managed with a plan and downside protection. Farther advisors will help you develop an insurance plan that protects your income, safeguards your assets, and secures your person.
Estate planningFarther advisors will evaluate your accounts to ensure that they are properly set up for the least amount of hassle or cost to your beneficiaries. They will help you plan for asset transfers, have your last will, advance health care directive, and power of attorney drawn up.
Legacy PlanningIt helps you establish charitable giving strategies, set up a donor-advised fund (DAF), check your employer match, and review your chosen organizations and causes.
Retirement incomeAs you approach retirement, your spending habits shift from saving to spending. This platform’s advisors will help you plan your income to allow you to keep the lifestyle you have built for yourself.

Portfolio construction

5

Farther financial advisors help you build a savings structure with a purpose. That means they’ll help you open the right accounts and connect them together to both lower your taxes and accomplish your goals. Once the structure is in place, they will help you build investment portfolios that match your unique risk profile and time horizon for every goal that you’re saving for. You’re not limited to any set of default portfolios either. Farther advisors work with you to define a custom plan for your accounts that fits your goals, values, and the specific risk/return profile needed for each.

Portfolio management

5

Once your portfolio is set up, Farther will manage it by ensuring diversification within and across asset classes to maximize returns. This is done in tax-advantaged accounts when possible and with low-cost, tax-efficient EFTs at the core of most of its strategies. Farther utilizes its proprietary algorithm to quickly and easily reinvest your earned dividends, creating compounded returns. For clients with larger balances, Farther also helps to incorporate alternative assets like private equity into your portfolio as well.

Customer service

5

If you have any questions along the way, reach out to us via chat, phone at 855.71GOFAR (855.714.6327), email at [email protected], or schedule time with an advisor.

Education 

4

The platform provides various resources, including its Personal Finance 101 and FAQs, tools within the app, blog and newsletter, to educate clients on financial matters.

Safe and secure

5

Your accounts benefit from Securities Investor Protection Corp (SIPC) insurance carried by Farther’s custodian bank, Apex Clearing Corporation. SIPC insurance covers up to $500,000 worth of securities for each type of account held at Farther and up to $250,000 in cash. Also, Apex has acquired excess SIPC insurance to provide an additional $150M in coverage for all its clients.

Farther has bank-level 256-bit SSL/TLS encryption on all information transmitted between your browser and its web servers to keep any data you exchange private. Data is stored on SOC-2 compliant AWS servers and is backed up in the cloud to protect against possible data loss. It does not store any of your external account authentication data, so it cannot compromise security to any of your external accounts.

Farther’s team is committed to following industry best practices to protect your data and continuously upgrades its policies and procedures to ensure the highest security level.

Is Farther right for you?

Farther is an excellent choice for anyone looking for wealth management services. Its low minimum investment requirement, expert financial advice, and affordable pricing make Farther Finance a viable option for most investors who are outgrowing do-it-yourself solutions or robo advisors.