United Income Expert Review
United Income is a Washington, DC, based investment advisory that launched in September 2017. The founder, Matthew Fellowes, also founded HelloWallet and was the Chief Innovation Officer of Morningstar Financial.
United Income was designed for retirees and those approaching retirement, age 50 to 70, based on the realization that people are living longer and investing must accommodate that reality. On July 31, 2019, United Income was acquired by Capital One.
The impressive United Income team includes members from Ivy league universities, Fortune 500 companies, the White House, the Center for Medicare, and the Social Security Administration.
United Income, the Capital One robo-advisor, prides itself on its Efficient Investing approach, which relies on a combination of technology, new data, and human wealth managers to create personalized client financial plans. The result is an investment strategy as unique as the client.
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United Income makes use of evidence-based investing and factor-based investment strategies, targeting securities with traits that have historically enjoyed higher returns, lower risk or a combination of both. Factors include quality, value, momentum, size and low volatility.
Their portfolios also adhere to broad global diversification of both stocks and bonds. Research has indicated that such a portfolio outperforms a U.S.-only portfolio, and does so with less volatility.
What’s more, United Income moves beyond investments, providing various services specifically tailored for retirement. Some of these features include Social Security and Medicare advice and a more hands-on investment management style than can be expected from most robo-advisors.
This United Income review will delve into the fees, features, benefits, and limitations of this robo-advisor, so that you can make your best investment decision.
United Income Robo-advisor Features at a Glance
|Overview||Automated investment management robo-advisor platform with financial advisors, designed for retirees.|
|Minimum Investment Amount||Retirement Consulting, $2,500; Legacy Program, $100,000; Traditional Wrap Fee Program, $250,000; United Income Wrap Fee Program, $300,000. All minimums are noted as negotiable.|
|Fee Structure||Retirement Consulting, 0.05%-1.25%; Legacy Program, up to 1.25%; Traditional and United Income Wrap Fee Programs, 0.59%-0.99%..|
|Top Features||Platform is designed specifically for those aged 50+, and includes numerous related services; also attempts to outperform the market, not just match it. United Income paycheck distributes a monthly check to you (from your account).|
|Free Services||Initial consultations, via phone or email, are free.|
|Contact & Investing Advice||Phone and email, for customer service and investment advice|
|Investment Funds||Diversified, low-cost index funds from US and global stock and bond markets. Individual stocks and bonds.|
|Accounts Available||Individual and joint taxable accounts; traditional and Roth IRAs; Trusts|
What Differentiates United Income Robo-Advisor From Competitors
One of the biggest differences between United Income and other robo-advisors is that United Income designs investment portfolios to outperform the underlying benchmark. This is unlike other robo-advisors, who generally seek only to match benchmarks.
The most obvious difference, however, is that United Income was created with retirees in mind. They offer financial advisors and several retirement specific services, including:
- Social Security advice
- Medicare advice
- Supplemental health insurance guidance
- Managing required minimum distributions
- Refinancing and downsizing recommendations
In this way, United Income stands out as the only robo-advisor with a focus on how to turn wealth into an income stream in retirement.
Who Benefits from the United Income Robo-Advisor?
United Income primarily benefits retirees and those close to retirement. It takes into consideration the specific needs of retirees. That includes not just investment management, but also budgeting for the unique needs of the retirement years and allocating investment accounts in such a way that the retiree won’t outlive his or her money.
The platform deals with the full range of retirement related topics, including Social Security, Medicare and health related issues, and downsizing analysis. Guidance with short and long-term spending is a unique feature of United Income.
United Income Robo-Advisor Features
Personalized Investment Portfolio and Management. United Income wants their clients to do well financially, and their personalized investment strategies demonstrate this. United Income looks at each client’s individual assets and needs, and works to create an individualized, unique portfolio for each client.
Tax-optimized investing. This includes tax-loss harvesting – a strategy in which underperforming assets are sold off to generate losses against winning positions. Following the sale, they immediately invest the proceeds in similar assets, maintaining the desired portfolio allocation.
They use other tax-advantaged strategies as well. For example, United Income seeks qualified tax treatment of dividends. They also invest primarily in exchange traded funds (ETFs), since they trade much less frequently, and therefore generate fewer capital gains.
Automatic Rebalancing. Your portfolios are rebalanced “opportunistically and strategically”. This is to make sure your portfolio remains in line with the designated investment strategy determined to be best for you. They also work to minimize any tax consequences that may result from rebalancing in taxable accounts.
Lowest Fee Robo-Advisors
|Robo Advisor||Management Fee||Investment Minimum||Sign up|
|0.25% of AUM||None||Sign up|
|0.25% of AUM ($5,000 managed for free)||$500||Sign up|
|0.25% of AUM ($10,000 managed for free)||$2,000||Sign up|
|Basic-None Premium-$30/month ($300 set up fee)||$5,000||Sign up|
United Income Fees and Services
United Income offers four service levels:
- Retirement Consulting
- Legacy Portfolio Management
- Traditional Wrap Fee Program
- United Income Wrap Fee Program
Each provides very different service levels, investor requirements, and has its own unique fee structure
Retirement Consulting (Corporate Sponsored Retirement Plan Consulting Services)
This service benefits clients who have existing retirement accounts through their employer. Though United Income notes that services may vary based on client needs, this program typically covers client education, investment selection, and investment performance monitoring.
The negotiable account minimum is $2,500, and fees range from 0.05% to 1.25% of all plan assets.
Although nice to have, the Blooom robo-advisor will manage your IRA, 401k, or other retirement plan for extremely low fees. Blooom efficiently chooses low fee funds, from your plan to meet your retirement goals.
Legacy Portfolio Management Program
This portfolio management program provides “discretionary and non-discretionary portfolio management” on at least a quarterly basis. The Legacy Program takes client risk tolerance, preferences, and investment objectives into consideration in this fairly individualized plan. This plan integrates former retirement accounts and adds additional services if needed.
The $100,000 minimum account size is negotiable, and fees can range up to 1.25%.
Bonus: List of Low Fee Robo-Advisors
Traditional and United Income Wrap Fee Programs
Both of United Income’s Wrap Fee Programs are managed on a discretionary basis. These programs provide account management, 24/7 account access, and monthly updates on financial progress. United Income Wrap Fee clients can also benefit from account managers who review accounts on a quarterly basis and in-person consultations.
Clients can expect a tailored financial plan which considers the potential for success and the possibility of early retirement, combined with investments that minimize taxes and maximize social security benefits.
The Traditional Wrap Fee Program has a minimum account size of $250,000, whereas the United Income Wrap Fee Program requires a minimum of $300,000. Like all other programs, these minimum account balances are negotiable.
The fee structure for both programs ranges from 0.59% to 0.99%, and is determined as follows:
- 0.99% for accounts under $1mil
- 0.89% for the next $1 mil
- 0.79% for the next $3 mil
- 0.69% for the next $5 mil
- 0.59% for accounts over $10 mil
United Income Retirement Services
United Income is first and foremost designed to benefit retirees. They offer the following retirement services:
Budgeting. United Income assesses spending needs for their clients, looking at health, chartable giving, discretionary
, and non-discretionary spending, as well as clients’ spending goals. Instead of making budgetary recommendations based on fixed percentages, United Income proposes a “personalized baseline spending amount.”
Financial Planning. United Income believes financial planning should continue beyond retirement. They use proprietary technology integrating the world economy, your finances, investment markets, government policies, tax codes and big data into a single decision-making platform.
The financial planning services go beyond most hybrid digital and human financial advisor platforms and include:
- Retirement transition coaching
- Insurance planning
- Medicare advice
- Estate planning
- Education savings planning
Account sequencing. This is a process that prioritizes spending money from certain accounts, while maintaining investments in others. Some accounts provide withdrawals for income, while others continue to grow for the future.
Legacy and Gift Planning. United Income creates plans to help you maximize the financial impact of your gift giving.
Social Security Guidance. Social Security advice comes standard in all United Income account types. They even have former Social Security officials on staff, to help you maximize your benefit.
Trusts. These provide control of your assets and discretion from the legal process at the end of your life. United Income can accommodate 26 different trust types.
United Income Paycheck. Your investment income can be distributed from your portfolio, just like a monthly paycheck. The amount is recalibrated over time, based on your account balances and spending needs. They even handle required minimum distributions for you, when you turn 70 ½.
United Income Investing
“We continuously update our investment methodology to make what United Income believes to be the best investment decisions for our clients. For instance, we are currently testing advanced models of risk analysis and empirical distributions to better inform our allocations.”
~United Income ADV
In contrast with many robo-advisors who implement a market-matching approach, United Income investments attempt to outperform the markets.
Their strategy is similar to a smart beta approach, which is based on research by Nobel Laureate Eugene Fama and Kenneth French. The smart beta approach outperformed the market in certain factors, such as value, quality, momentum, and low-volatility investments.
United Income portfolios are based upon the client’s age, risk tolerance, financial assets, and goals. The United Income Capital One investing approach includes inflation expectations and other client assets not managed by the firm. All additional income sources are considered in the United Income Investment Plan as well.
Each portfolio is personalized with a diversified mix of low-fee global ETFs. On occasion, the United Income investments will include individual stocks, bonds, or mutual funds. The portfolios are crafted across approximately 10 asset classes.
Underscoring United Income’s focus on retirees, the fund managers assess the client’s spending needs, health, charitable giving, and spending goals.
United Income Sign-up Process
Potential clients will need to reach out to United Income directly to join the robo-advisor. Individual clients can email or call United Income to get a free consultation and determine whether this robo-advisor can help them achieve their financial goals.
United Income now offers a separate contact for Advisors looking for partnership opportunities.
Find out: How do Robo-Advisors Work?
Pros and Cons
United Income Pros
- Services designed specifically with retirees in mind. This includes spending recommendations and specific benefits critical to retirees, such as maximizing Social Security benefits and estate planning.
- Tax-loss harvesting on all taxable accounts, regardless of account balance.
- United Income Wrap Fee Program clients have access to a Wealth Manager and a team of specialists helping with many areas of retirement.
- The platform offers a holistic approach to retirement finances, which is unique among robo-advisors.
- The breadth of services rivals most full service financial planning firms.
- Access to the Capital One products and services is a benefit as well.
United Income Cons
- The fee structure of 0.59%-0.99% on the Wrap Fee programs is in the upper range of robo-advisor fees, particularly when you consider the $10 million minimum to qualify for an account management fee of 0.59%. Many high-profile robo-advisors charge much less, including popular competitors Betterment and Wealthfront, which charge just 0.25%. The fee of up to 1.25% on the Legacy Program and Retirement Consulting services is high enough to bump the platform up to full-service investment management providers.
- The platform doesn’t disclose its investment allocations, or the specific investments that are held in your portfolio.
- The investment funds aren’t listed on the website.
- The website is limited and information about account types, minimums, and fees are available only in different white pages. In order to receive in-depth information about the services, potential investors must call.
United Income Robo-Advisor Review Wrap Up
United Income is best suited for retirees who are looking for comprehensive financial services. That includes not just investment management, but also help on the spending side, such as with budgeting and specific expenses, like healthcare.
The Capital One United Income robo-advisor is the closest platform to a full-service financial advisor, although Personal Capital is a close second.
The fees for all four services – Legacy, Retirement Consulting, and Traditional and United Income Wrap Fee Programs – are higher than many robo-advisors, although they remain lower than most human financial and wealth managers. As there are no identical competitors to the United Income robo-advisor for retirees, the fees must be evaluated in light of the extra support you’ll receive in retirement-specific areas of life. It’s like having a financial advisor who takes care of almost everything in your retirement life.
We like the concept of the United income Capital One robo-advisor but would like a bit more detail about investment strategies, specific funds and how returns match up with typical passive ETF investment strategies, favored by most robo-advisors. This service is probably a better match for wealthier individuals with complex financial planning needs.
If you’d like additional information, or if you’d like to sign up for the service, visit the United Income website.
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