Farther Review: Invest to Beat Inflation, Enjoy Personalized Attention

Traditionally, family office wealth management services were reserved for the ultra wealthy—aka those with more than $100 million in investable assets.

We know that’s a pretty big stack of pennies, but not everybody wants to be relegated to the impersonal world of app-based robo-advisors.

Enter Farther, a digital family office model that provides you with a team of experienced financial advisors who use technology to help grow and protect your wealth. With a $0 minimum investment, Farther customers could see 8% to 12% possible returns from investments like ETFs, mutual funds, and securities like stocks and bonds. 

And, according to its website, Farther also dabbles in alternative investments like private equity, private real estate, hedge fund, and crypto offerings—making this platform intriguing enough to catch our eye. 

In this detailed Farther review, we’ll cover everything you need to know about Farther Finance, including the economics behind it, the fees, potential returns, pros and cons, and more.

Farther is a digital family office that aims to bring the old-school perks of having a financial advisor watching over your money—but with modern day technology. 

Unlike robo-advisors, which cater to the same demographic of investors who aren’t exactly at millionaire status yet, Farther provides you with personal investment advice so that you can plan out realistic goals with your money. 

The founders, Taylor Matthews and Brad Genser, are MIT alumni who had prestigious backgrounds in finance prior to founding Farther. Taylor Matthews, who worked as a consultant and an investment banker, had a leadership position with the fintech company ForUsAll. Meanwhile, Brad Genser is a military veteran who worked at Goldman Sachs, where he was a VP for their private wealth management team.

How does Farther work? 

Farther uses a hybrid of leveraging technology and traditional wealth management services to help customers reach personalized financial goals. 

Here’s how the process works:

Step One: Farther collects details about your financial situation and goals

Everybody has different financial needs and wishes. Farther creates a customized profile and dashboard for every customer, then asks basic information like your KYC (know-your-customer) information and account details. You’ll then share your goals, which helps the Farther team assess your time horizon and risk tolerance, and finally you’ll get matched with a dedicated financial advisor. Consider this advisor your personal money buddy—who will be accessible via email, chat, or video call.

Step Two: You (and your team) let the algorithm do its thing

So, technically Farther isn’t a hands-off robo-advisor, but the company does utilize smart technology to eliminate human error and invest your money efficiently. After all, there are times when a robot, through automation, can compound faster and reach higher gains than us mere mortals.

Your money will be allocated to model portfolios with different goals such as saving for retirement, large purchases, emergencies or general long-term savings. The company uses a technology that will allow for you to automate these savings and investments directly from your bank. And with its cascade, or “cash waterfall,” feature, new or overflow money will sweep across account types to fully utilize tax-advantaged accounts according to your preferences. Moreover, Farther provides competitive practices of automatic dividend reinvestment and rebalancing. 

What if you change your mind? You are free to adjust your target asset allocations and investment strategies periodically—and you don’t have to make your decision alone. When opting to withdraw some of your money, Farther will initiate a combination of security sales while ensuring the corresponding target asset allocation remains intact. You also have the added benefit of getting direct access to qualified investment individuals with years of experience guiding clients through bear and bull markets—and they’ll be able to talk you down off the ledge.

Farther features

Now that you know how Farther works, let’s look at some of its features.

1. Online investor portal with a mobile app

There’s nothing stuffy about this family office. Unlike many independent wealth managers, Farther allows their clients to access an online investor portal at any time to access investment advice, make one-time or recurring deposits, and withdraw cash. Your investor portal is accessible via desktop browser or a mobile app on both iOS or Android.

2. No minimum account sizes

Most dedicated investment management platforms and family offices require minimum account sizes of millions. Farther Finance has no account minimum—making it accessible to anyone. That said, robo-advisors have lower fees that are better for investing newbies. Farther’s ideal customer is someone who has outgrown robo-advisors, but still wants an accessible option with higher client touchpoints. 

3. Qualified advisor team

Due to a combination of Father's low investment minimums and technology automation, anyone can access the added benefit of working with a team of go-to financial advisors.

4. One-of-a-kind cash waterfalls

Ever had lots of goals and wish you could fund them all at once? With Farther, you don’t need to chase waterfalls—they flow for you and deliver money while they are at it.

Farther streamlines your savings with automation via its proprietary cascade “cash waterfall” feature. Based on your priorities and timelines, the waterfall tool allocates where to invest new or surplus money on those heavy-inflow months. That way, you can minimize idle cash and maximize returns.

And yes—tax optimization is built into the feature too. With the help of your advisor, you’ll configure the algorithm to whatever you want, then the technology ensures execution. Can you say win-win?

Who can invest with Farther?

There are no investment minimums to start with Farther, but the platform appeals most to people with medium-to-high net worths. We suggest this app for investors with a substantial amount to invest, just because Farther isn’t the cheapest tool on the block (although it’s certainly not the most expensive, either).

Here’s who we think would really benefit from Farther:

• Investors with a substantial amount of money to invest who’ve outgrown robo-advisors but don’t yet meet the wealth requirements to work with a traditional family office 
• Investors looking to add structure to their savings and diversify their investment portfolio automatically—without having to waste brain power thinking
• Professionals who are in the asset accumulation phase of their lives
• People facing big life moments, and therefore slightly more complex financial planning needs (aka getting married and having children)
• Those who need help with managing equity compensation
• Anyone looking for help managing their finances on autopilot to faster reach their long-term and short-term financial goals
• People with multiple goals to sort out and prioritize—that’s where the waterfall feature comes in super handy

Strong founding team

While Farther seems to be geared towards the aspirational wealth builder, you probably want some aspects of the richy rich when it comes to protecting and managing your wealth. Farther has the perfect combination of people who have had “elite” backgrounds, who are also willing to embrace new technology, as seen by them having options for crypto investments on their platform.

Personalized investment advice

We all know how important our individuality is, and probably this is most important when it comes to our finances. Every single person is different in how they choose to earn, spend, and save their money. This is why having a personal wealth manager is so important. As Farther says on its website, “We’re designed to be flexible to accommodate any goal-based accounts you want to set up."

High-tech solutions

While having a financial advisor is nice, this means very little unless they’ve got tech that can provide you the results that you’re looking for. Father has some pioneering tech, like the cash waterfall tool, which optimizes your savings for greater abundance by ensuring your money is in the most strategically placed accounts.

Low principal amount

Typically to utilize the services of a wealth manager, you need to have a net worth that is in the millions. With Farther you can experience the benefits of a wealth advisor at a much lower net worth.

Lack of history

A problem that Farther has is a lack of history. Founded in 2019, the company don’t have a historical reference as to how competitive the wealth management service is. What compounds this confusion is that 2020 and 2021 were far from “normal” years when it came to investing. For all intents and purposes, Farther has only existed during the COVID economy, which makes it tough to create a realistic guess on how it would perform in the economy prior to COVID. 

That said, the financial advisor team collectively has years of experience informing their guidance.

Higher investment fees than most robo-advisors

When compared to robo-advisors, Father has a higher fee than the competitors in the market. The fees that robo-advisors usually charge are around 0.25% of AUM. The average that professional wealth management firms charge is around 1%. This puts Farther at close to the price range of a traditional wealth management firm.

Could you do it yourself?

A question you have to ask yourself is if you are someone who really needs the benefits of a wealth advisor. If you are using Farther, it is because your net worth is below $1 million. You should consider whether paying higher fees is really the best way to get you to $1 million faster.

You can definitely make money on Farther, just as you would with a robo-advisor or wealth management team. However, the same market risks apply, and you have to be clear on the fees and what your ideal time horizon will be. The ideal Farther customer is someone who knows what they want, and is willing to trust an advisor to “set it and forget it.” Farther’s algorithmic tools need time to work in your favor, just as with any long-term investing strategy, so the biggest question isn’t whether you will make money, but do you feel clear enough on your goals to hand over your money management to a hybrid human/robot team?

How do I make money with Farther? 

You make money through Farther by working with some members of their private wealth management team who help you set up a personal investment strategy using Farther’s technological offerings. With a human and vetted investment professional you will be able to talk out your ideas with someone who will understand your personal needs and goals.

One interesting example of Farther’s technology is the “cash waterfall.” The cash waterfall program aims to help you fight idle cash that you have saved, that due to inflation is actually going down by just sitting there. The idea of the cash waterfall program is that instead of having your money be idle, all money that is deposited into your Farther account will go into tax-friendly savings accounts such as a 401(k) or 529 college savings plan.

In summary, Farther does as it says: It deploys humans to think smart and help you set up your goals, then it leverages its technology to help you actually cross that line.

How do I cash out with Farther? 

You cash out of the Farther platform the same way you would cash out of any robo-advisor/wealth management service. You just ask, and the cash is transferred to your bank.

That said, the way in which Farther is set up is such that you are supposed to hold and build your wealth through the platform. Thus, if you are investing with Farther you probably are looking at decades-long partnership.

Farther vs traditional investing 

The big question that you have to ask yourself with Farther is if you would benefit from utilizing their services. The S&P has had an annualized average return of around 10% to 11%. For the past two years, Farther has been in this bucket, leveraging a better return on investments than Farther’s competitors Wealthfront and Betterment. However, both Wealthfront and Betterment have lower fees.

Remember, Farther hit the market right at a time when the economy went bananas. Some predict that a recession is in the works, and if so retail investors may benefit from having a smart wealth advisor leading them through a potentially risky economy. But you could also argue the opposite is true, and say that the little guys should opt for lower-cost options, even if they have a lower ROI.

For Farther to be competitive for you, it needs to return more than 11.3%: the first 10.5% is from the S&P estimated earnings, and add another 0.8% to cover Farther's annual management fees. 

That means that any ROI over about 11.3% would make Farther more competitive than lower-cost robo-advisors.

One of the big negatives with Farther is that it hasn’t been on the market long enough for consumers to give a lot of feedback. This is especially relevant since the core value add for Farther is that it provides the qualitatively measured value of a financial advisor. As the company is still at its starting stage and there isn’t that much feedback on how the wealth management advisors are, the consumer takes the risk on their own.

Farther provides a mix of the old and the new. Founded by two finance vets with prestigious backgrounds, Farther aims to bring the benefits of wealth advisors to the general population. The big risk is that it is still a new firm without a history of high returns. However, as it uses high tech solutions to make sure that your money is going to work for you, and couples that with top tier wealth management professionals helping you plan out your financial goals, Farther can in fact help stretch your money further.