United Income Review 2020 – Robo-Advisor Focused on Retirement

United Income Review - Robo-Advisor investment manager for retirees

United Income Expert Review

By, Kevin Mercadante

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.

Their portfolios also make heavy use of 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.

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 make heavy use of 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. An example of this is their “retirement paycheck”, making it easier for retirees to budget their money, just as they did when they were receiving a regular paycheck.

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

OverviewAutomated investment management robo-advisor platform with financial advisors, designed for retirees.
Minimum Investment AmountPremium, $10,000; Private Wealth, $300,000
Fee StructurePremium 0.50% AUM; Private Wealth 0.45%-0.80% AUM.
Top FeaturesPlatform 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 ServicesInitial consultations, via phone or email, are free.
Contact & Investing AdvicePhone and email, for customer service and investment advice
Investment FundsDiversified, low-cost index funds from US and global stock and bond markets. Individual stocks and bonds.
Accounts AvailableIndividual and joint taxable accounts; traditional and Roth IRAs; Trusts
PromotionsNone

What Differentiates United Income Robo-Advisor From Competitors

One of the biggest differences between United Income and other robo-advisors is that they design investment portfolios to outperform the underlying benchmark. This is unlike other robo-advisors, who generally seek only to match benchmarks.

Bonus; 4 Best Robo-advisors for Retirees

The most obvious difference however is that United Income was created with retirees in mind. They offer financial advisors and a number of retirement specific services including:

  • Social Security advice
  • Medicare advice
  • Supplemental health insurance guidance
  • Managing required minimum distributions
  • Refinancing and downsizing recommendations

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. 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 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.

United Income Fees and Services

United Income Review fees and services comparison

United Income offers two service levels:

  • Premium
  • Private Wealth

Each provides very different service levels, investor requirements, and has its own unique fee structure:

United Income Premium (Formerly Self Service)

This service level requires a minimum investment of $10,000, and has an annual account management fee of 0.50%.

This service provides personalized investment management, technical support, and a tailored financial plan. Premium clients will also benefit from advice about Medicare, Social Security, and portfolio allocation.

Additionally, Premium clients will have phone meetings with personal Wealth Managers annually. This annual check-in used to be available only to Private Wealth (what was then the “Full Service” level) clients prior to Capital One’s acquisition.

United Income Private Wealth (formerly Full Service)

The Private Wealth service includes all the services at the Premium level. It also includes unlimited meetings with Wealth Managers and customized investment services, such as socially responsible investments.

List of Low Fee Robo-Advisors

Because United Income is dedicated to serving retirees, Private Wealth clients have access to many services that will help with this specific part of life. These offerings include personal retirement transition coaching, estate and insurance planning, charitable giving optimization, and Roth conversion recommendations.

The Private Wealth pricing schedule is as follows:

  • First $500,000, 0.80%
  • Next $1 million, 0.75%
  • Next $2 million, 0.65%
  • The next $6.5 million, 0.55%
  • Over $10 million, 0.45%

According to the ADV filing, available on the website, under certain circumstances, the fees may be negotiable.

United Income Review

United Income Retirement Services

United Income is first and foremost designed to benefit retirees. They offer the following retirement services:

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.

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.

Legacy and Gift Planning. United Income creates plans to help you maximize the financial impact of your gift giving.

Social Security. 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

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, with is based upon research by Nobel Laureate Eugene Fama and Kenneth French which demonstrated the outperformance of certain factors such as value, quality, momentum and low-volatility investments.

The 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.

“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

United Income Robo-Advisor Sign-up Process

Potential clients will need to reach out to United Income directly in order 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?

United Income Robo-Advisor Pros and Cons

United Income Robo-Advisor 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.
  • Both Premium and Private Wealth clients have access to a Wealth Manager and a team of specialists helping with many areas of retirement. Premium clients have one annual phone meeting with their Wealth Manager, while Private Wealth clients have unlimited meetings.
  • The platform offers a holistic approach to retirement finances, which is unique among robo-advisors.

United Income Robo-Advisor Cons

  • The fee structure of 0.50% on the Premium service is in the middle of the robo-advisor range, with many high-profile robo-advisors charging much less. Popular competitors Betterment and Wealthfront charge just 0.25%. The fee of up to 0.80% on the Private Wealth service is high enough to bump up close 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 in order to receive in depth information about the services, potential and current 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 both the Premium and Private Wealth services are higher than many robo-advisors yet 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.

If you’d like additional information, or if you’d like to sign up for the service, visit the United Income website.

Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry. He lives in New Hampshire and can be followed on Twitter at @OutOfYourRut.

Updated: October 9, 2019

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