The idea for FutureAdvisor dawned on co-founder Bo Lu a couple of years ago, while he and co-founder Jon Xu were still working for Microsoft.

"Jon and I were helping a couple of friends who were looking for high-quality financial advice, and found that a good financial advisor wanted a $500,000 minimum balance, while others wanted to sell them term life insurance or annuities. We wanted to be able to bring a high level of investment advice to everyone," says Lu, whose new firm, FutureAdvisor, uses some of the technology behind personal financial management tools to produce web-accessed investment advice.

Using Yodlee's account aggregation engine and internally developed analytics that leverage the investing principles used by financial analysts, FutureAdvisor provides individual investors with personalized financial advice. It recommends ways to reduce fees, maximize tax efficiency and choose investments. The service is free, though users have the option of signing up for fee-based help from personal advisors.

"We've incorporated the best practices of retail investing and portfolio theory into software that can be applied in a personalized scenario," Lu says.

The founding team includes financial industry veterans, software engineers from Microsoft and math PhDs. The firm is based in Seattle, and is funded by Sequoia Capital (SEQUX), Square COO Keith Rabois and Yelp founder Jeremy Stoppelman.

Users sign up for the service and answer a series of questions to produce a profile based on age, risk tolerance and current investment situation. That initial profile is then used to track movements in various funds or investment products that a person has in his or her portfolio, then runs that information through the firm's algorithms to find clues that the allocation may be out of balance with the profile, given the person's risk or life stage. It then gives the person a specific action that can bring the account back into balance. The moves include bringing allocations into line with retirement goals by moving assets into a certain type of fund, or reducing allocations in another fund.

The service claims advice independence by not charging commissions or selling specific insurance or annuities, and it does not collect a percent of assets similar to the one percent fee that most traditional financial advisors charge. FutureAdvisor also does not suggest load funds, which it says frees it from the impression that the firm is taking fees from these funds in exchange for recommendations.

Lu says the firm is able to make profits based solely on its premium services, including a "gold" plan that costs $49 per year. The gold plan includes 24/7 portfolio monitoring, rebalancing alerts and an annual scheduled call with an investment advisor. A $195-per year platinum option includes unlimited video calls with an investment advisor. Beyond the personal advice, most of the free services are the same as the premium service. Lu says a small percentage of consumers would use the premium services, though he didn't reveal the exact amount.

FutureAdvisor's competitors would include the discount brokerages, PFM firms, traditional financial planning firms and online portfolio management firms such as WealthFront, which offers a Precision Investing Platform that asks users 10 questions to assess the consumer's tolerance for risk and willingness to take on risk in the future. It then recommends an investment strategy to fit that profile. MarketRiders offers online software that uses algorithms to create a consumer's "ideal" asset allocation among a menu of six asset classes. And a number of banks, such as Comerica and Bank of America (via Merrill Lynch) also offer online asset allocation engines based on an online read of a user's risk and life stage profile.

Much like BankSimple, FutureAdvisor hopes to tap the current zeitgeist to reach people who may feel disaffected by traditional means of financial planning or money management. As such, it takes the position that legacy financial planning is unnecessarily complex.

"Financial decisions don't need to be complex and have been made complex by people in the industry," Lu says. "The harder it's made to seem, the more daunting it looks and people don't want to take control of their investments."