A few years ago, a couple of Bo Lu's friends, his colleagues from Microsoft, came to him and asked for help. The two had $10,000 each to invest, but didn't know how to invest it. Lu was known as the finance expert among his peers.

Problem was, he couldn't find anybody to help.

"The best financial advisors said my friends were too poor," Lu says. "Fee-only advisors wanted a minimum of at least half a million and sometimes a million to invest." So he turned to advisors without asset minimums. But those people "pushed insurance and mutual fund products that they'd get a commission on."

So Lu did something about it: He launched his own firm, co-founding a Web site that provides low-cost, high-quality and unbiased financial advice to the average American.

Launched in May 2012, FutureAdvisor already has $4 billion under advisement (the firm doesn't invest clients' money directly). His service is free for now, but in six to nine months, Lu intends to start charging for it. The plan, however, is to charge much less than the 1% that the average American pays in fees on $100,000 invested in a 401(k).

"We will give specific recommendations that are all low-fee index funds, which can also be implemented as ETFs," says Lu, who graduated from the University of Illinois at Urbana-Champaign.

Developed by Lu's partner, Jon Xu, the product links a client's existing investment account to FutureAdvisor, which analyzes the taxes and fees and then offers a set of recommendations to help investors save their money.

"Fifty million dollars is the amount we've saved our clients so far by finding them cheaper, higher-performing index funds," says Xu, an MIT grad who also worked with Lu at Microsoft.

"We are a financial advisory company, specifically founded to create FutureAdvisor software," Lu says. "We are today and always will be a fee-only advisor."

In 12 months, the company founders have received a total of $6 million in financing from venture capital firm Sequoia Capital. Other investors include Jeremy Stoppelman, founder of Yelp, and Keith Rabois of e-commerce company Square.

"Sound financial advice has only been accessible to the 1%," says Warren Hogarth, a partner at Sequoia Capital. "FutureAdvisor promises to democratize access to financial advice, save consumers thousands of dollars in annual fees and enable customers to retire more comfortably."

FutureAdvisor has also launched a service to address the government's 401(k) fee disclosure regulation. Plan sponsors and administrators are facing a fast-approaching August 30 deadline in which they must comply with disclosure regulations imposed by the Department of Labor in December 2011. Under the new rules, they must disclose detailed fees charged to participating employees. The service is called 401(k) Ratings and it informs investors how much they pay annually in fees for their 401(k) plan and provides recommendations about how to reduce those fees and diversify.

"We don't cater to plan sponsors and administrators," says Lu, "but we work with them as much as we can. We're also not involved in disclosure regulation. It just happens to be the same timing as the compliance deadline."

--Juliette Fairley