Category: 1. Personal Capital review

What makes Personal Capital such a great personal finance platform is that it does it all: budgeting, retirement planning, and investing. Not all platforms offer everything. Here’s a roundup of Personal Capital’s standout features:

• Personal Capital’s financial software is free to use, and you’re under no obligation to use wealth management services.
• Personal Capital’s finance software is currently the best online service for monitoring your portfolio. Unlike some other money management platforms, you can use it to manage your investment accounts.
• The retirement planner is second to none/ I found it very useful to perform many role-playing situations. The investment checkup tool is excellent for high-level recommendations.
• Compared to traditional advisors, the wealth management service is cheaper than the standard 1% to 2% advisors usually charge. But it’s not cheap when compared to competing robo advisors.

For those who don’t know how to allocate their investments appropriately, Personal Capital is a godsend. If this describes you, then you should consider the lower-than-average-cost financial advisory service.

Personal Capital is an automated platform, but you can speak to advisors online or by phone. Your advisor will have access to your dashboard, and you don’t need to meet face to face, just virtually.

Is Personal Capital Right for You?

Whether or not Personal Capital is right for you depends on what you’re looking for. If you’re looking for free money management tools, then it’s definitely worth checking out. The company offers a lot of free services.

If you’re considering using Personal Capital as a wealth management service, then you should keep a few things in mind.

• You need at least $100,000 to start using this service. Personal Capital is trying to go after higher-net-worth individuals and squarely compete against the high-fee financial advisors like Edward Jones.
• The fees at Personal Capital are much lower than those charged by traditional financial advisors. Wealth management, trade costs, and custody fees are included — you do not pay trade commissions.
• Every account gets a dedicated advisor, even if you don’t use the wealth management service. It’s been reported each advisor within the firm handles approximately 200 clients, and you can schedule a consultation with your advisor through the app.

Opening an account with Personal Capital is quick and easy.

 Pros

• Complete View of Your Finances – Encompasses all of your finances in one easy-to-use service. Personal Capital gives you access to all your finances in one location. Personal Capital calls it a “360° View of Your Financial Life.”
• Powerful Investment Checkup – It’s a decent starting point and should be adequate for most individuals, though it doesn’t give concrete and actionable items. And I suspect the reason is to upsell you on their advisory service.
• Support via Many Apps – Personal Capital has an app for Apple iPhone, iPad, Apple Watch, and Android. These are similar to the desktop edition and can be used on the go.
• The You Index – It’s a performance metric of all of your current stock, ETF, and mutual fund holdings extrapolated backward. It does not include your cash, money market funds, individual bonds, options, or other alternative investments. It basically shows how your stock portfolio is performing over time.
• Easy to Use – Account setup is brain-dead simple. Their user interface navigation and reporting is well laid out.
• Custom Allocation of Unknown Assets – Personal Capital now allows you to categorize unknown assets.
• Great Reporting – Similar to Morningstar’s X-ray tool, Personal Capital offers a great way to drill down into asset allocation and performance.
• All-inclusive Wealth Management Fee – Personal Capital’s paid-service annual fee includes everything to manage your account. So there are no hidden fees.

 Cons

• Asset Allocation Is Not Customizable – Personal Capital has predetermined asset, allocation models. This is adequate for most people, but not if you want to vary from the recommended allocations.
• Budgeting Tool Needs Improvement – You can monitor cash flow and spending. Budgeting within Mint is easier to use. The spending feature within Personal Capital is available only on the mobile app and not on the website.
• No Reconciliation Tool – You cannot reconcile your monthly bank statements to ensure all transactions are accounted for. However, since the transactions are coming from your bank directly, they should already be in sync.
• Expensive Wealth Management Service – Compared to traditional advisors, Personal Capital is much cheaper, but it’s expensive when compared to robo advisors without human guidance.
• High Minimum for Wealth Management – To be considered as a client of Personal Capital, you need at least $100,000 of investment assets. This minimum is higher than competing robo advisory services.
• No Import Option From Quicken – You cannot import your data from Quicken into Personal Capital.
• Sales Calls from Personal Capital – If you use the free tool, Personal Capital may contact you to become a customer of their paid service.

Everything is automated on Personal Capital, and it’s easy to use on both desktop and mobile.

Mobile Experience

You can’t use a mobile internet browser to access Personal Capital. You must use the mobile app. But it’s more basic than the desktop experience. Instead of the wonderful pie charts and bar graphs, you’ll just have lists that look similar to your banking app. Still, you also can’t use all of Quicken on mobile or tablet, so Personal Capital’s app is a step up.

Desktop Experience

Personal Capital shines on a desktop computer. It’s filled with charts and graphs to make it easy to see exactly how your finances look — great for visual people such as myself.

Data Saving

If you use either the Chrome or Firefox browser, exporting files from Personal Capital is easy. All you have to do is click on the “CSV” icon under “All Transactions,” and you’re all set.

Currently, there’s no way to print reports directly from the app, but you can download the reports as a PDF, which you can then print.

Doing this personal capital review, we find the security level very similar to Mint’s service. Personal Capital requires you to register each computer or other device you use. You must authorize the device you’re using. You can choose from either an email or phone call to verify.

• It’s a poor man’s version of two-factor authentication. There’s nothing wrong with this, and in fact, I applaud Personal Capital for having this feature. I wish this level of security were available with all financial institutions.
• Once your computer is registered, you will not need to go through this process again.
• On iOS devices that support the fingerprint scanner, log into Personal Capital’s app via a swipe of your finger. It’s not foolproof, of course, but it’s a nice touch and an added layer of security.

Is Personal Capital Safe?

• The account information you enter within Personal Capital is stored by the platform in a one-way encryption token.
• You cannot perform any withdrawals or transfers from within Personal Capital’s service. It merely shows you what you have. All information via the service is read-only.
• Lastly, unless you enter your account information into comment fields (which you shouldn’t do), your account information won’t be displayed anywhere.
• Your account is insured by the FDIC up to $250,000.

Yes! Believe it or not, Personal Capital’s free version is free.

Although the company provides the sort of custom advice you’d expect from a robo advisor — along with consultations with real human beings — there are plenty of valuable tools available in its free version.

Without paying a dime, you can link all of your existing checking, savings, mortgage, credit card, retirement, and investment accounts. You can also track your spending, create a budget, monitor your net worth, find out how far along you are on your retirement savings journey, and analyze your fees. That’s quite a lot of value for absolutely zero dollars. Just go to personalcapital.com, sign up, and start managing your financial accounts.

Apart from its free financial fees, Personal Capital offers a top-notch paid wealth management and personal advisory service that is worth taking a look at:

1. Dedicated Personal Advisor
2. Investment Strategy
3. Financial Roadmap

Dedicated Personal Advisor

When you begin under Wealth Management, you are assigned a dedicated financial advisor who will have a meeting with you to discuss your goals. From there, he or she will make recommendations and set up accounts for transferring assets.

The financial advisors will review your portfolio and allow you to personalize it, beginning with a Personal Strategy Guide.

Your financial advisor implements and maintains your portfolio allocation. And he or she monitors it and adjusts it as needed to help you reach your financial goals. The company’s Investment Checkup focuses on asset allocations and fees. These are the most important part of your portfolio — and are manageable. You’ll be notified if there are areas that can be improved.

Monitor the health of your investment asset allocation. By determining your risk profile, Personal Capital will recommend an asset allocation that’s right for you.

Personal Capital’s Investment Strategy

The asset allocation part gets interesting. Personal Capital uses baskets of individual securities and exchange-traded funds (ETFs) to create a model portfolio. Personal Capital is aware that annual fees can decrease the performance of your investments for the long haul.

• Using index funds with annual fees adds expenses on top of Personal Capital’s management fee. Therefore, using index funds decreases your annual return. Instead, Personal Capital invests in individual stocks in a basket of funds.
• By investing in individual securities, your portfolio is more tax efficient as well (if your investments are in taxable accounts, of course). So while the basket of funds won’t mirror an index fund exactly, it will come very close and should have lower fees and taxes. Also, with individual securities, Personal Capital can better manage the taxes you pay via a process called tax-loss harvesting (TLH).
• Personal Capital also offers Personal Funds, which targets a specific investment objective, but you own individual securities rather than a mutual fund.
• For socially conscious investors, Personal Capital also offers its Socially Responsible Personal Strategy (SRI) and recently announced a company milestone of eclipsing $1 billion in assets under management in the company’s ESG portfolios. Socially responsible investing is a way to align your investments with personal values and beliefs, so this may be a strong point of interest for investors looking to align their finances with corporations that are more active with environmental, social, and corporate governance issues.

Financial Roadmap

Announced in April 2020, the Financial Roadmap is a tool available for Personal Capital’s wealth management clients. It’s designed to improve the financial outcomes of advisory clients by delivering personalized, useful, and timely guidance at scale.

The Financial Roadmap generates a prioritized list of financial planning topics such as employer plan analysis and estate planning based on a person’s personalized data. Over time, it recommends new topics to prioritize based on changes in the data. It also recommends where to prioritize savings, how to pay down debt, build an emergency fund, or the amount to save for retirement.

All of this is based on accounts and loans aggregated in each client’s individual — and secure — dashboard. You’ll also get daily or weekly summaries of your investment portfolio and spending.

 Personal Capital’s Wealth Management Fees

Personal Capital Wealth Management fees are all-inclusive. There are no hidden or trailing fees and no trade commissions. For the first million dollars, fees are 0.89%. For private clients, fees are 0.79% for up to $3 million, 0.69% for the next $2 million, 0.59% for the next $5 million and 0.49% for over $10 million.

For Private Clients
First $3M	0.79%
Next $2M	0.69%
Next $5M	0.59%
Over 10M	0.49%

Includes family tiered billing

There are 3 tiers for management:

1. Investment Services for $100,000 to $200,000 in assets
2. Wealth Management for $200,000 to $1 Million in assets
3. Private Client for those with more than $1 million in assets to invest.

Personal Capital’s Wealth Management Alternatives

If you are looking for an alternative online platform with similar wealth management services, you can check out these platforms:

	Personal Capital	Betterment	Wealthfront	Facet Wealth
Account Minimum	$100,000	$0 for the digital plan; $100,000 for its premium account	$500	$0
Fees	0.49%-0.79% annually	0.25%-0.40% annually plus fund fees	0.25% annually plus fund fees	Flat fee from $1,200- $6,000
Personal Advisor	True	True	False	True
Robo advisor Service	False	True	True	False

Personal Capital’s secondary financial planning tool is its free Retirement Planner. This is one of the most comprehensive retirement calculators out there. Offering more than other planning sites, Personal Capital provides long-term financial planning. The best and easiest part of using Personal Capital is keeping all of your information together and creating a planner and forecaster for the future.

These are some of the retirement features what you’ll find:

1. Personal Capital’s Retirement Planner
2. Fee Analyzer
3. College Savings

Personal Capital’s Retirement Planner

With Personal Capital’s Retirement Planner, you can finally answer the question of whether or not you have saved enough for retirement, and with a reasonable degree of confidence.

Find out if you are on target for retirement.

This feature allows you to access spending goals and income events and project future portfolio value. The Retirement Planner pulls all of this together and tells you what kind of shape you’re in for retirement. They also have a Recession Simulator that can tell you how your portfolio would have performed during past recessions. This is an excellent resource for those concerned about the effects a recession can have on their portfolio.

Get a taste of the Personal Capital’s Retirement Planner:

There aren’t many good retirement-planning tools out there. Even the paid tools I’ve seen lack many features. Personal Capital’s tool is perhaps one of the most comprehensive I’ve seen — free or paid. There is a multitude of variables available in it. And you can play many what-if scenarios with your finances.

You do not have to enter your assets and accounts manually; it automatically populates the information. This feature is available on the website and the Apple and Android apps.

Retirement Paycheck — This feature provides users with guidance on how to withdraw money during retirement in the most tax-efficient way.

Fee Analyzer

This useful feature tells you how much your retirement plan is costing you. If your 401(k) is like most, the amount lost to fees will surprise you.

Similar to the Retirement Planner tool, Personal Capital’s 401(k) Analyzer determines the annual 401(k) expenses of the accounts you add within the service. Then, based on some assumptions that you can adjust, you can see the annual fees that are eating into your retirement plan over time.

In my family’s case, our annual expenses are just 0.38%. And at the time of retirement, the total cost of our retirement plans is expected to be over $500,000! That is half a million dollars lost to fees!

You need to pay close attention to the annual fees in your 401(k) plan.

College Savings

The Retirement Planner also allows you to set up a New Education Goal. If you have children, you can add each child by name and birth year and then indicate whether you want to save for college or are considering private school before college.

You can use this planner to compare the costs of colleges and determine your savings needs to meet your educational goals. Pulling in the average college costs by your state and the number of years you’ll have until your child goes off to school, Personal Capital calculates an amount you’ll need. It even adds in inflation. From there, the planner lets you know how much you need to save each month to be prepared.

Personal Capital’s Free Money Management Tools

One of the best features of Personal Capital is its free financial tracking tool. This lets you monitor not only your spending but also your bank, credit card, and investment accounts all in one place. You can even track your cryptocurrency investments with their crypto BETA tool. Just add in your crypto manually and you’ll be able to see it alongside your other assets.

Under Financial Tools, you’ll find a variety of tools that can help you to manage your money in what Personal Capital calls a “360-degree” view.

The tools that Personal Capital offers are:

1. Net Worth
2. Budgeting Tool
3. Cash Flow/Capital Cash Program
4. Savings Planner

Net Worth

Personal Capital can calculate your net worth by simply subtracting what you owe from what you have. To do this, it reviews all your credit accounts, investments, retirement accounts, and bank accounts. Once established, it can help you track your progress as compared to the national average. This enables you to focus on your finances. And it will truly highlight just how damaging credit debt can be and inspire you to make changes.

Budgeting Tool

Follow weekly, monthly, and yearly income and spending habits with the Cash Flow Analyzer Spending tool. This is available on the Personal Capital app and website. Budgeting can be tough, especially trying to keep track of where all of your money is going. Because Personal Capital is connected to all of your accounts, it tracks your expenses for you. And then, following the 50-30-20 rule with 50% of your budget devoted to what you need in life, 30% to what you want, and 20% to savings, you’ll be able to see if you are on a healthy budget or if it needs tweaking — and where. The Upcoming Bills feature shows you a report of the forthcoming bills and their due dates.

Cash Flow/Capital Cash Program

A key to budgeting is watching what is coming in and what is going out. With the Personal Capital dashboard, you will see all of your accounts in one place. And you can view spending and earnings in a bar graph. By seeing it all together, it makes it easier to create a budget and make changes when you see you have deviated from it.

Personal Capital’s new cash account pays interest of 0.05% APY as of March 23, 2020, without requiring any fees. Unlike traditional savings accounts, there are no transaction limits and no minimum required balance with a Personal Capital savings account. Your account is insured by the FDIC up to $250,000.

Savings Planner

The Savings Planner was created to help users set up savings tools without the need for hiring planners. Using this tool, you can plot out how much you need for retirement, emergencies, and other big-ticket items like a down payment on a house. Then you can move funds directly into the appropriate account.

Personal Capital vs. Other Financial Money Management Platforms

How does Personal Capital compare to other online financial money management platforms? Let’s compare:

	Personal Capital	Quicken	Mint	YNAB
Fees	$0 for its money management tools	$34.99 -$105.99 per year depending on the plan	$0	$84 a year
Net worth	True	False	False	False
Savings Planner	True	False	False	True
Budgeting Tool	True	True	True	True
Cash Flow	True	True	True	False
Retirement Planner	True	False	False	False

Personal Capital is one of the hottest financial technology products on the market. Founded in 2009, the goal of Personal Capital was to provide a blend of cutting-edge technology with objective financial advice, including retirement and budgeting tools. The company has grown by leaps and bounds and has over $12 billion in assets under management.

Here at Investor Junkie, we’ve been so impressed with Personal Capital’s vast array of services and tools that we’ve consistently rated it the best personal finance app.