Categories
Reviews

Personal Capital Review 2021

Personal Capital

7

Fees

4.0/10

Account minimum

4.0/10

Ease of use

9.0/10

Beginners

8.0/10

Advanced users

10.0/10

Pros

  • One solution for all of your finances
  • Among the best solutions for very wealthy investors
  • Automatic Rebalancing
  • Tax Loss Harvesting
  • 401(k) Assitance

Cons

  • High Fees
  • You need at least $100,000 to use the wealth management services.
Disclosure: Please note that this article may contain affiliate links

Are you looking for a robo-advisor with a human touch?

You may have found it with Personal Capital.

This financial advisor is great for those with a high net worth or at least $100,000 to invest.

In this review, we’ll take a close look at Personal Capital to see if it is worth it for you. 

What is Personal Capital?

Personal Capital combines the best of both worlds of robo-advisor and financial advisor. You get robo-advisor algorithms, which help you create portfolios, but with advice from a real ‘human’ rather than a computer.

Personal Capital offers a wealth of tools (some of which are free). Some of the tools include:

  • Track your spending (budget your money)
  • Track your net worth
  • Watch your portfolio
  • Track retirement savings
High-net-worth
Account Minimum
The account minimum is $100,000. This will give you access to the free management tools.
Management Fee
The management fee for accounts between $1,000,0000-$3,000,000 is 0.89%. Once the account reaches $10,000,000 the fee will drop to 0.49%.
Portfolio
Customized for each client
Rebalancing
Tax Loss Harvesting
Fractional Shares
Automatic deposits
Smart Beta
SRI
401(k) Assistance
Human Advice
Account Types
Individual, Joint, Roth, traditional, SEP & rollover IRAs and Trusts.
Best for
Investors with a high net worth that are looking for tax optimization and a hands-off investing approach with access to human financial planners.
Summary
Personal Capital has great financial management tools and is definitely the robo advisor of choice when it comes to high profile investing.
High-net-worth
Account Minimum
The account minimum is $100,000. This will give you access to the free management tools.
Management Fee
The management fee for accounts between $1,000,0000-$3,000,000 is 0.89%. Once the account reaches $10,000,000 the fee will drop to 0.49%.
Portfolio
Customized for each client
Rebalancing
Tax Loss Harvesting
Fractional Shares
Automatic deposits
Smart Beta
SRI
401(k) Assistance
Human Advice
Account Types
Individual, Joint, Roth, traditional, SEP & rollover IRAs and Trusts.
Best for
Investors with a high net worth that are looking for tax optimization and a hands-off investing approach with access to human financial planners.
Summary
Personal Capital has great financial management tools and is definitely the robo advisor of choice when it comes to high profile investing.

How does it work?

Personal Capital has two ‘sides’:

  • Free budgeting tool – Anyone can use Personal Capital’s free budgeting tool. Link your bank accounts, credit cards, and investment accounts and set up your budget. You can even plan your retirement with their free tools.
  • Paid financial service – This is the real meat and potatoes. This is your robo-advisor combined with professional financial advice. And that is also the part this review will be about.

Account opening

You need $100,000 to open an account. The minimum is pretty high, which is why I think this is a good platform for high net worth individuals only.

After you sign up and link your accounts, Personal Capital reviews your portfolio and provides advice based on your goals. PC analyzes your fees based on how they affect your retirement funds, as well as your asset allocation, making necessary recommendations to adjustments.

Deposit and withdrawal

Making deposits and withdrawals are simple with Personal Capital. Once you link your accounts, you can make deposits and withdrawals right from your dashboard. After you deposit funds in your PC account, though, there is a 3-day waiting period to withdraw them.

If you have a large withdrawal ($10,000 or higher), you may also request a wire transfer during normal business hours Monday – Friday. Withdrawal requests may take up to 7 days to complete.

Interface

The interface has a simple but effective design. Due to the amount of options there may be a bit of learning curve but I got the hang of it rather quickly. Personal Capital offers a variety of user-friendly tools including:

  • Portfolio analysis – Get a visual representation of your investment portfolio
  • Fee analyzer – Understand how retirement investment fees affect your retirement account and see how you can adjust
  • Cash flow – See your income and expenses all in one dashboard, allowing you to easily see your cash flow over specified periods
  • Net worth – See all of your assets in one place, including real estate

Trading options

  • ETFs
  • Stocks
  • Individual bonds and private equity investments (clients with more than $1 million in assets only)

Costs

  • 0.89% of the first $1 million invested
  • 0.79% of assets between $1 million and $3 million
  • 0.69% of assets between $3 million and $5 million
  • 0.59% of assets between $5 million and $10 million
  • 0.49% of assets over $10 million

Personal Capital charges one annual management fee. There aren’t additional commissions or hidden fees. Their charge is just a fraction of what you’d pay with a traditional financial advisor, but with the same robust services.

Additional Features

Are There Human Advisors?

Yes, all paid investment accounts have access to a human advisor. The amount of your assets determines the level of advice you receive. Investors with $100,000 – $199,000 have access to a team of advisors. You may or may not deal with the same advisor each time you call. Investors with $200,000 or more invested have two dedicated financial advisors. 

Customer service

Personal Capital offers phone and email support 24/7. 

Screenshots / Tutorial

how-to-start-personal-capital

Understanding Personal Capital is best explained with a video. Thanks to Logical Finance for making this awesome tutorial.

Personal Capital Pros and Cons

PROs
You get a full view of ALL of your finances from your checking account to your retirement accounts and everything in between. Everything is located in one dashboard.
CONs
You must adhere to Personal Capital’s asset allocation. It’s not customizable, which may not work for investors that like to tweak their portfolios.
Personal Capital offers a You Index which is a personalized look at your holdings except for your cash, money market funds, and bonds. It’s a good indicator of how your investments are performing over time.
Some people may think the wealth management fees are excessive.
You pay one fee only so it’s easy to determine your costs rather than paying individual commissions and hidden fees.
You need at least $100,000 to use the wealth management services.
Tax Loss Harvesting
Your personal advisor may not be the same person each time ... unless you have at least $200,000 invested
Get up-to-date spending suggestions or investment changes whenever you make changes to your Social Security income or spending, or other changes.
-
Low ETF expense ratios
-
Great for investors that want a hybrid between human advisors and automated robo-advisors
-
PROs
You get a full view of ALL of your finances from your checking account to your retirement accounts and everything in between. Everything is located in one dashboard.
Personal Capital offers a You Index which is a personalized look at your holdings except for your cash, money market funds, and bonds. It’s a good indicator of how your investments are performing over time.
You pay one fee only so it’s easy to determine your costs rather than paying individual commissions and hidden fees.
Tax Loss Harvesting
Get up-to-date spending suggestions or investment changes whenever you make changes to your Social Security income or spending, or other changes.
Low ETF expense ratios
Great for investors that want a hybrid between human advisors and automated robo-advisors
CONs
You must adhere to Personal Capital’s asset allocation. It’s not customizable, which may not work for investors that like to tweak their portfolios.
Some people may think the wealth management fees are excessive.
You need at least $100,000 to use the wealth management services.
Your personal advisor may not be the same person each time ... unless you have at least $200,000 invested
-
-
-

FAQ

Who is Personal Capital best for?

High net worth individuals do best with Personal Capital because the fees scale down the more assets under management that you have. It’s also a great platform for investors that wish to have a hands-off approach and those that want tax optimization. Find out which robo advisor is best for you.

Does Personal Capital have a setup fee?

No, it takes 10 minutes to set up an account and it’s completely free. In fact, the program is free to use to manage your finances and check up on your retirement accounts. If you want wealth management, then you’ll pay fees, but only the annual management fee.

What types of accounts does Personal Capital manage?

You can open retirement accounts including IRA, Roth IRA, and SEP IRAs; nonretirement accounts, and trusts.

You may also have a cash account, but these accounts don’t pay management fees.

What is Smart Weighting?

Personal Capital uses Smart Weighting to reduce the risk of over investing in one sector or type of investment. This way if the market falls in one area, you won’t be heavily impacted.

What is Intelligent Rebalancing?

Personal Capital does an ongoing rebalancing rather than periodic rebalancing. If your portfolio veers too far from its goal, PC rebalances helps keep your portfolio steady and increasing in value.

What is Dynamic Portfolio Allocation?

Personal Capital has an advantage as it sees your entire net worth, not just the investments you have with them, like a traditional advisor. Because of this, PC efficiently allocates your investments and makes adjustments as situations change.

Does Personal Capital use a one-size-fits-all approach?

No, Personal Capital tailors each portfolio to the investor’s individual needs. They take into consideration your age, financial status, and risk tolerance when creating portfolios.

How Does Personal Capital Make Money?

If you sign up for Personal Capitals free app and budgeting tool, they don’t make money. Instead, they make it from the wealth management fee charged to investors.

With the fee ranging from 0.49% – 0.89% of assets under management, it’s easy to see where the money comes from.

Worth It or a Scam?

Whether you use Personal Capital for its free tools or its wealth management, it’s a legitimate company that offers tailored advice and an overall balancing of your finances.

While it does cater to two completely different types of people – either the DIY investors that want to see their net worth in one place or the wealthy investors with at least $100,000 to invest, it does its job well, providing each type of investor with a solid program and advice. 

Alternatives

Personal Capital vs Mint

Mint and Personal Capital have a little in common as they both offer free budgeting tools, but that’s where the similarities end. Mint doesn’t have a robo-advisor component like PC offers. You can track your investments, but they don’t offer human financial advice like PC does.

Personal Capital vs Quicken

Quicken is a long-standing and successful accounting software that offers robust budgeting tools, but has an annual subscription fee. Quicken doesn’t track or manage your investments either.

Personal Capital vs Betterment

logo of bettermentBetterment is a robo-advisor like Personal Capital, but the difference is they have no minimum balance requirement. You can start with $0, but obviously need to invest money to make money. Betterment’s fees are lower, but they offer fewer services too.

Personal Capital vs Wealthfront

wealthfront-best-for-low-feesWealthfront is also a robo-advisor that only requires $500 to start and charges lower fees than Personal Capital. Wealthfront offers a larger selection of investment accounts including 529 plans and taxable brokerage accounts.

Summary

If you need that personal touch when seeking investment advice, Personal Capital offers great service. If you meet the investment requirement, you’ll get the best deal if you have more than $200,000 to invest.

Personal Capital’s financial advisory services are pricey for those with less than $200,000, but the benefit of the overall budgeting components may be enough to sway you.

Robo Chooser

Use the following Quiz and find out which robo advisor is best for you.

 

If you have any questions, please comment below.

Leave a Reply

Your email address will not be published. Required fields are marked *