Personal Capital Review: Is It the Right Financial Management Platform for You?
Financial Planning Services
Investment Expense Ratios
- Free financial planning tools for all users
- Access to in-person financial advisors for wealth management clients rather than a mere robo-advisor
- Provides services such as estate and tax planning that aren't often available on other investing platforms
- High account minimum and fees for wealth management services
- Limited investment options under $200,000
What Is Personal Capital?
Personal Capital is a hybrid digital wealth management platform that uses robo-advisor algorithms and in-person financial advisors for a holistic investing approach. There are two distinct parts to this platform, making it ideal for two very different groups of users:
- Personal Capital boasts a suite of free financial tools not often found on other platforms. These tools allow for simple day-to-day money management and long-term financial planning. You can monitor and manage all of your accounts in one place, giving you a clear picture of your overall financial health.
- Personal Capital also offers wealth management services to high-net-worth investors. Wealth management clients access advanced investment tools and dedicated financial advisors and specialists.
Is Personal Capital Trustworthy?
As of March 2022, Personal Capital has more than 3.3 million users, of which about 31,800 use their investment services. They have over $23.2 billion in assets under management, so they are well-established.
As for security, Personal Capital uses military-grade AES-256 encryption. Account access has multi-factor identification and allows for biometric identification.
Personal Capital Stand-Out Features
Personal Capital packs a lot of features and tools into one platform that can benefit anyone regardless of net worth. But the Personal Capital review reveals four notable elements, making it a standout wealth management platform.
Financial Planning Services
Personal Capital offers a suite of free financial planning tools for monitoring and managing your financial health.
Users can go to the dashboard for a snapshot of their financial picture after linking accounts, from checking to credit cards to investments. The dashboard provides a view of cash flow and budget, including account balances, emergency funds, retirement savings and overall portfolio balance and net worth.
While the budgeting tool lacks many of the capabilities found with other platforms, the remaining suite of tools exceeds expectations. Users can:
- Easily monitor portfolio performance and compare it to market performance
- See an analysis of investment fund fees and how much they actually cost
- Get suggestions for improving investment asset allocations
- Use the retirement planning tool to simulate how various scenarios or a recession will impact their retirement
- Set and track savings goals
Portfolio construction begins with an online questionnaire and an interview with a financial advisor. This holistic approach provides a level of portfolio personalization that isn’t often possible with robo-advisors.
Personal Capital uses a proprietary portfolio selection process called Smart Weighting to provide better portfolio diversification. Rather than mimic traditional market-cap-weighted indexes, it equally weighs economic sector, style and size of investments to construct an index.
The table below displays the minimum requirements and investment types available for each level of Personal Capital’s wealth management services.
|Investment Services||Wealth Management||Private Client|
|Minimum Investment||$100,000||over $200,000||$1 million|
|Investment Types||– ETFs||– ETFs
– Individual stocks
– Individual stocks
– Individual bonds
– Private equity investments
|Advisors||– Unlimited advice and retirement planning assistance||– Two financial advisors
– Specialists in real estate, stock market, and more
|– Two financial advisors
– Access to Personal Capital’s Investment Committee
– Access to retirement and wealth planning specialists
Investment Expense Ratios
Personal Capital wealth management clients can expect portfolio expense ratios averaging only 0.08% — below the 0.20% threshold most experts consider low.
Personal Capital uses three strategies to minimize your tax obligations:
- Forgoing mutual funds for ETFs and tax-efficient stocks
- Strategically placing investments in the most tax-efficient account types to improve after-tax returns
- Offsetting investment gains with losses through tax-loss harvesting
Additional Wealth Management Features
Potential wealth management clients shouldn’t overlook these features:
Multiple Accounts Supported
Personal Capital provides the following:
- Advice on 401(k)
- Direct examination of trusts, non-retirement accounts, and IRAs
Account Management, Planning or Subscription Fees
Personal Capital charges one all-inclusive annual management fee. They have a declining fee schedule that begins at 0.89% — the higher your investments, the lower the fee. There are no subscription, onboarding, transaction fees or commissions.
High Account Minimum
Personal Capital’s $100,000 minimum required investment to sign up for wealth management services might be out of reach for many people, but no more so than many in-person financial advisors who typically have a minimum asset threshold of $100,000.
A $200,000 minimum is required to move beyond ETFs and into individual stocks.
Advisor Access and Credentials
Not all Personal Capital financial advisors are Certified Financial Planners, but users can request one. A team of fiduciary advisors serves clients with balances less than $200,000.
Those with over $200,000 have access to two financial advisors. They can also consult specialists to advise on concerns ranging from home buying to education, retirement and estate planning.
Good To Know
For those looking to earn a higher interest rate on their cash than traditional checking or savings, Personal Capital offers the Personal Capital Cash account with no minimum balance.
Who Is Personal Capital Best For?
Personal Capital is completely free for anyone wanting better insight into their day-to-day finances and wealth-building efforts. Regardless of size, those with existing investment accounts can benefit from the investment fee analyzer, investment checkup tool and retirement planning tool to help determine if their portfolio performance is in line with retirement goals.
The investment services are best suited for high-net-worth investors who want the hands-off convenience of a robo-advisor platform but the personal touch of a financial advisor.
Personal Capital Alternatives
Investors who don’t yet have $100,000 to invest may want to consider other robo-advisor platforms, such as Betterment or Wealthfront. Both have lower fees and lower minimums. These platforms may not provide access to a financial advisor or some of Personal Capital’s financial tools but can provide the opportunity for new investors to begin building a portfolio.
For those more in need of money management than wealth management, a platform such as Mint might be more valuable than Personal Capital. Many of the tools are the same, but Mint’s tools are better suited for those who need to focus more on their current financial state rather than think about the long-term.
For those trying to gain control of their budget or reduce debt and spending, a tool such as Mint is ideal for setting budget limits and sticking to money goals.
How To Get Started Using Personal Capital
The steps to signing up with Personal Capital are the same for those wanting to use the free tools and those who intend to invest.
- Create an account by providing your first and last name and email address and creating a password. Additional identification may be necessary after this step.
- Link any financial accounts to be monitored with Personal Capital including checking, savings, retirement accounts, credit cards, mortgages and other loans.
- Set up Wealth Management services by linking the bank account to be used to fund the investment account.
- Schedule a web conference with a Wealth Management advisor.
Both high-net-worth investors and those working to become one will find that Personal Capital’s financial planning tools were explicitly designed with wealth-building in mind. Still, their money management tools can help anyone gain better control of their finances.
For investors, other robo-advisors typically have lower fees. Still, some would say the access to financial advisors and other specialists makes Personal Capital a good deal, especially for those who prefer a holistic wealth management approach. Users also benefit from doing their budgeting, investing and retirement planning all on one platform.
Personal Capital FAQPotential clients may still need answers to commonly asked questions about Personal Capital.
- Is Personal Capital really free?
- Yes, Personal Capital is free for anyone who wants to use its financial planning tools. Only those using the wealth management services pay fees.
- Is it safe to link bank accounts to Personal Capital?
- Personal Capital uses military-grade AES-256 encryption to keep data safe. Additionally, it uses Envestnet Yodlee to safely verify and link accounts.
- Is Personal Capital FDIC insured?
- Yes, funds deposited in the Personal Capital Cash Program are FDIC insured up to an aggregate of $1.5 million by program banks.
Information is accurate as of May 2, 2022.
Editorial Note: This content is not provided by Personal Capital. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by Personal Capital.
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