Personal Capital Review: Is It Worth It?

Founded in 2009, Personal Capital has attracted a legion of fans. It is one of the fastest-growing FinTech companies in the United States.

Personal Capital is a financial tool that brings together advanced algorithms and human advisors to help you monitor your finances.

In this Personal Capital Review, we will reveal the good, the bad, and the ugly. However, by the end of this review, I am confident you will be a die-hard fan like the rest of us.

What Is Personal Capital?

Personal Capital is a financial technology company that offers easy-to-use financial tools that allow you to track your net worth, monitor your investment performance, and create a friendly budget all from a single dashboard.

Put simply, it is a robust investment app that helps you make smart financial decisions, track your money with ease, and provides tailored investment advisory services to select customers.

How Does Personal Capital Work?

Personal Capital allows you to view your money from a bird’s eye view. It does this by syncing your bank and investment accounts.

Currently, customers can link their checking accounts, credit cards, savings accounts, 401K’s, retirement accounts, and standard brokerage accounts. Pulling all your data, Personal Capital presents you with a robust overview of your performance and spending habits.

This view alone is what makes Personal Capital worth it. Data is a beautiful thing, and Personal Capital helps you understand it in plain English.

Personal Capital Features and Services

Personal Capital comes with numerous features and services, some are free, and others are not. Here is what you need to know.

Free Financial Dashboard

The free financial dashboard is designed to be your one-stop-shop for managing your money. From here, you can review your spending habits, debt, investment performance, and net worth.

Gone are the days of using an excel spreadsheet or google doc to track your net worth. Personal Capital allows you to do it passively and in real-time.

As you go on with your life, Personal Capital will remain with you every step of the way if you maintain your account.

Want to track that Starbucks coffee you had before work? Personal Capital will. What about unaccounted for holiday expenses? Personal Capital will also track this.

Calculate Net Worth

With Personal Capital, you will be able to see your net worth in real-time.

By linking your investment, retirement, and bank accounts, they can calculate your net worth instantly.

Remember, your net worth is calculated by adding up what you own (assets) and subtracting what you owe (debt). Simply, it is all of your assets minus your liabilities.

Personal Capital will allow you to compare your net worth to the median U.S. Household net worth on the financial dashboard.

This helps you know exactly where you stand compared to your peers. As they tout, Personal Capital will provide you with a holistic overview of your finances.

Create a Budget & Monitor Cash Flow

While Personal Capital will not create a tailored budget for you, they will provide the necessary insight you need to create your own.

Their free financial dashboard will carefully analyze your monthly income and expenses, so you can see what you spend the most money on each month.

Personal Capital will provide you a detailed overview of your spending patterns, so you can effectively create a budget following the 50-30-20 principle.

With a 360-degree view of your finances, Personal Capital will finally let you save more than you spend monthly.

Personal Capital Retirement Planner

Arguably, the best feature Personal Capital offers for free is their retirement planner.

With your linked accounts, Personal Capital will tell you if you are financially prepared to retire.

Fret not. If you are about to incur a big expense (buying a house, paying for college, getting married, etc.), Personal Capital will automatically calculate the financial impact it will have on your retirement.

If you ask me, I think it is magic what their financial software can do. The insight they provide will help you retire on time and securely.

Fee Analyzer

If what you have read is not enough, Personal Capital will reveal how much-hidden fees are costing you.

As we all know, hidden fees cost the average American hundreds of dollars on an annual basis.

Their team of experts created a powerful spreadsheet that analyzes most index and mutual funds fees.

However, with Personal Capital, you will know exactly what you are being charged and the damage these hidden fees have on your retirement!

Detailed Education Planner

Undeniably, paying for college or higher education is one of the biggest expenses we will all incur in our lives.

Personal Capitaljust released a new feature that allows you to view the impact of attending an in-state or out-of-state college.

To help you out, they will determine what your annual savings will have to be to attend the school of your choice.

As we all know, going to college is expensive but a great opportunity to further your career. Personal Capital makes it easy to understand the overall financial impact of attending college.

Dedicated Financial Advisors

Clients with balances over $200,000 get access to a team of two financial advisors. These financial planners will help you with retirement planning, taxes, estate planning, coming up with new financial goals, refinancing loans, and so much more.

This is largely why Personal Capital has attracted a legion of high net-worth clients, who utilize the service to make the most of their money. However, it is important to note that these financial advisors aren’t always certified. CFP’s and CFA’s are available on request.

Advisors can be reached by phone, email, and video chat.

Personal Capital Review: Wealth Management Plan

• Minimum Account Balance: $100,000

As you can imagine, Personal Capital offers an authentic, in-depth, and great Wealth Management Plan for eligible members.

That said, Wealth Management Plans are only available to customers with an account balance of $100,000 or greater. This is one of the few downsides of using Personal Capital.

With over 3,500 enrolled members, Personal Capital has $12.3 billion assets under management. If you are looking for an online wealth management plan cheaper than the traditional wealth management firm, then look no further.

They will help you invest your money and effectively manage your wealth.

Currently, the Wealth Management Plan includes three tiers: Investment Services, Wealth Management, & Private Client.

Investment Services

• Required Assets: For Clients with $100,000 – $200,000 Invested Assets

Clients enrolled in this plan get unlimited access to a team of experts who help you manage your portfolio and plan for retirement.

Personal Capital will professionally manage your ETFs and individual securities portfolio, provide you with exclusive access to their state-of-the-art digital tools, and be available 24/7 for any questions you may have.

Wealth Management

• Required Assets: For Clients with $200,000 – $1,000,000 Invested Assets

Those eligible for this plan get all of the features listed above and more. As a member of their Wealth Management Plan, you get two dedicated financial advisors who will carefully craft a customized portfolio that aligns with your financial goals, but that’s not all.

You also get exclusive access to a real estate and stock option specialist. And finally, Personal Capital will provide your portfolio with tax optimization.

Private Client

• Required Assets: For Clients with $1,000,000 + Invested Assets

If you are privileged enough to be a Private Client for Personal Capital, then you are in good hands. Personal Capital will provide you with a comprehensive one-on-one wealth management experience.

You will get all of the features we mentioned above, plus priority access to their coveted investment committee.

However, the best part is that you get exclusive access to invest in lucrative private equity deals. Those who sign up to be a Private Client can expect to generate healthy returns on their investments.

Personal Capital Fees

• $100k – $1 Million: 0.89%
• First $1 – $3 Million: 0.79%
• $3 – $5 Million: 0.69%
• $5 – $10 Million: 0.59%
• $10 Million+: 0.49%

Personal Capital Wealth Management Investment Strategy

Personal Capital provides its clients with a personalized approach to investing.

Recognizing that Index Fundsadd on to your annual fee, Personal Capital invests in individual securities to craft your portfolio.

Furthermore, they employ a tactic called Smart Weighting, which means they invest equally across all sectors/industries.

This technique reduces your overall risk and is proven to be less volatile. Since Personal Capital invests in individual securities, they can also identify tax-loss harvesting opportunities. Their team and technology can easily identify falling stocks and sell them off.

Moreover, Personal Capital also just rolled out socially responsible investment opportunities. Their team of experts carefully vetted all investment opportunities to ensure they are the best for the environment, abide by all Government regulations, and are socially responsible.

This is a great added feature, especially if you are passionate about a specific cause.

>> Learn More: How to Start Investing

Personal Capital Cash Management

Personal Capital just rolled out a cash management account. As they state, it is a High Yield Cash Account (checking account).

Their cash account is designed to be a one-stop-shop for you to manage your family finances.

With this account, you can set up direct deposits, withdraw up to $100k every day, enjoy no fees, and take advantage of unlimited monthly transfers.

In our opinion, it is one of the best around. It is emerging as one of the top cash accounts in the financial industry.

What Are the Pros and Cons of Personal Capital?

Pros:

• Free Financial Dashboard: Regardless of if you sign up for their wealth management program or not, you still get unlimited access to their robust financial dashboard.
• One Flat Fee: With Personal Capital, there are no hidden fees. Instead, you will pay one flat fee if you enroll in their Wealth Management Plan.
• Dedicated Financial Advisors: Qualified members get to enjoy unlimited access to a dedicated team of personal financial advisors.
• Free Financial & Budget Tools: Personal Capital provides all users with free financial calculators and advanced budgeting tools so they can make the most of their money.
• Tax Optimization: The team at Personal Capital employs robust tax optimization strategies.
• Socially Responsible Investment Opportunities: Personal Capital allows you to invest in socially responsible assets!

Cons:

• High Minimum Investment: Personal Capital requires a $100,000 minimum investment to qualify for their Wealth Management Plan. This is not ideal for those who are starting to invest or for fresh college graduates.
• Management fee is a bit High: Even though you only pay between 0.49% – 0.89%, a robo-advisor typically charges 0.25% – 0.40%. However, Personal Capital provides human insight, which is far better than a standard robo-advisor.
• More focused on Investments: The budget tools offered by Personal Capital are not the best, but they get the job done! They are routinely improving these tools, and they will soon be the best on the market in due time.
• Sales Calls & Solicitation: Free members can expect to receive a phone call or two from their sales teams. As you can imagine, they want you to sign up for their Wealth Management Plan.

Is Personal Capital Safe?

Yes! Out of all of the Financial Institutions, banks, and robo-advisors we reviewed, Personal Capital is one of the most secure platforms.

They are dedicated to protecting your data and personal identifiable information.

Personal Capital employs two-factor authentication, AES – 256-bit encryption, and a layered defense-in-depth approach.

Who and what is Personal Capital Best for?

• Individuals who want access to Free Financial Tools
• Tax Optimization
• Passive Investors
• High Net Worth Investors who want a team of experts to help them manage their money
• Those looking for a cheaper alternative than a traditional wealth management firm

How Does Personal Compare to Other Investment Services?

#1. Personal Capital vs. Wealthfront

Personal Capital is designed for those who want human interaction, professional help, and a little more handholding.

Wealthfront is a Financial Technology company that is a bit cheaper (0.25% annual advisory fee) than Personal Capital. However, it emphasizes technology, and you will not have immediate access to a team of financial planners and experts.

That said, on Wealthfront, you can still build a portfolio from scratch, or you can use a pre-built portfolio that was crafted by their research team. The pre-built portfolios vary in level of risk, targeted industries, and overall strategies.

#2. Personal Capital vs. Mint

Mint is a free alternative to Personal Capital. It is strictly a budgeting app and will not help you with investments. However, Mint is 100% free and is a great way to track your daily spending habits.

It is important to note that Mint is free, but since it is free, expect advertising emails recommending you sign up for various financial products.

This is how they make money. Regardless, Mint is still a viable option for those looking for a birds-eye view of their finances for free.

>> Learn More: Mint vs. Personal Capital

#3. Betterment vs. Personal Capital

Betterment is a hybrid robo-advisor and bank. With a Betterment Account, you can get an interest-earning savings account, low fee rewards checking account, and an automated investing experience.

Betterment is designed for those who want a hands-off investing experience and currently offers some of the best retirement accounts.

>> Learn More:Betterment Review

Bottom Line: Personal Capital Review

As you can see, Personal Capitaloffers some of the best free financial tools. From identifying your spending patterns to monitoring your finances in one central location, and everything in between, Personal Capital is a great resource to utilize.

Remember, you are not required to sign up for the Wealth Management plan. So, if you are like me, take full advantage of the free financial software and tools they offer.

Personal Capital is the best resource you can use to take ownership of your finances and plan for retirement.