Personal Capital Review: What it is and Why We Love it

Money
June 23, 2020
Written by Drew Cheneler
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Money
June 23, 2020
Written by Drew Cheneler
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Founded in 2009, Personal Capital has attracted a legion of fans and is one of the highest rated FinTech firms around. Personal Capital is a top notch 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, I am confident by the end of this review, you will be a die-hard fan like the rest of us.

Personal Capital Review: What is it? And how does it work?

Personal Capital Overview:

An easy-to-use financial tool that allows you to track your net worth, monitor your investment performance, and create a friendly budget all from a single dashboard.

Account Fees:

0.49% – 0.89% Management Fee

Minimum Investment:

$0 or $100,000 for their Paid Plan.

Personal Capital Account Types:

People often believe Personal Capital only offers a paid plan, but this could not be farther from the truth. In fact, most of their members use Personal Capital because of the Free Financial Dashboard that they offer. Currently, Personal Capital offers two different account type’s: Personal Capital Free Financial Dashboard & Personal Capital Wealth Management.

Is Personal Capital Actually Free?

Yes! While they do offer a paid service, which we will discuss in due time, Personal Capital offers awesome free tools and resources to help you manage your money and plan for retirement. For free, you can link all of your bank accounts, credit cards, mortgages, personal loans, investment accounts, retirement plans, and saving accounts. With this imported data, Personal Capital will track your net worth, help you create a budget, analyze costly fees, and will assist you in preparing for retirement. Our team likes Personal Capital so much that it took the top spot for best budgeting apps. If you are looking for a free holistic view of your finances, then look no further. Take the next step and sign-up.

Linking Your Financial Accounts on Personal Capital

Linking your accounts on Personal Capital is a breeze. As you sign up, they make it seamless for you to immediately link your bank accounts, loans, mortgages, and more. From the mobile app or website, you will provide your specific username and password for each account that you want to link and view on their free financial dashboard.

What Financial Accounts Can You Link on Personal Capital?

Fortunately, Personal Capital offers the most comprehensive financial dashboard which allows you to view all of your financial accounts in one central location.

You can link:

  • Bank Accounts
  • Saving Accounts
  • Credit Cards
  • Mortgages
  • Personal Loans
  • Investment Accounts
  • Roth IRAs, Pensions, 401Ks, other Employee Sponsored Financial Plans
  • Car & Student Loans
  • Other Valuables such as Cars & Jewelry

Here is a quick preview of what your dashboard will look like once all of your financial accounts are linked up to Personal Capital.

Personal Capital allows you to link your financial accounts with ease.

Source: Personalcapital.com

Now that we know how to sign up for a free Personal Capital account, link our financial accounts, and access the comprehensive dashboard, let’s dive deep into the phenomenal features you now have access to.

Personal Capital Free Financial Dashboard:

Personal Capital offers one of the best free financial dashboards for you to use. Designed with the user in mind, they allow you to track your net worth, plan for retirement, monitor your investment portfolio performance, view what goes in and out of your bank account (cash flow), and estimate how much you should be saving for education.

With Personal Capital, you get access to a free financial dashboard that displays your linked accounts, spending patterns, and investment performance.

Source: Personalcapital.com

Free Financial Dashboard Features:

The free financial dashboard is designed to be your one stop shop for managing your money. You will soon find out why this is our favorite personal finance app to use. Shall we review the standout features?

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.

On the financial dashboard, Personal Capital will allow you to compare your net worth to the median U.S. Household net worth. 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 on a monthly basis.

Personal Capital will show you how much you spend each month and will also show how much you deposit into your bank accounts

Source: Personalcapital.com

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, ect), 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 even 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 robust spreadsheet that analyzes the fees of most index and mutual funds available. However, with Personal Capital you will know exactly what you are being charged and the damage these hidden fees are having 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 Capital just 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.

Personal Capital will help you save and plan for education expenses.

Source: Personalcapital.com

Personal Capital Wealth Management Plan:

As you can imagine, Personal Capital offers an authentic, in-depth, and great Wealth Management Plan for eligible members. 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 that is 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 (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 portfolio of ETFs and individual securities, provide you with exclusive access to their state-of-the-art digital tools, and will be available 24/7 for any questions you may have.

Wealth Management (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 (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 for Wealth Management

  • $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

Backed by a team of Certified Financial Planners and Investment Professionals, Personal Capital provides their clients with a personalized approach to investing. Recognizing that Index Funds add 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 are able to identify tax-loss harvesting opportunities. Their team can easily identify falling stocks and sell them off .

Recently, Personal Capital 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 for a specific cause.

Personal Capital Cash Management

Personal Capital just rolled out a cash management program. 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 everyday, enjoy no fees, and take advantage of unlimited monthly transfers. In our opinion, it is one of the best around and is emerging as one of the top cash accounts in the financial industry.

Benefits of Personal Capital:

  • Free Financial Dashboard: Regardless 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!

Downsides of Personal Capital:

  • 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

Summary: Personal Capital Review

As you can see, Personal Capital offers 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 their free financial software and tools that they offer. Personal Capital is the best resource you can use to take ownership of your finances and plan for retirement.

Want to See How it Stacks Up? Read our Article – Personal Capital vs. Mint

Drew Cheneler
Drew Cheneler
Drew is a recognized Credit, Small Business, and Personal Finance Expert. He has been quoted in CNBC, The Huffington Post, Business.com, Moneyunder30, and more. He is known for breaking down complex personal finance topics into action-oriented advice, so you can make the most of your hard-earned money.