Personal Capital Review
Personal Capital is one of the world’s most popular financial analysis tools. Founded in 2009, Personal Capital has over 850,000 users. Here’s our review.
What is Personal Capital?
Personal Capital is a financial analysis service that analyzes your investment portfolio using software-based algorithms. It functions like a personal investment advisor, with the main difference being that your investments are analyzed by a computer instead of a human being.
Persona Capital was founded in 2009 and has over 850,000 users and $175 billion of assets being tracked on the platform.
Tracking your financial accounts with Personal Capital is 100% free. You can add up to 15 accounts to the service and receive customized advice based on the information in those accounts.
Personal Capital also has the advantage of being a Registered Investment Advisor (RIA) with the SEC. The firm recently passed the $1.5 billion dollar mark in accounts under management. Those premium investment advisor and wealth management services are primarily catered to higher net worth individuals.
The financial analysis service was founded by a big name in the payment technology world: Bill Harris, the founder and CEO of Personal Capital, is the former CEO of both Intuit and PayPal.
Many of Personal Capital’s employees previously worked at Intuit, and users will often agree that Personal Capital has a “Quicken-like” feel.
The main difference between Personal Capital and modern robo advisors or financial analysis tools is that the firm particularly targets high net worth individuals. Most Personal Capital customers have between $25,000 and $2 million in liquid assets. As one reviewer explained, “this is a market that is traditionally underserved by Wall Street”.
Typically, these individuals have high enough net worth to have complicated financial management duties, but don’t have enough profit to attract big Wall Street names. Personal Capital aims to serve this market by attracting them with intelligent financial analysis tools and then converting them with full-service wealth management options.
Personal Capital Features
Retirement Planner: Helps you determine if you’re on track for retirement or not (Retirement Planner is only available via the Personal Capital website and not the mobile app).
Budgeting: Lets you track your weekly, monthly, and annual income and spending habits through the mobile app.
401(k) Fee Analyzer: Tells you how much your current retirement plan is costing you. If you’ve never taken a close look at your current fees, then you’re almost definitely going to be surprised by how much you’re losing to those fees.
Investment Checkup: Personal Capital analyzes your portfolio and recommends different assets based on your perceived risk aversion and preferences.
Upcoming Bills: Personal Capital lets you keep full track of your finances by adding upcoming bills and bill payment dates.
Asset Allocation Target: Personal Capital will analyze your assets and let you know if you’re too heavily weighted in one class or underweighted in another.
Email Notifications: Receive daily or weekly summaries of the status of your investment account.
Website and Mobile App: Access Personal Capital via iOS and Android apps or through any web browser.
Apple Watch App: Personal Capital also has the unique distinction of being one of the few financial analysis services with Apple Watch support.
Personal Capital Retirement Planner
Personal Capital is popular for its Retirement Planner feature. That Retirement Planner helps you determine whether or not you’ve saved enough money for your retirement.
With Personal Capital’s tool, you can play through all sorts of different “what if?” scenarios to see what kind of effect your current decisions will have on your future finances.
But the greatest value of the Retirement Planner app is the fact that it automatically syncs data from across your accounts, which means you don’t have to enter your assets and accounts manually.
401(k) Analyzer
Many people are surprised to discover just how much they’re paying for their 401(k). The Personal Capital 401(k) Analyzer is a great way to figure that out.
This analyzer will automatically determine your 401(k) expenses based on the accounts you’ve added to the service.
Then, based on some assumptions, the analyzer will tell you the amount of annual fees you’re paying – and the amount you would be paying if you switched to a wealth management service like Personal Capital.
Personal Capital Pricing
Personal Capital is free to use. All of this account analysis is provided free of charge.
The company makes money by upselling you on their paid financial advisory service.
Many people will be able to get by with just the data included within Personal Capital. However, if you find your financial situation is getting too complicated, then you may want to pay for the complete Wealth Management services offered by Personal Capital.
Wealth Management fees get smaller after your first $1 million and look like this:
-First $1 Million: 0.89%
-First $3 Million: 0.79%
-Next $2 Million: 0.69%
-Next $5 Million: 0.59%
-Over $10 Million: 0.49%
You can sign up for personalized wealth management services at this page.
Personal Capital Wealth Management Features
If you do sign up for the Personal Capital wealth management services, then you’ll enjoy the following features and services:
-Supported Accounts: Traditional IRA, Roth IRA, Joint Accounts, Trusts, and Taxable Accounts
-Minimize Fees by Direct Investing: Personal Capital lets you directly invest in stocks instead of ETFs, helping you reduce your annual fees and taxes.
-Tax Loss Harvesting: Minimize your taxes in taxable accounts by letting the system pare your profits against your losses.
Personal Capital actually uses baskets of individual securities and ETFs to create a model portfolio for its investors. Instead of being exposed to the high fees of index funds on top of Personal Capital’s management fee, Personal Capital saves you money by working with individual securities.
This not only reduces your fees, but it also reduces your tax burden. By buying baskets of individual stocks, you can basically mimic a fund while avoiding management fees.
Personal Capital also has a Personal Funds feature where you can target a specific investment objective. It works in a similar way to a mutual fund, but you own the individual securities instead of owning a portion of the mutual fund.
Conclusion: Who Should Use Personal Capital?
Personal Capital is a free financial analysis tool that lets you add multiple accounts and analyze the performance of those accounts.
Much like the robo advisors that are popping up, you can access all of these tools free of charge without paying Personal Capital a dime. Services like the Retirement Planner and 401(k) answer are worth the signup almost on their own.
Meanwhile, high net worth individuals may be tempted by Personal Capital’s wealth management services, which charge management fees of 0.89% and lower (fees go down after your first $1 million) and are catered towards those with around $1 million ready to invest.
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