Personal Capital Review

Personal Capital offers wealth management services and free financial tools. But is it legit? Find out if this robo advisory service is right for you.

With a 0.89% annual management fee, Personal Capital is more expensive than other robo-advisory services.

But it claims to offer a more personalized investing strategy that can lead to a better financial outcome. So is it worth the higher fee?

If you're not sure about using their investment service, you can always use their free financial tools and get a free portfolio consultation. You'll still receive custom advice you can implement yourself.

Read on to learn how Personal Capital works, and how it can help you reach your goals.

What is Personal Capital?

Personal Capital is an all-in-one financial toolkit. It offers 2 main services:

1. Advanced financial tools (free)
You can access the platform's robust money management tools without signing up for the other services. Link your accounts to get a snapshot of your financial life all in one place, including:

• Net worth
  
• Bank accounts, credit cards, mortgage and other loans
  
• Spending analysis
  
• Retirement planners
  
• Portfolio performance

2. Wealth management (paid)
Personal Capital offers robo-investing coupled with human financial advisors. The annual fee is 0.89% and requires a $100,000 minimum investment.^[1]

The platform can design a personalized investment strategy for your goals at less cost. This makes it a stand-out from other robo-advisor services.

Personal Capital currently has over 3.1 million registered tools users and manages over $23 billion of assets.

In this Personal Capital review, we'll discuss:

Who Personal Capital is Best For

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• Casual budgeters
  Even if you just have a couple of bank accounts and a credit card or two, the free personal finance tools can help. Use them to review spending, set future goals, and see your account balances all in one place.

• Serious investors
  The wealth management service is open to those with $100,000 or more to invest. Use Personal Capital's unique combination of robo-advising and professional human advisors to maximize your investment returns.

• Retirement planners
  Personal Capital excels at retirement planning. The free tools offer advanced retirement calculators. And if you are an investment client, the financial advisors will help you develop a retirement plan.

Personal Capital Pros & Cons

PROS:

• Free and easy to setup
  
• Wealth management service offers more custom strategy than other robo advisors
  
• Advanced money management tools
  
• See your entire financial life in one place
  
• Retirement planner
  
• Free personalized investment advice
  
• Cryptocurrency tracking

CONS:

• Limited budgeting tool
  
• Cannot import from Quicken
  
• Cannot manually enter transactions
  
• Higher fees for wealth management service
  
• $100,000 minimum for wealth management service

Keep reading for a full breakdown of both services that Personal Capital offers.

Wealth Management

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Personal Capital offers investment management for clients with $100,000 to invest. The service combines robo-investing with oversight from human financial advisors. This includes unlimited advice and retirement planning help from a financial advisor from Personal Capital.

That means much of your investing is automated, but a committee of advisors and researchers provide guidance. They take the time to understand your personal financial situation and long-term needs in order to design a custom strategy.

3 Levels of Service

The level of investment management you get depends on your balance. Here are the 3 tiers:

Investment Service ($100k - $200k balance)	Wealth Management ($200k - $1M balance)	Private Client (Over $1M balance)
Unlimited help from financial advisors	2 dedicated financial advisors	2 dedicated financial advisors
Portfolio of ETFs	Customized portfolio with individual stocks	Customized portfolio with individual stocks and bonds
Reviews upon request	Regular reviews	Regular reviews
Tax optimization	Tax optimization	Tax optimization
	Financial decisions support	Financial decisions support, plus in-depth support for retirement and wealth planning
	Access to specialists	Priority access to specialists and Investment Committee
		Private equity investment options (for accounts $5M+)

Fees

Personal Capital's wealth management service is aimed toward people with at least $100,000 in investment assets.

But the more you have to invest, the lower the fees. The annual structure for the fee-based service is:^[3]

These are all-inclusive management fees. There are no additional trade commission fees or any other hidden charges. They are higher than competitors like Betterment, but you get real financial advisors to help design your portfolio.

How Wealth Management Works

During your free consultation, Personal Capital's personal finance advisors will take time to learn about your goals, concerns, and risk tolerance. This covers areas like:

• Ways to build a tax-efficient portfolio
  
• Insights on budgeting and cash flow
  
• 401k advice and diversification

Based on this information, Personal Capital's in-person team creates a personalized plan for you. The robo-advisor's automated software then handles the investing and maintenance of your portfolio.

But you still have access to advisors anytime if your situation changes. They are available by phone, email, and video chat to make adjustments as needed.

Portfolio Management Features

Personal Capital's goal is to yield the highest returns with the least risk. Here's how their portfolio works:

• Personalized strategy
  Personal Capital uses your entire financial picture to build a personalized portfolio tailored to you. A financial advisor works with you to identify the best strategy for your goals. As life changes, your portfolio strategy will evolve too.

• Diversified portfolio
  Like most robo-advisors, your portfolio is made up of ETFs, which tend to be cheaper. Your portfolio is built to be globally diversified using 6 different asset classes:
  1. U.S. stocks
     
  2. U.S. bonds
     
  3. International stocks
     
  4. International bonds
     
  5. Alternatives such as real estate investment trusts, precious metals, and energy
     
  6. Cash

• Automatic rebalancing
  Your portfolio is reviewed daily to see if it needs to be rebalanced. This also makes opportunities for buying low and selling high, which can increase your returns.

• Tactical weighting
  This strategy weighs your investments equally between different styles and sectors (for example, so you're not so heavily weighted towards large-cap companies or technology stocks). This provides better diversification with less risk.

• Tax optimization
  Personal Capital uses these strategies to reduce your tax burdens:
  
  • Asset location: Diverting high-yield assets into tax-protected accounts like IRAs.
    
  • Tax loss harvesting: Selling some investments at a loss to offset capital gains.
    
  • Tax efficiency: Investing in tax-efficient stocks and ETFs over mutual funds.

• Socially responsible investing
  Personal Capital offers a personalized socially responsible investment strategy, so you can invest in companies that align with your values.

Financial Roadmap

Financial Roadmap is the newest feature for wealth management clients. It's designed to help you prioritize your financial planning.

There are 19 different financial planning topics. The tool first creates a priority list for you based on its analysis of your accounts. You can customize the list according to your needs. As your data changes, Personal Capital will introduce new priority topics.

This list is meant to let you know areas you should work on first. It will give you personalized recommendations and track your progress towards each goal.

It also gives your personal advisor a real-time view of your financial situation. You can work together with your advisor to discuss your current goals and how to achieve them.

Free Tools

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Anyone can open a Personal Capital account for free. Start by linking all your accounts to see your entire financial life in one place. You don't have to log in to each account separately.

Now let's take a more detailed look at Personal Capital's tools.

Dashboard

The visual charts and graphs make it highly readable, something we appreciate. After linking your accounts, you'll see a dashboard like this:

Screenshot of Personal Capital

Use it to review summaries of:

• Your total net worth (including assets and liabilities)
  
• A balance of all your accounts (checking, savings, investment accounts, credit cards, and loans)
  
• Your cash flow for the past 30 days (income and expenses)
  
• How you're doing on budget this month
  
• Your overall portfolio balance
  
• Your retirement savings progress for the year
  
• Your emergency fund balance

Try It Out: Personal Capital's free financial dashboard

Cash Flow Analyzer

Personal Capital tracks your deposits and spending. You'll get a quick snapshot of your income vs. expenses.

The above graph shows the cash flow for the current year, month by month. You can see how you're doing on cash flow overall and the monthly average.

The Income and Expenses tabs offer more detail on where your funds are being spent (or saved). The tool also provides your monthly averages for both categories.

Transactions Tracker

Do you know how you're spending your money? Personal Capital tracks your transactions and displays the activity on each account.

Sort your transactions using the following categories:

• Cash
  
• Investments
  
• Credit Card
  
• Loan
  
• Mortgage

You can also filter your activity for a specific time period. This makes it easy to glimpse an overall picture of your finances through your Personal Capital account, rather than reviewing all of them separately.

It can be eye-opening when you have all of your transactions together like this. It can help catch those little things you weren't paying attention to on a daily basis.

Assign labels to certain transactions, such as business, medical, reimbursable, etc. to separate your expenses during tax time.

Budgeting

Create a monthly budget using the Budgeting box—Personal Capital tracks how much you've spent this month. You'll also see your spending compared to the same time the previous month.

This budgeting feature is very simple. You can't assign a budget to each spending category or set other features. But it's helpful to get a peek at how you're managing your monthly budget.

Bill Reminders

Personal Capital reminds you of upcoming bill payments for credit cards, loans, and mortgages. This is a great feature. It's easy to get caught up with other things, so seeing when everything is due all in a simple snapshot offers peace of mind. You'll see the:

• Due date
  
• Statement balance
  
• Minimum amount due

Net Worth Calculator

Once you've linked your accounts, Personal Capital will calculate your "net worth" (assets minus liabilities). It adjusts the figure depending on your ever-changing financial situation—you'll even get a weekly update.

You can manually add in things like home value, car, jewelry, art, and manual loans, so they're all calculated into your net worth.

Knowing your net worth will make it easier for you to compare against your age group average.

Portfolio Overview

If you have multiple investment accounts, Personal Capital will combine everything to show you the overall performance of your portfolios.

The You Index feature measures the performance of all of your stock, cash, ETF, and mutual fund holdings extrapolated backward. You can compare your portfolio's performance to the S&P 500, DOW, etc.

Fee Analyzer

This is the area where most folks lose money without even realizing it. Why? Many people don't know the hidden fees within their accounts. Personal Capital's tool tells you just how much of your funds you may be losing to fees.

In this example, 21% of the earnings are being lost to fees. The number at the bottom projects costs based on current contributions and savings goals. Almost $543k will be spent on fees by the time the user reaches retirement age.

Personal Capital also shares the expense ratio for each fund and how much it costs in fees a year. For example:

This will help you see which funds have the highest expense ratios and you can consider switching them out.

Investment Checkup

This tool helps you analyze your accounts, which may include:

• Stocks, bonds and ETFs
  
• Mutual funds
  
• Other types of assets
  
• Cash

Based on your goals and risk profile, Personal Capital may suggest you change your allocation (like more bonds and fewer stocks) much like a personal financial planner would.

In the above screenshot, you can see the current and suggested target allocation. You'll also get very specific recommendations on how to reach the target allocation.

Cryptocurrency Tracking

Personal Capital's newest feature is the Cryptocurrency BETA. You can track all your coins and their current values.

To add a crypto, you must manually add an account like what you'd do for home, car, or jewelry. This is good because you don't need to enter your password or link your personal wallet.

Then select your exchange and enter your coins and quantity. You can track thousands of coins across hundreds of exchanges. Personal Capital pulls from public data to track their value.

Retirement Planner

Personal Capital offers one of the most advanced retirement calculators on the market—and for free. Using your linked accounts, the platform will calculate projected income, investments, and Social Security distributions.

One of the best tools is the scenario simulator. You can manually add different life scenarios (like buying a house, paying for a wedding, traveling). The program will let you know how these will impact your retirement.

Advisory clients also have access to the Smart Withdrawal tool. This tool helps you plan an optimal account withdrawal strategy in retirement in order to reach your spending requirements.

Recession Simulator

Personal Capital's new Recession Simulator is part of the retirement planning tool.

This tool simulates past recessions, and how a similar recession could affect your retirement nest egg. It simulates how your portfolio will perform during the market crash and recovery time.

To use this, add a new scenario and select which recession to simulate. Enter at what age you'd like to start.

You'll then see a projection of how your portfolio may perform in a similar recession.

Education Planner

To combat the rising cost of college, most families need to start preparing as early as possible Personal Capital's Education Planner can help.

Use this tool to:

• Compares the costs of specific colleges
  
• Estimate how much you need to save each month
  
• Calculate the projected tax savings from a 529 plan.

The education planner also shares the average cost of in-state, out-of-state, and private universities. It always feels like it's a long time away, but you'd be surprised how fast that time goes. Start early to stay on track.

Personal Capital Cash

Personal Capital now offers a high-yield Cash Management account through its platform. You can open this account even if you don't use the Wealth Management service.

Similar to an online savings account, Personal Capital Cash offers high interest rates on your cash (even higher if you are paying for the advisory service). There are no monthly account fees or minimums.

Personal Capital's Cash account offers a few specific advantages, including:

• Unlimited withdrawals with no fees (unlike the 6 withdrawals/month limit for a bank savings account).

• FDIC insured up to $1,500,000 (instead of $250,000) at their program banks.^[4]

• Transfer between your Cash account and Personal Capital investment account.

However, Personal Capital Cash comes with some restrictions. It doesn't accept direct deposits or automatic transfers the way an online or traditional savings account would. And cash management accounts from platforms like Betterment offer higher interest rates.

Is Personal Capital Safe?

Personal Capital takes many steps to ensure that your financial data is secure, including:^[5]

• AES-256 encryption with multi-layer key management
  
• Strict internal access controls so no one at Personal Capital has access to your credentials
  
• 2-step authentication process to verify each new device you log in from
  
• Extra log-in protection in the app via Touch ID (on iPhone) or PINS (on iOS and Android).
  
• Bank and brokerage credentials stored at Yodlee (not in Personal Capital's database)
  
• Year-round third-party security audits.

Personal Capital aggregates your financial information on a read-only platform. Even if someone manages to get into your account, they can only read the information. No one can access your accounts and move your funds through Personal Capital. Not even you.

It's actually safer to view your accounts from Personal Capital. That's because you risk exposure every time you log into your bank account. But with Personal Capital, you don't enter your bank credentials each time, so they're not transmitted.

Does Personal Capital Sell Your Information

Personal Capital never sells your personal information to advertisers and companies.^[6]

However, Personal Capital does use third-party service providers (such as Yodlee) to provide their services. Your personal information is provided to those third-party service providers, on a need to know basis. These providers are required to safeguard your information and only use your data to provide their services.

For the cash account users, as Personal Capital's cash program is partnered with UMB Bank, your account information will be shared with UMB.^[7]

For the advisory clients, as Personal Capital's custodial brokerage partner is Pershing, your account information will be shared with Pershing. You will be able to have direct access and interaction with Pershing while you're a client.

Customer Service

For general customer support, you can reach Personal Capital at (855) 855-8005, 24 hours a day, 7 days a week.

All users can also contact technical support at any time from the web or mobile app.

From the webpage, just click on the "Help" button at the bottom right corner to leave a message. From the mobile app, you can submit a help ticket in the "Support Center." You can also directly submit a request here.

Advisory service clients can contact their advisors through the online dashboard when logged in. You can schedule a call or send your advisor an email.

How To Open an Account

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We think it's worth checking out. And remember, it's simple to go with the free services before jumping into paid ones. Sign-up is free and pretty simple.

1. Sign up and link accounts
   Register for a Personal Capital account and link all your external financial accounts, such as your banks, CDs, investments, etc.
   Personal Capital is linked to over 12,000 financial institutions, so you should have no problem finding your accounts. You can then use the free tools.
   

2. Free consultation
   If you decide to use the wealth management service, you need to deposit $100,000 in investable assets before scheduling a free phone consultation.

   The advisor will review your current financial state, retirement needs, risk tolerance, and any big financial plans in the future. In a second follow-up consultation, you'll get an investment strategy based on this information.

3. Open investment account
   If you choose to go ahead with it, you'll open an investment account and fund it. If you decide not to use Personal Capital's investment service, no problem. You got a free consultation and hopefully some good advice. And of course, you can continue to use the free tools.

Mobile App

The Personal Capital app is a mobile version of the desktop dashboard. You can view:

• A summary of all your accounts and your current total assets
  
• Your cash flow, income, and expenses
  
• Detailed lists of your recent transactions
  
• How you're doing on budget and a breakdown of spending
  
• Overview of your investments
  
• Chart of your portfolio performance
  
• Investment checkup advice
  
• Your projected portfolio value for retirement (including estimates based on changes)

The app doesn't have all the platform's features, including tools like bill reminders and fee analyzer. But it's a convenient way to view your financial information from anywhere.

How It Compares

There are many digital budgeting apps on the market today. So how does Personal Capital stack up against the rest?

Personal Capital vs Betterment

Betterment: Better for new investors with less capital
Personal Capital: Better for high wealthier investors

Betterment is one of the most popular robo-advisors. The annual fee for the basic service is just 0.25%^[8], so beginners may feel more comfortable with that. Plus, there is no account minimum. You can use it even if you have just $5 to invest.

However, because of the low fee, Betterment is truly just a robo-advisor. The software invests for you based on your age, goals, and risk tolerance. Beginner investors do not get any kind of real human financial advisor. So you are completely trusting a computer to design your investment portfolio.

If you have $100,000 or more, you'll upgrade to the Premium service. You get unlimited access to certified financial planners. They can provide financial guidance on your other investments outside of Betterment and on big life events.

Betterment does not have such advanced money management tools. We do like its SmartDeposit feature though, which automatically sends money to Betterment when your bank account exceeds a certain balance. This is an easy way to make sure you're investing your extra cash.

But remember, you can still use Personal Capital's tools for free. So if you're a newbie investor, you can certainly use Betterment's cheaper service plus Personal Capital's tools.

	Personal Capital	Betterment
	Benefits and Features
Annual Fee	0.89% for first $1 million, 0.79% for first $3 million, next $2 million 0.69%, next $5 million, 0.59%, and 0.49% over $10 million	0.25% for accounts under $100,000 0.40% for accounts $100,000+
Minimum Deposit	$100,000	$0
Phone Support	Yes	Yes
Live Chat Support	No	No
Email Support	Yes	Yes
Human Advisors	Yes	Yes ($100k minimum)
Robo Advisor
Assets Under Management	$23 Billion	$14 Billion
Tax Loss Harvesting	Yes	Yes
Goal Tracker	Yes	Yes
Automatic Deposits	Yes	Yes
Online Platform	Yes	Yes
iPhone App	Yes	Yes
Android App	Yes	Yes
Mobile App		Yes
Single Stock Diversification	Yes	No
Fractional Shares	No	Yes
Taxable Accounts	Yes	Yes
401k Plans	Yes	Yes
IRA Accounts	Yes	Yes
Roth IRA Accounts	Yes	Yes
SEP IRA Accounts	Yes	Yes
Trust Accounts	Yes	Yes
529 Plans	Yes	No
Human Advisors
Robo Advisor
Price
Goal Tracker
Customer Service
Budgeting
Ease of Use
Investment Tracking
Retirement Planning
Annual Fee
Minimum Deposit
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Personal Capital: Pricing information from published website as of 04/30/2020 Betterment: Pricing information from published website as of 04/04/2018

Personal Capital vs Mint

Mint: Better for budgeting
Personal Capital: Better for investment tracking and retirement planning

Mint is another popular free money management software. The platform is aimed at the regular person, rather than investors with significant capital.

Mint focuses on everyday spending and budgeting more than future income. It might be a better choice for those who just want to see their financial life all in one place.

For budgeting, Mint does the job better. Personal Capital only allows you to set a monthly spending target. But with Mint, you can break it down by category and assign a budget to each.

But Personal Capital has proven to be more dependable when it comes to interfacing with your accounts, syncing them, and calculating the data quicker.

Both platforms are strong, so it depends on what you want out of it. For budgeting, Mint is the winner. But for investment management and retirement, Personal Capital is the one for the job.

Personal Capital vs Quicken

Quicken: Better for business managers
Personal Capital: Better for everyone else

Quicken is one of the first-ever money management software (it came out in the 1980s). It provides a very comprehensive set of money management tools.

However, almost nothing from Quicken is free. You must pay an annual subscription to use it. Read our detailed comparison of Quicken vs Personal Capital for more information.

Quicken's Starter program offers barebones budgeting and expense tracking. The Deluxe program lets you set up savings goals, customize your budget, and start working to reduce debt. The premium program has services like:

• Bill pay
  
• Investment tracking
  
• Market comparisons
  
• Small business manager
  
• Property manager

For the average investor without business managing needs, Personal Capital's free tools are more than enough.

Personal Capital vs Robinhood

Robinhood: Better for DIY investors
Personal Capital: Better for hands-off investors

Robinhood is not a robo-advisor—it's a trading app. The platform offers free trades for stocks, options, and ETFs with zero commissions. But unlike with Personal Capital's hands-off approach, you'll be responsible for selecting investments and trading yourself.

Robinhood has one only account option—a taxable brokerage account. There's no account minimum, compared to Personal Capital's which has a $100,000 minimum to invest.

Its basic platform lacks research and tools, so you need to be comfortable researching yourself. If you aren't, you may be better paying a small fee to use a robo-advisor like Personal Capital.

Hear from an Expert

CreditDonkey asked Andrew MacDonald from the University of San Diego for his expert advice on what the average person should look for in a budgeting app.

Here's what he had to say:

Bottom Line

Personal Capital aims to provide excellent wealth management tools, a robo-investment platform, and human financial advisors.

You can use Personal Capital's money management tools at no cost. These are some of the most advanced tools on the market. It doesn't hurt to sign up for a free account to get a handle on your financial life.

The investment service is aimed for individuals with at least $100,000. The fees are much higher than other robo-advisors, but you do get personal service from financial advisors. If you have a lot to invest (as in millions), the fees get lower and it is a good value for the level of service.

References