Personal Capital Review: Is It Worth It?

WHAT IS PERSONAL CAPITAL?

Personal Capital is an all-in-one financial toolkit. It offers both a free and paid service:

Free: Advanced financial tools
You can access the platform's robust money management tools without signing up for the advisory service. Link your accounts to get a snapshot of your financial life all in one place, including:

• Net worth
  
• Credit card, mortgage and other types of debt
  
• Spending analysis
  
• Retirement planners
  
• Portfolio performance

Paid: Wealth management services
Personal Capital offers robo-investing coupled with human financial advisors. The annual fee is 0.89% and requires a $100,000 minimum investment.

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

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Learn more about the Personal Capital Difference
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IS PERSONAL CAPITAL WORTH IT?

Whether you're interested in the free personal finance tools or the paid robo-investing service, Personal Capital can help you achieve your goals.

Free Financial Tools
Apps like Mint have similar tools, including spending analysis. But Personal Capital's free money management tools are some of the best in the industry.

The investment checkup and fee analysis tools go above and beyond standard financial tools by offering free advice to help you better track and save your funds.

Wealth Management Service
While the annual fee is higher than competitor robo-advisors, Personal Capital's offering comes with human oversight. Financial advisors help you make the best choices based on your goals, which may yield better results. And the fee is still less than that of traditional wealth managers. That means you get the benefit of hands-off investing at less cost.

IS PERSONAL CAPITAL SAFE?

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Personal Capital takes several steps to ensure that your financial data is secure, including:

• 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 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.

Remember—personal responsibility is also important. For maximum security, be sure to sign out of any financial-oriented program you use after every session.

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

FREE FINANCIAL 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.

PROS:

• Free and easy to setup
  
• Advanced money management tools including retirement planner and investment tracking
  
• A snapshot of your entire financial profile

CONS:

• Limited budgeting tool

DASHBOARD

After linking your accounts, you'll see a dashboard like this:

Use it to review summaries of:

• Your total net worth (including assets and liabilities)
  
• A balance of all your accounts (cash, investments, credit card, and loans)
  
• Your cash flow for the past 30 days (income and expenses)
  
• How much investable cash you have just sitting around
  
• How you're doing on budget this month
  
• Your retirement savings goal for the year

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 the ways you spend your money each month.

The graph compares the current and previous month to track your progress. 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.

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 track 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. 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 based on your ever-changing financial situation—you'll even get a weekly update.

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 people 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, 7% of the earnings are being lost to fees. The number at the bottom projects costs based on current contributions and savings goals. About $40k will be spent on fees by the time the user reaches retirement age.

Personal Capital also shares the expense ratio for each fund. 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 investment portfolio, which may include:

• Individual 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.

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.

Based on this snapshot, retirement money will run out around age 80. It also shows that the projected monthly retirement falls short of the goal.

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.

Say you want to buy a house sometime in the next few years.

After you've entered the data, the tool recalculates the retirement graph. You can see how the projected portfolio value changes.

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.

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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 real human financial advisors.

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 customized plan.

PROS:

• Automated investment management combined with human advisors
  
• Helpful tax optimization strategies
  
• Robust features for Private Client tier investors

Cons:

• High fees compared to other robo-advisor platorms
  
• $100,000 minimum investment rules out many investors

3 LEVELS OF SERVICE

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

$100,000—$200,000: Investment Service

• Access to a financial advisory team
  
• Tax-efficient ETF portfolio
  
• Tactical weighting
  
• 401(k) advice
  
• 24/7 call-in access

$200,000—$1 million: Wealth Management Service
Everything mentioned above PLUS:

• Two dedicated financial advisors and regular portfolio reviews
  
• Customizable portfolio including with access to individual stocks
  
• A full financial and retirement plan
  
• College savings and 529 planning
  
• Tax loss harvesting
  
• Financial decisions support

Over $1 million: Private Client

• Two dedicated financial advisors and regular portfolio reviews
  
• A full financial and retirement plan
  
• College savings and 529 planning
  
• Priority access to specialist
  
• Customized portfolio with ETFs and individual stocks and bonds
  
• Private banking
  
• Private equity and hedge fund investment reviews
  
• Deferred compensation plan advice
  
• Estate attorney / CPA collaboration

How Wealth Management Works

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

• Ways to build a tax-efficient portfolio
  
• Budgeting and cash flow
  
• 401k and retirement account information

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 to your portfolio as needed.

Asset Allocation

Personal Capital invests your funds in portfolios based on goals and risk profile. Depending on your service level tier, these may be comprised of:

• ETFs containing stocks, bonds, real estate trusts, and other assets
  
• Customizable portfolios that include individual stocks

Your asset allocation could be more aggressive, with a portfolio heavy on stocks. Or based on your plan, Personal Capital's software could select a more balanced portfolio with equal parts stocks and bonds.

In every case, the goal is to maximize your return on investment while staying true to your investing plans. Keep reading to learn more.

Get Started with Personal Capital
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PORTFOLIO MANAGEMENT FEATURES

Personal Capital's goal is to yield the highest returns with the least risk. Here are some of the tools it provides:

• Dynamic portfolio allocation
  Personal Capital uses your entire financial picture to set your portfolio allocation. A financial advisor works with you to identity the best strategy for your goals.

• Diversified portfolio
  Like most robo-advisors, Personal Capital invests in 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. Alternative investments such as real estate investment trusts, precious metals, and energy
     
  6. Cash

• Automatic rebalancing
  Your allocations may drift over time since stocks and bonds grow at different rates. Let's say you wanted 50% stocks, but after a while, your assets are now 60% stocks. Personal Capital will automatically adjust your portfolio.

• 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 can mean better diversification with less risk and higher return potential.

• Tax loss harvesting
  This feature is available to clients with over $200,000 invested. It means some assets may be sold from your portfolio (usually at year's end) for a loss. They then earn tax deductions that can offset your capital gains.

  Personal Capital's tax optimization also places high-yield stocks into accounts with tax breaks (like IRAs). This is a powerful feature for people with multiple investments.

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

FEES

Personal Capital's wealth management service is aimed toward high-net-worth investors. The minimum required is $100,000.

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

• Up to $1 million: 0.89%
  
• $1—$3 million: 0.79%
  
• $3—$5 million: 0.69%
  
• $5—$10 million: 0.59%
  
• Over $10 million: 0.49%

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.

Get Started with Personal Capital
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Personal Capital Cash

Personal Capital now offers a high-yield Cash Management account through its platform. Similar to an online savings account, Personal Capital Cash offers high interest rates (even higher if you are paying for the Wealth Management feature.)

It offers:

• No monthly account fees or minimums
  
• Unlimited deposits and transfers
  
• High than average FDIC protection

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.

HOW TO Open an Account

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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 financial 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.

Sign Up Now. It's Free
Click Here to Sign Up

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 net worth
  
• 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 mobile 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

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There are many digital financial tools 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%, 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. Low-net-worth 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 financial 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
Robo Advisor
Assets Under Management	$6.5 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
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
Annual Fee
Minimum Deposit
Human Advisors
Customer Service
Personal Capital: Pricing information from published website as of 04/04/2018 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 financial tools. However, almost nothing from Quicken is free. You must pay an annual subscription to use it.

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 tools 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.

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 the free account to get a handle on your financial life.

The investment service is aimed at high-net-worth investors. 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.