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
  
• Spending analysis
  
• Retirement planners
  
• Portfolio performance

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

It 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 Personal Capital Difference
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PERSONAL CAPITAL PROS & CONS

PROS:

• Easy setup
  
• Free robust money management tools for everyone
  
• See your entire financial picture in one place
  
• Advanced retirement planner
  
• Portfolio performance tracker showing how you compare to the market
  
• Automated investing combined with real human advisors
  
• User-friendly mobile app

CONS:

• Higher fees than competitor robo-advisors
  
• $100,000 minimum; aimed at the affluent
  
• Budgeting tool not as advanced

IS PERSONAL CAPITAL WORTH IT?

Whether you're interested in the free financial planning tools or the paid robo-investing service, the answer is YES.

Free Financial Tools
Apps like Mint offers 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 personalized advice.

Paid Wealth Management Service
While the annual fee is higher than competitor robo-advisors, Personal Capital's service includes real human oversight. Financial advisors help you make the best choices for your goals.

This means you get a more personalized plan, which could yield better results. And the fee is still less than that of traditional wealth managers. So 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 means 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 are stored at Yodlee (not in Personal Capital's database).
  
• Year-round 3rd party security audits.

Remember - personal responsibility is also important. Always make sure you sign out of any financial-oriented program you use.

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

FREE FINANCIAL TOOLS

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

Now we'll go over some of the features.

DASHBOARD

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

Use this dashboard to review summaries of:

• Your total net worth (including assets and liabilities)
  
• A balance of all your accounts (cash, investments, credit, and loans)
  
• Your cash flow for the past 30 days (income and expenses)
  
• How much invest-able 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 using your linked accounts. You'll get a quick snapshot of the ways you spend your income each month.

A graph compares the current and previous month to give you a sense of your progress. The income and expenses tabs offer more detailed. They also display your average monthly income and expenses.

Transactions Tracker

Do you know where your money goes each month? Personal Capital tracks your transactions and displays the activity on each account.

Sort your transactions by:

• Cash
  
• Investments
  
• Credit
  
• Loan
  
• Mortgage.

You can also filter your activity for a specific time period. This makes it so easy to get an overall picture of your finances, rather than analyzing individual accounts.

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

Budgeting

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

Keep in mind: the budgeting feature is very simple. You can't assign a budget to each spending category or set other features. This tool may seem a little lacking, 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'll update the figure based on your ever-changing financial situation. You'll even get a weekly update of your current net worth.

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 current 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. You probably don't know the hidden fees within your fund. This tool tells you just how much is being lost 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 current investment strategy. Based on your goals and risk tolerance, Personal Capital may suggest you change your allocation (like more bonds and fewer stocks).

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

This is one of the most advanced retirement calculators out there. Based on your linked accounts, Personal Capital will calculate projected income, investments, and Social Security distributions.

According to this plan, retirement money will run out around age 80. It also shows me that the projected monthly retirement income falls short of the goal.

One of the best features 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.

Let's say you plan 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

This tool compares the costs of specific colleges, tells you how much you need to save each month, and calculates the projected tax savings from a 529 plan. It also shares the average cost of in-state, out-of-state, and private universities.

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WEALTH MANAGEMENT SERVICE

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Personal Capital offers investment advisory services for those with $100,000 to invest.

The company acts like a hybrid of robo-investing and real human management. Much of the tasks are automated, but a committee of advisors and researchers provide guidance.

They take the time to understand your current situation and goals to design a customized strategy. Read on to learn more.

3 LEVELS OF SERVICE

The level of service you get depends on your balance. Here is what you get at different balance levels:

$100,000 - $200,000: Investment Service

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

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

• 2 dedicated financial advisors
  
• Customizable stocks and ETFs
  
• A full financial and retirement plan
  
• College savings and 529 planning
  
• Tax loss harvesting
  
• Financial decisions support

Over $1 million: Private Client
All of the above PLUS:

• Priority access to advisors
  
• Customized portfolio with ETFs and individual stocks and bonds
  
• Private banking services
  
• Private equity and hedge fund investment reviews
  
• Deferred compensation strategy advice
  
• Estate attorney / CPA collaboration

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 features 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 optimal 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 with 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.

  When this happens, your portfolio may no longer be at the correct risk level for your goals. Personal Capital automatically rebalances your portfolio whenever it identifies an issue.

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

  This can offer higher diversification with less risk and higher return potential.

• Tax loss harvesting
  This is available to clients with over $200,000 invested. This strategy takes tax deductions on your losses to offset your capital gains.

  It'll automatically place high-yield stocks into accounts with tax breaks (like IRAs). This is a powerful feature for people with multiple investment accounts.

• 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 money management tools are free while its wealth management service is aimed toward high-net-worth investors. The minimum required for investment services is $100,000.

But the more you have to invest, the lower the fees. The annual fee 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 fees. The fees are higher than competitors (like Betterment), but you do get real financial advisors to help design a custom strategy.

Get Started with Personal Capital
Click Here to Sign Up

HOW TO GET STARTED

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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 first need to deposit $100,000 in investable assets. Then you can schedule a free phone consultation.

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

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 on to use the free tools.

Sign Up Now. It's Free
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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 investment accounts
  
• Chart of your portfolio performance
  
• Investment Checkup advice
  
• Your projected portfolio value for retirement, and enter new goals to see how they affect that

The app doesn't offer some features, 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 against the rest?

PERSONAL CAPITAL VS. BETTERMENT

Betterment: Better for new investors with less capital
Personal Capital: Better for high net worth 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 strategy.

If you have a balance of $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 high-net-worth investors.

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 planning, 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 a plan to reduce debt. The more premium programs offer features 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. ROBIN HOOD

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

Rohinhood 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 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 offers $100,000 minimum to invest.

Its basic platform lacks in research and tools, so you need to be comfortable researching yourself. If you aren't, it may be worth 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 real 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 personalized 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.