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Personal Capital Review
Personal Capital is a financial advisory and wealth management company that aims to help you better manage your funds and investments. Using the company’s proprietary software, you can get a 360 degree view of all your different investments and bank accounts. The platform also offers both a mobile and desktop app that make it easy for you to track and monitor your money and net worth in real time.
- 360 degree financial view – the platform’s software and app enable you to get a comprehensive look at all your different investments and accounts.
- 4 savings tools – retirement savings calculator, recommended emergency fund calculator, debt paydown progress tracker, account level savings goals.
- Low fees – the annual wealth management fees for accounts with under $1 million is just 0.89%, with the fee decreasing as your investment increases.
- 30-day cash flow tracker – see how much money has entered and exited your account in the past 30 days so you can stick to your savings goals.
- Sales calls – if you have enough assets in your free account, you may get 1 to 2 sales calls occasionally to upsell you to the paid service.
- High minimum investment – you must have at least $100,000 to use the platform’s wealth management services, making it not suitable for beginners.
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Historical annual return varies from 8.8% to 12.4% (2019 – 9.47%)
Low annual fees: advisory – 0.15%; management fee – 0.85%
What is Personal Capital?
This company has had impressive growth and now has more than $12 billion under management.
How Does Personal Capital Work?
Personal Capital allows you to link all your financial accounts. The platform will verify your details to ensure everything is kept up to date. Once you link your accounts, you can see all your financial details in one place. You can even view in categories, such as credit cards, cash, investments and loans.
The overall aim of the platform is to help you take control of your financial life. It will bring together all your investments. You can also use the Personal Capital analytics tools to assist with your planning.
With its built in investment intelligence, you can plan for your retirement and other financial goals, getting real time updates to ensure everything remains on track.
Is Personal Capital Safe?
Personal Capital takes safety seriously. The platform uses one way encryption to protect your account information. It is not possible to perform transfers or withdrawals from your accounts using the platform. Personal Capital provides a read only service, showing your financial information.
All Personal Capital accounts have FDIC insurance of up to $250,000. All these features can answer the questions is Personal Capital legit with a resounding yes! It is a safe platform with sufficient protection to reassure you that your personal details are protected.
How Much Does Personal Capital Cost?
Personal Capital has a basic platform that is completely free of charge. This allows you to link your existing accounts to create budgets, track spending and monitor your finances.
If this is not sufficient for your needs, you can upgrade to Personal Capital Wealth Management. This has fees of up to 0.89% if your assets are under $1 million.
Personal Capital Sign Up Bonus
Personal Capital offers a $50 sign up bonus as part of its referral program. You need to sign up through a current member’s referral link and both you and your referee will receive a $50 Amazon gift card.
To qualify for your sign up bonus, you need to link at least one investment account with a balance of $1,000 or more within your first 30 days of registering.
How to Open Account with Personal Capital?
Step 1- Provide Your Personal Details
The first step of opening your account is to provide Personal Capital with some basic personal details. This includes a valid email address, phone number and date of birth.
Step 2- Advisor Call
You will now see a prompt to schedule an advisor call. Even if you only want to use the basic dashboard, you need to choose a time and date for your call.
There is no option to choose a specific advisor, but once you arrange the call, you will see a brief biography of your advisor.
Step 3- Import Your Accounts
You can now import your financial accounts. This includes your credit cards, checking accounts, savings and investments. This is necessary to generate an accurate picture of your financial situation and analyze your asset allocation.
Step 4- Open an Investment Account
The process of opening your Personal Capital investment account involves some paper applications. You will need to print out the paperwork and mail it into Personal Capital.
After you’ve spoken with your advisor, you will be able to see portfolio recommendations. This platform has 12 portfolio allocations that can be tailored to your individual needs and goals.
How to Invest with Personal Capital?
Step 1- Complete the Intake Questionnaire
The first step of making an investment with Personal Capital is to complete the intake questionnaire. This will provide the advisor team with details of your current investments to help them to develop a personal financial strategy.
Step 2- Transfer Funds
If you’re happy with the recommendations, Personal Capital will open accounts in your name via Pershing, a third party custodian. You will then need to transfer the funds into your account via the Personal Capital dashboard.
Step 3- Implementation
Personal Capital will then implement your new investment strategy. You don’t need to do anything at this stage. The Personal Capital team will monitor and rebalance your portfolio when necessary to minimize your tax bill.
Personal Capital Key Takeaways
Account Minimum Investment
To become a wealth management client, you need to have at least $100,000 in investment accounts.
If you only want to use the budgeting and monitoring features of Personal Capital, there are no account fees.
The Wealth Management plan has all inclusive fees. There are no trading commissions or hidden fees.
The fee structure works on a sliding scale.
- First $1 million- 0.89%
- Up to $3 million- 0.79%
- Next $2 million- 0.69%
- Next $5 million- 0.59%
- Over $10 million- 0.49%
Personal Capital offers baskets of ETFs and individual securities to create model portfolios.
You can use the Personal Capital Cash Flow Analyzer to follow your weekly, monthly and annual spending habits and income. This feature is available on the website and Personal Capital app.
Since Personal Capital connects to all your accounts, it can track all your expenses and help you to manage your budget. You can then set your budget to ensure you have the funds for your everyday expenses, savings and other expenses.
There is even an upcoming bills feature that creates a report of pending bills and their due dates.
Personal Capital also allows you to calculate your overall net worth. This is calculated by subtracting your debts from your assets. To accomplish this, it reviews all your accounts, highlighting any issues that could be damaging your credit.
The Personal Capital dashboard allows you to see your accounts in one place. You can view earnings and spending in a bar graph, so you can monitor your cash flow.
Personal Capital also has a savings planner that helps you to plan out your needs for emergencies, retirement, and even big ticket items. The tool also allows you to move funds directly into appropriate accounts.
The planning tools also allow the setting up of New Education Goals. You can add each of your children by birth year and name. There is also the option to indicate if you want to save for college or private school before college.
This tool also allows you to compare college costs to determine your savings goals.
The Personal Capital planners can also be used to track if you’re on target with saving for your retirement. You can access income and spending events to project the future value of your portfolio.
There is even a recession simulator, which highlights how your portfolio would have been affected by past recessions. This is a great resource if you’re concerned about how future events may impact your retirement plans.
This is a useful feature that lets you check how much your retirement plan costs you. Many people are surprised at the amount lost on a 401K to fees.
The analyzer allows you to determine the expenses of your accounts. Based on these assumptions, you can make adjustments to see what the changes will do to your fees.
Even if your fees appear small, it can add up to $500,000 lost over the next twenty, thirty or forty years.
How to Withdraw Money from Personal Capital?
There are no withdrawal limits on your Personal Capital account. The daily limit is $25,000 and you can initiate a withdrawal through your dashboard.
What are the Personal Capital Pros & Cons?
- Complete Financial View: Personal Capital is an easy to use service with a 360º view of your finances.
- App Support: There is an app that offers similar functionality to the desktop edition, allowing you to use Personal Capital on the go.
- Great Ease of Use: The setup process is simple and there is an intuitive layout to both the navigation and reporting.
- All Inclusive Management Fees: The paid service fee includes everything for managing your account with no hidden fees or transaction charges.
- Asset Models Are Not Customizable: The asset allocation models are predetermined. This may be adequate for most users, but not if you need a more tailored solution.
- No Statement Reconciliation: Although you can monitor your income and expenses, it is not possible to reconcile your bank statements.
- High Wealth Management Minimum: To become a Wealth Management client, you need a minimum of $100,000 in investment assets.
- Sales Calls: Even if you just want to use the free tool, you need to participate in an advisor call.
Is Personal Capital Worth it?
It’s worth using the Personal finance free version to have a full picture of your personal finances.
On the other hand, if you have over $100.000 to invest, you can gain access to dedicated financial advisors and grow your net worth.
Personal Capital Alternatives
Personal Capital vs Facet Wealth
Facet Wealth offers financial planning services with investment planning and customized financial guidance.
The fees are $1,200+ per year increasing according to the level of services you require.
The other major difference between Personal Capital and Facet Wealth is there is no minimum investment.
Personal Capital vs Robinhood
While Personal Capital is an online robo advisor service, Robinhood is more like a traditional stock broker. This makes Robinhood more suited to investors who have the confidence to make their own investment decisions. There is zero commission for both entry and exit trades.
Personal Capital vs Betterment
Although they may appear similar, Betterment is a pure robo advisor. While Personal Capital acts like a robo advisor, it also offers a full financial advice service.
Unlike Betterment, Personal Capital can provide advice on your complete financial situation. However, this more traditional financial advisory service does come at a cost. Betterment charges far lower fees at 0.25% for up to $100,000, then 0.40%.
Personal Capital FAQ
Is Personal Capital really free?
The basic service is free, but if you want to use the wealth management service, fees do apply.
Is Personal Capital a good investment?
If you need advice for all aspects of your finances, Personal Capital could be a good choice for you.
How secure is Personal Capital
There is one way encryption and FDIC insurance of up to $250,000