Personal Capital Review 2021 – A Money Management Tool

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Last updated on August 9, 2022

Personal Capital is an online financial advisor and personal wealth management company that provides investing guidance via its unique combination of human financial advisors and robo-advisor algorithms.

Personal Capital’s personal approach to investing—with a heavy technological influence—has allowed it to move to the top of the industry. However, there are some details to keep in mind as you consider if it’s right for you:

  • Investing with Personal Capital requires a minimum balance of $100,000 (no minimum for a cash account)
  • Personal Capital charges an 0.89% account management fee, with discounts available for larger balances
  • In exchange for this fee, users gain access to unlimited advice and retirement planning from licensed financial advisors and a professionally managed ETF portfolio
  • Access to the financial tools is free and with no obligation

While that should give you something to think about for now, there’s a lot more you need to know. Let’s continue!

Who is Personal Capital Best For?

As the best robo-advisor for portfolio management, it’s natural to assume that Personal Capital is perfect for you, your money, and your financial goals—and you may be right.

However, there are some people who benefit more than others, including:

  • High net-worth investors
  • Investors seeking assistance with tax optimization
  • Hands-off investors
  • Investors who want access to both a robo-advisor and a human financial advisor

The minimum balance of $100,000 required for investing gives you a better idea of what you need to get started.

How Personal Capital Works

Perhaps the biggest benefit of Personal Capital is the ability to customize the experience to match your every want and need.

The service is easy to use, as you’re walked through the process upon signing up for an account.

Here’s what you can expect:

  • Account setup: After providing basic information, such as your name and email address, you’re required to schedule a call with a personal advisor. Even if you aren’t interested in this call, you’re still required to schedule it. Of course, you can always cancel at a later date.
  • Import your financial accounts: Also during the setup process, you’re prompted to import your financial accounts. This includes but is not always limited to investment accounts, bank accounts, and credit cards.
  • Review the available portfolio allocations: There are 12 portfolio allocations to choose from, along with a nearly unlimited number of variations based on the approach you take. With the help of your investment advisor, you can confidently choose the right one.

Note: you don’t have to open an investment account to use Personal Capital. You can open a Personal Capital Cash account to get started. If you like what you see and you’re eligible, you can then open an investment account. 

Features

Personal Capital is full of high-level features that are sure to give you peace of mind when investing and managing your money.

The best way to understand the many features of Personal Capital is to experiment on your own, but that won’t stop us from sharing some of our favorites.

Before we get into specific features, let’s talk about dedicated financial advisors.

There’s no better feeling than knowing that you have a financial advisor working on your behalf. With a balance of $200,000 or more, you gain access to two financial advisors who are available to answer questions, provide guidance, and help you make key decisions.

Should you have less than $200,000, you still have access to a team of advisors—they’re just not dedicated.

Fee Analyzer

This is one of those features you don’t know you need until you have access to it.

Personal Capital’s fee analyzer reviews your allocations and fees and suggests alternatives that can save you money. Just the same, you’ll find new opportunities for diversification.

The fee analyzer feature is an industry leader.

Net Worth Report

If tracking your net worth is important to you—and it should be—Personal Capital has you covered.

With the net worth report, your balances, investment holdings, and cash flow are included in an easy-to-understand dashboard.

Additionally, Personal Capital integrates seamlessly with Zillow, allowing you to track the value of your home and investment properties.

Budgeting

No matter how much money you have, a budget is critical to both your short and long-term success.

Personal Capital makes it easy to create a budget, set spending targets, and view your progress throughout the month.

Rather than use a manual method of budgeting that requires investing significant time and effort, such as an Excel spreadsheet, Personal Capital has you covered.

Investment Tracking

As your investments grow, it becomes increasingly difficult to track them. But not if you have the power of Personal Capital at your side.

Personal Capital investment tracking is designed to give you a clear overview of all your investments, including everything from the total value to the percentage of your portfolio.

Along with the above, the Personal Capital investment management app allows you to manage your investment from anywhere in the world. This is a perfect example of “money management convenience.”

Personal Capital Fees

Any time you bring a professional financial advisor into the mix, you can expect to pay a fee. And that’s no different with Personal Capital.

On the plus side, managing your investments with a local financial advisor would cost much more than with Personal Capital. However, you must still take the cost into consideration.

If you have less than $1 million in your investment account, you’ll pay 0.89% of assets managed.

When your investments reach more than $1 million, you move into the “private client” tier. Fees are lower here, starting at 0.79% and reaching as low as 0.49%.

Compare Personal Capital’s fees to other online financial advisors and local professionals. This will give you a clear idea of how they stack up.

Note: even though you pay a fee for using Personal Capital, don’t forget that you receive a lot in return. In addition to access to advisors, there are also many tools to guide you. 

How to Sign Up with Personal Capital

We touched on this briefly above, but it’s worth outlining the basic steps.

Personal Capital makes it easy to get up and running. Here’s what you need to do:

  • Create a new account
  • Connect your financial accounts
  • Schedule a call with an investment advisor (unless you’re using the cash account only)
  • View your current net worth and cash flow
  • Set up a monthly budget
  • Review your investments
  • Use the retirement planning tool
  • View recommendations

There are finer details within each step, but that should give you a clear idea of what to expect. It shouldn’t take you long to make your way through the process.

Pros and Cons

There’s a lot to like about Personal Capital, as well as a few potential pitfalls to keep in mind. You need to be honest with yourself as you compare the pros and cons. Doing so allows you to make a decision you’ll be happy with over the long run.

Pros

  • Access to dedicated financial advisors
  • Free cash account
  • Availability of individual securities
  • Access to high-level investing and money management tools

Cons

  • $100,000 minimum for investment accounts
  • High management fee

Your job is to define what’s important to you and what’s not. That’ll allow you to make the most of these pros and cons.

Alternatives to Personal Capital

Although Personal Capital is a leading personal wealth management company, it’s not alone. There are many other companies providing similar services, with these among the most popular:

You can never be too cautious when it comes to your money, so make sure you compare the pros, cons, and finer details of all these Personal Capital alternatives.

While doing so, here are some of the many questions you can ask yourself:

  • Which features are most important to you in an online financial advisor?
  • Which companies have the highest fees? The lowest fees?
  • Which tools do you want and need access to?
  • Are you married to the idea of being able to consult with a dedicated financial advisor?
  • Is now the right time to seek help with your personal financial management?
  • What are the qualifications of the financial advisors?
  • What type of customer service is available?
  • Is the company’s technology known for being reliable?
  • What are the specific pros and cons of each company’s app? Do they all have one that works on your operating system?

These questions, among others, will help you compare the services above to Personal Capital, based on your specific circumstances.

Bottom Line: Is Personal Capital Right For You?

With all the information in this Personal Capital review guiding you, it’s time to answer the million-dollar question: is this company right for you at the present time?

As one of the leading online financial advisors, you can’t go wrong with Personal Capital. It’s easy to use, packed full of features, and affordable when considering what you get in return.

If you’re ready to learn more, download the Personal Capital app, poke around, and decide what to do next. You may soon find that it’s perfect for all your investment needs.

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