Personal Capital takes a traditional approach to financial planning and uses technology to enhance the user experience. If you have great enough investable assets, Personal Capital will also manage your portfolio and provide financial planning professionals to help guide you. If you don’t meet the $100,000 asset minimum, you can still use the free tools offered by Personal Capital.
Personal Capital takes a traditional financial planning approach and uses technology to enhance the user experience. If you have enough assets, Personal Capital will manage your portfolio and provide financial planning professionals to help guide you. If you don’t meet the $100,000 asset minimum, then you can use the free tools offered by Personal Capital.
Personal Capital is an ideal platform for someone who needs a financial planner. The account minimum at $100,000 makes this platform slightly more selective than other robo-advisors. An investor who would like help creating a financial plan, planning for retirement, and needs investment management would be the ideal client for personal capital.
Fees: 0.49% - 0.89% Management Fee
Account Minimum: $100,000
Personal Capital Cash: 1.55% APY
Access to dedicated financial advisors
Unlike a lot of platforms out there, Personal Capital is much more than just a robo-advisor. Personal Capital is closer on the spectrum to a holistic asset manager. The service strives to offer support for all parts of your financial life.
Originally founded in 2009, the company now manages over $17 billion in assets and serves 2.9 million customers. That makes it one of the largest providers on the market today.
Personal Capital has capabilities ranging from banking and investing to planning and advice from real human financial planners. Having all of your finances under one roof can make things simple and easy to manage.
On top of that, the platform has a wealth of features that further improve ease of use and efficiency.
Personal Capital’s biggest strength is the technology they leverage on its platform. Investors can use a variety of tools and check their personal financial situation at a glance. Personal Capital has an easy-to-use dashboard displaying all the features available to users.
Personal Capital uses a variety of strategies and techniques to lower your tax burden. There are a few main strategies they use in their tax optimization.
Personal Capital is unique compared to other robo-advisors as they offer human financial advisor support. Financial advisors are available 24/7 by phone, email, or webchat. Investors will have a dedicated financial advisor which will help you make a variety of financial decisions. Retirement planning, college, savings, and insurance planning are just a few of the services provided by Personal Capital financial planners.
Many robo-advisors are beginning to offer cash accounts, where their users can gain access to higher interest rates compared to traditional bank accounts. Currently, the Personal Capital Cash account offers a 0.05% APY. Despite this lower interest rate, the Personal Capital Cash account is FDIC insured and has no minimum balance and unlimited withdrawals.
Personal capital offers a variety of free tools even if you are not a client. All you have to do is create an account and you can begin using free financial planning tools. In our experience, these tools beat other free platforms such as mint.
401(k) fee analyzer - Personal Capital will analyze your 401(K) for high fees and give you an idea of how these fees impact your retirement savings.
Spending Tacker - Once you link your accounts, Personal Capital will track your cash flow and see where you are spending the most. You can keep track of categories such as spending on groceries, gas, utilities, etc.
Net Worth Overview - You can track your assets and liabilities with Personal Capital’s net worth tracker. This will allow you to see your entire financial life in one snapshot.
Asset allocation and Risk Analysis - Personal Capital will analyze your current asset allocation and determine how much risk you are taking with your investments.
Retirement Planner - By using a set of metrics such as time horizon, spending, and investment return, Personal Capital’s retirement planner will tell you if you are on track for retirement.
Personal Capital financial planners will help clients with a variety of questions surrounding their financial life. This includes guidance in areas such as:
Personal Capital has relatively high asset management fees compared to other robo-advisors we review. The account minimum used to be $25,000 for Personal Capital but was raised to $100,000. This could indicate that the service investors were receiving was worth more than the fees they were paying. Personal Capital fees align closely with traditional financial advisors.
Personal Capital has tiers for your investments and fees based on your account value.
First $1 million: 0.89%
$1 million to $3 million: 0.79%
$3 million to $5 million: 0.69%
$5 million to $10 million: 0.59%
$10 million and up: 0.49%
By using a questionnaire to determine your life goals, time horizon, and personal preferences Personal Capital will determine the appropriate risk tolerance for your investments.
Personal Capital uses Modern Portfolio Theory (MPT) to determine your investments. MPT has a focus on asset correlation rather than individual securities themselves. A group of uncorrelated assets can be used to reduce overall portfolio risk.
Furthermore, uses mostly Exchange Traded Funds (ETFs) to build their portfolios. They spread risk across 6 predetermined asset classes: U.S. stocks, U.S. bonds, international stocks, international bonds, alternative investments (commodities), and cash.
Individual stocks and bonds are also used to improve tax efficiency and diversification. Personal Capital keeps track of 70 to 100 individual U.S. stocks they believe are good investments at any one time. However, these strategies are for investors with higher account minimums.
Plus, takes into account your asset allocation in the accounts they are not managing. This way the recommended asset allocation truly fits the investor's overall objective.
$100k to $200k - You will be invested in a portfolio of ETFs, designed to be tax efficient. Smart-beta strategy
$200k to $1 Million - All benefits above, including the functionality of customizing your portfolio with ETFs and individual stocks
$1 Million and Up - Everything above, plus the ability to invest in individual bonds.
*The average fund expense ratios on Personal Capital are relatively low at 0.08%.