Personal Capital vs Fidelity (& Fidelity Go)
When it comes to investing your money, there are countless brokerages and advisors to choose from today.
Fidelity is an old school brokerage dating back to 1946 that has been serving customers for over half a century.
The company offers different tools, research and resources to help the average Joe investor to make strategic decisions when investing. Fidelity offers a $0 commission for trades to the investors.
More than 3,700 mutual funds are carrying a non-transaction fee. The brokerage is one of the companies that have high-class research tools to help the average, buy-and-hold investors.
Fidelity has a track record for managing investment with years of experience in the industry. It also has a platform that is easy to use and can be customized to help advanced investors make the most of their investment strategies.
Personal Capital is a newcomer on the block, which came on the scene in 2009.
They provide access to financial advisors for the exchange of a management fee of 0.89% and above, and investment balance starts from $100,000.
While the fee that Personal Capital charges may be high, there are robust free tools to use.
Clients can access a team of advisors that help them with making financial planning decisions. Those who have $200,000 and above can get at least two dedicated advisors.
The fee depends on the balance you have, for instance, the first $1 million is charged a 0.89 percent fee while a balance up to $3 million attracts a fee of 0.79 percent.
In this article, we look at Personal Capital vs Fidelity to compare the two investment services. We will review the investing, financial planning, and the many other tools they offer.
- You have access to free financial planning tools with Personal Capital
- Fidelity offers Zero-expense ratio index funds
- You have access to financial planners with Personal Capital
- Fidelity offers commission-free stock, option, and ETF trading
- Personal Capital account minimum for investment management is $100,000
- Fidelity offers a robo-advisor called Fidelity Go, with $0 minimum balance and 0.35% annual management fee
- Personal Capital has a higher fee that starts from 0.89% but offers access to financial planners
- Fidelity offers over 3,700 no transaction fee mutual funds
- Personal Capital offers investment management and portfolio construction, meaning they pick the individual securities (stocks, bonds, ETFs) in your portfolio
- Fidelity offers a variety of services but truly caters to the DIY investor and those who would like to pick individual stocks or funds.
- Extensive and free research as well as data with Fidelity
- Access on iOS and Android for both Personal Capital and Fidelity
- Fidelity offers investments in mutual funds, options, bonds, stocks, ETFs, and cash managed accounts
- No account fees – closing, inactivity, transfer, or annual fees with Fidelity
What Is Personal Capital?
Personal Capital is a company that offers online financial advisory and combines the power of robo-advisor algorithms with the expertise of human advisors to help make wise investment decisions.
Personal Capital requires a minimum investment of $100,000 and you will get access to a team of financial advisors.
For the next tier you must have an account balance of no less than $200,000 to have two dedicated financial advisors assigned to you.
Personal Capital comes with a fee, which is considered higher compared to peers. The fee starts from 0.89 percent and goes down as the account balances increase. The largest account balance, which is more than $10 million, is charged a fee of 0.49 percent.
The fees that Personal Capital charges come with a set of financial as well as investment planning tools.
However, Personal Capital has numerous free investing tools available here!
Also, Personal Capital gives you the ability to link your existing accounts and be able to track spending, portfolio performance, net worth, retirement progress, and the accruing fees or the fees charged.
The retirement paycheck feature also helps investors plan their withdrawals when they retire, including tax-optimized withdrawal strategies. This way you can make the most of your money and pay less taxes over time.
How Does Personal Capital Work?
The signup is pretty fast, and you will provide information including address, name, telephone, email, social security number, date of birth, and other details.
When you are done with the registration, you link your bank account so you can make a deposit into your account.
Personal Capital also allows you to link your other financial accounts, including loans, mortgages, 401(k)s, IRAs, checking accounts, savings account, credit cards, and others. This allows you to view your net worth and have a holistic view of your financial situation. Here, you can begin tracking progress and create a budget for retirement.
You track your investment using the dashboard features. Also, you start talking to an advisor to start planning with transparent, honest advice.
The Personal Capital advisors go over your investing strategies, spending habits, net worth, or even life events. The financial advisor will go over your goals and come up with a comprehensive strategy.
Personal Capital Features
Clients who have $100,000 to $200,000 in assets are invested in a portfolio of exchange-traded funds. These traded funds attract a weighted-average-expense-ratio of 0.08 percent. These funds are also designed to provide efficiency in tax planning.
At the same time, clients who have an asset value of $200,000 to $1 million enjoy the above benefits as well as the ability to tailor a portfolio that features ETFs and stocks.
Moreover, investors who have assets worth $1 million and above receive all the said services in addition to being able to invest within individual bonds.
Personal Capital utilizes a personalized approach in selecting a portfolio for the investors. This approach takes a holistic view when it comes to the client’s financial picture. So it doesn’t just consider the assets it manages. The selection process for the portfolio allows the investors to invest equally in the entire sectors instead of mimicking indexes such as the S&P 500.
Through the Smart Weighting process in portfolio selection, the company can reduce risks in investments while also optimizing returns.
With hypothetical backtests, the Personal Capital is able to see how it performs against the S&P 500, where often it outperforms this index. The hypothesis of backtesting also allows Personal Capital to find individual tax-loss harvesting opportunities.
Financial Planning Tools
Personal Capital offers different comprehensive free tools such as investment checkup, spending tracker, and 401(k) fee analyzer. However, you need to create an account so that you can utilize these tools.
Non-investors can still access these tools. When you have signed in, you can connect your bank account, credit card and brokerage accounts.
The company will analyze the allocation of assets in your investment account, depending on the information that it garners. This way, it can tell you exactly the amount you should increase and the amount you should decrease in your holdings of particular asset classes so that it aligns with its recommended target.
- Traditional IRA
- Roth IRA
- SEP IRAs
Personal Capital also supports cash accounts, which are similar to regular brokerage accounts.
While Personal Capital advises on 401(k) as well as the 529 plan allocations, it does not directly involve itself in the management of these accounts.
Personal Capital utilizes a tax-loss harvesting strategy for portfolios holding ETFs and individual stocks.
The retirement paycheck feature helps to recommend tax-optimized retirement withdrawal strategies. This helps investors make the best decisions when it comes to distribution strategies.
Personal Capital Pros
- Free financial planning tools (even for non-investors)
- Access to human financial planners
- Complete investment management
- Easy to set up with a step-by-step process
- Marrying human advise with robo-advisor algorithms
- Intuitive design and interface for easy use
Personal Capital Cons
- High minimum for Wealth Management at $100,000
- Limited budgeting capabilities
- Fees start at 0.89% which is higher than other offerings
What Is Fidelity?
Fidelity is a brokerage investment company founded in 1946, one of the oldest brokerage companies in the industry. The company is always investing in technology and research to help provide a concrete platform for the average investor.
It commits itself to reduce investment costs among investors. Fidelity is one of the only brokers that offers zero-expense ratio index mutual funds.
As an average investor, you can take advantage of the 16 base currencies it offers - one of the brokers with a wide range of base currencies.
Opening an account with Fidelity can take you about 1 to 3 days. If you are still undecided as to whether you should join Fidelity or not, you can consider the demo account to help you test the features of the platform.
While Fidelity supports the use of credit cards, including the Fidelity Debit Card, the company also allows other methods of funds transfer, including automatic deposits from the bank, direct deposit, and bank transfers.
Fidelity allows you to invest in both international and domestic stocks. There are over 30,000 different kinds of investment-grade bonds as well as fixed-income securities that you can purchase.
How Does Fidelity Work?
When you want to invest with Fidelity, you are required to open an account.
During the time of opening, you will be asked to fill in personal information that includes your address, name, phone number, email, social security number, date of birth, and other details.
After your account is opened, you choose the preferences and the features you want. For example, you can prefer to receive your financial documents in an electronic format.
After you review and accept the terms and conditions, you can transfer money to your account. However, you can still use the demo version if you just want to take the platform for a test drive first.
Commission-Free Stock Trades
With Fidelity, you can invest in online ETFs and stocks that cost an investor $0.
However, if you will opt for broker-assisted trades, you will pay $32.95. There is no limit to your entire trade size or the pricing. If you trade stocks valued under $1, you will not incur extra fees.
Fidelity has no minimum account balance to trade in a cash account.
An investor should have $2,500 in order to be able to trade certain mutual funds, however, opening an account doesn’t require you to have a minimum deposit.
For margin trading, an investor needs to have a minimum deposit to the tune of $5,000.
Trading an options contract costs you $0.65. And for assignments or any exercise, it is going to cost you $0. Fidelity is among the brokerages where you can trade different options.
As an investor with Fidelity, you have access to an excess of 13,000 varieties of mutual funds along with 3,700 mutual funds that don’t attract transactional fees (NFTs).
That said, if your fund manages to sell within 60 days after purchase, you would be charged a redemption fee amounting to $49.95. Typically, funds trades cost $0 for sale and $49.95 for a buy trade.
The trades you execute via a broker are pretty costly and will cost you almost 75 percent of your principal amount. A minimum balance of $100 to $250 is needed for broker-assisted trades.
Using the FullView tool in the platform allows an investor to pull other accounts that are not within the Fidelity platform to allow for analysis. The investor can check the other accounts, analyze them, and see their stand in terms of assets and liquidity. You can also give access to the FullView analysis to your financial or investment advisor.
Lastly, Fidelity recently launched a robo-advisor called Fidelity Go.
You simply answer a few questions about your investment strategy, goals and risk tolerance. Then, the Fidelity Go team will decide what your asset mix should be. After that, you just regularly contribute to this account and let the team handle the rest.
The minimum balance is $0 and the annual asset management fee is 0.35% which is reasonable.
Your money will be invested in a variety of mutual funds. The strategy will be based on your goals and risk tolerance as well as age and other factors. However, it is important to understand this does not come with access to an advisor you can communicate with directly.
- Zero Expense-ratio index funds
- Commission-free stocks, options, and ETFs
- Asset screeners
- Solid research tools
- Strong customer support
- Both international and local stocks traded
- Uninvested money swept back to the market fund
- Fidelity Go offers portfolio guidance for 0.35% fee
- Not eligible for non-US residents
- No commodities or options on futures
- High broker-assisted fees
- Relatively high account financing rates
- High mutual fund fees
Wrap Up: Personal Capital vs Fidelity
Looking at Fidelity and Personal Capital, you may find that they have many differences. Fidelity is designed for the average Joe, do-it-yourself investor. It has low minimum balance requirements and low fees. Fidelity has extensive tools and research information available to investors.
Personal Capital is a high-end investment platform where investors need to have a minimum of $100,000 to invest in their professionally managed portfolio.
However, with Personal Capital, as the name suggests, you can access human advisors that help you in your investment management and financial planning.
Fidelity Go offers a robo-advisor with a $0 minimum and annual asset management fee 0f just 0.35%. However, this does not come with access to an advisor you can communicate with directly.
So if you are a more hands-on investor who likes to choose their funds and do their own financial planning then Fidelity may be a better platform for you.
If you require more assistance in managing your investments and need help in creating a financial plan then Personal Capital may be the better option for you.