investingsimple logo
Menu
Written by Matthew Cerminaro on October 26, 2020
Category: 
FTC Disclosure

Robinhood vs Personal Capital 2021: Which Is Better?

If you are looking to start investing in the stock market and meeting your financial goals, the first step is to find the right broker. And of the many to choose from, two of the hottest on the market now are Robinhood and Personal Capital.

Robinhood is commission free stock trading app that aims to be the most beginner friendly brokerage out there.

Personal Capital offers free tools for managing your money as well as a robo-advisor for high net worth clients.

Both have unique features, fees, pros, and cons that make each different in their own ways. We will look at Robinhood vs Personal Capital side by side so you can see which one is a better fit for you!

Product Features Overall Price Buy Now
Robinhood review

Robinhood Review 2021: Best Investing App?

  • Trading Fees
  • Ease Of Use
  • Account Types
  • Research/Data
  • Securities Offered
Download Robinhood
Personal Capital review

Personal Capital Review 2021: Best Robo-Advisor?

  • Pricing
  • Free Tools
  • Minimum Investment
  • Assets
  • Planning Tools
Download Personal Capital

Summary: Personal Capital vs Robinhood

  • On Robinhood, you can buy individual stocks and ETFs with no trading commissions
  • Personal Capital is more geared to the investor who is looking for portfolio automation 
  • Neither Robinhood or Personal Capital have a tactical trading platform for their users
  • You can access margin trading through Robinhood's Gold Feature
  • Personal Capital has an account minimum of $100K, and Robinhood has a $0 account minimum policy
  • Robinhood offers fractional shares so you can buy proportions instead of full shares of a company if you choose
  • Both have Mobile Apps that are highly regarded, well-reviewed, and simplify the investment process
  • Personal Capital charges an asset management fee while Robinhood is 100% free
  • Robinhood does not offer prebuilt portfolios or any kind of portfolio guidance
  • Robinhood does not offer retirement accounts while Personal Capital does

Which robo-advisor is the best for you?

Answer a few quick questions and we'll recommend the best advisor for you, based on our objective analysis.

So-Fi Automated Investing

Read Full Review

Open Account

Management Fees $0

Account Minimum $0

Best For: low account balances, beginner investors

M1 Finance

Read Full Review

Open Account

Fees: $0

Account Minimum: $100/$500

Best For: beginner investors, pre-built portfolios

So-Fi Automated Investing

Read Full Review

Open Account

Management Fees $0

Account Minimum $0

Best For: low account balances, beginner investors

M1 Finance

Read Full Review

Open Account

Fees: $0

Account Minimum: $100/$500

Best For: beginner investors, pre-built portfolios

So-Fi Automated Investing

Read Full Review

Open Account

Management Fees $0

Account Minimum $0

Best For: low account balances, beginner investors

M1 Finance

Read Full Review

Open Account

Fees: $0

Account Minimum: $100/$500

Best For: beginner investors, pre-built portfolios

So-Fi Automated Investing

Read Full Review

Open Account

Management Fees $0

Account Minimum $0

Best For: low account balances, beginner investors

M1 Finance

Read Full Review

Open Account

Fees: $0

Account Minimum: $100/$500

Best For: beginner investors, pre-built portfolios

Personal Capital

Read Full Review

Open Account

Fees: 0.49% to 0.89%

Account Minimum: $100,000

Best For: Access to human advisors, larger account balances

Betterment

Read Full Review

Open Account

Fees: 0.25% to 0.40%

Account Minimum: $0

Best For: Full investment automation, access to human advisors

Personal Capital

Read Full Review

Open Account

Fees: 0.49% to 0.89%

Account Minimum: $100,000

Best For: Access to human advisors, larger account balances

Betterment

Read Full Review

Open Account

Fees: 0.25% to 0.40%

Account Minimum: $0

Best For: Full investment automation, access to human advisors

Personal Capital

Read Full Review

Open Account

Fees: 0.49% to 0.89%

Account Minimum: $100,000

Best For: Access to human advisors, larger account balances

Betterment

Read Full Review

Open Account

Fees: 0.25% to 0.40%

Account Minimum: $0

Best For: Full investment automation, access to human advisors

What Is Robinhood?

Robinhood's mission is to democratize the investing industry for all.

And, by cutting things like trading commissions completely out of its business model, it is able to live up to its word. Despite maintaining a low-cost structure, the broker also offers an array of features that help to simplify the investment process.

Let's take a look at some of them now!

Robinhood Features

As mentioned, Robinhood has an extensive array of top-quality features.

Because the broker has been around since 2013, it has had almost eight years to refine its platform to make it a premier choice for those searching for an online broker.

Robinhood Mobile App

Robinhood's app is one of the most notable features of the broker. Because of its ease of access and simplicity, Robinhood's app has found its way to #15 on the app store! It can also be found on the Google Play store for those who do not use apple products.

Track returns, place trades, maintain a watchlist, and so much more on the Robinhood app!

Zero-Commissions

Speaking of placing trades, how much does that cost on Robinhood? It may be hard to believe, but $0!

That's right, Robinhood offers no extra commission if you are looking to place a buy or sell on the extensive array of stocks that it offers. And in regard to options, the same holds.

No commissions on options contracts either! 

Free Stock Referral Program

When opening a Robinhood account, you will be granted a free stock! This stock can range between $2.50 and $250, and is automatically rewarded to the account holder when an account is opened. Not a bad deal!

The program gets even better when you are granted a referral code. All Robinhood users are given a referral code to invite friends to join Robinhood. When you refer a friend, both accounts will be granted a free stock!

Best Free Stock Promotions

BrokeragePromotionLink
Robinhood Logo1 Free Stock (Up To $200)Download
Webull Logo4 Free Stocks (Up To $3,700)Download
Firstrade trading platform3 Free Stocks (Up To $600)Download
Public LogoFree $10 Stock SliceDownload
M1 Finance Robo AdvisorGet $30 When You Deposit $1,000Download

Robinhood Fractional Shares

A very interesting and relatively new feature of Robinhood is its fractional shares initiative.

Instead of buying full shares of companies, Robinhood allows its users to buy partial shares.

Looking to buy an expensive $100 stock and only have $20 to invest? No problem! You can buy 20% of the stock and be entitled to its underlying returns!

Robinhood Fees

If you use the basic Robinhood account, there are no commissions and no fees.

They do, however, offer Robinhood Gold for a fee.

Robinhood Gold

robinhood gold

Robinhood Gold comes in at a price of $5 per month and grants users access to margin trading and stock research.

While margin trading does come with several risks, if you are interested in buying stocks on borrowed money, you will need to pay the $5 monthly premium.

If research is something that you value heavily, and research is very important in the stock selection process, the $5 per month will let you access Robinhood's research.

This also gives you access to Level II market data and larger instant deposits. The $5 per month does not include your margin interest.

Margin Fees

There are fees associated with taking out margin on Robinhood. After signing up for Robinhood Gold which is necessary to access margin on Robinhood, your first $1,000 of borrowed money can be used with no extra cost.

After the initial $1,000, however, there is a 5% daily margin fee for borrowed money. 

Robinhood Pros

  • Mobile App is extremely easy to use and has received resounding positive feedback
  • Fractional shares lets you buy portions of companies to help diversify your investment portfolio
  • $0 commissions on stocks, ETFs, and option contracts
  • Robinhood's free stock referral program lets you receive a free stock when referring friends
  • Margin trading can be accessed on Robinhood, however it can only be found on Robinhood Gold

Robinhood Cons

  • No tactical trading platform offered, so have to use a third party system if you are looking to conduct technical analysis
  • Limited research offered unless you are using Robinhood Gold
  • Margin rates are relatively high compared to the industry
  • Limited educational resources offered on Robinhood
  • Customer support has received criticism due to lack of live representatives' availability to answer questions

What Is Personal Capital?

In short, Personal Capital is an online Financial Advisor and Wealth Management service.

The service is very different from Robinhood in the way that its features are geared toward the passive investor.

Personal Capital Features

Personal Capital has many features that will help to advise you and manage your finances. Its features focus mainly on automation, which is what Personal Capital was built on.

Building a well-diversified portfolio for you and getting advice from top financial advisors are both priorities to Personal Capital.

How Personal Capital Manages Your Money

Personal Capital, as mentioned, uses automation to manage your money.

  1. First, you will select the plan that correlates with the assets you want Personal Capital to manage.
  2. Next, you answer questions about your goals, time horizon, risk tolerance, etc.
  3. Personal Capital designs a well-balanced portfolio that works for you.

Personal Capital Dashboard and user interface

Smart Weighting

Under Personal Capital's Wealth Management plan is its Smart Weighting feature.

Smart Weighting in a portfolio is designed to allocate and weigh different sectors in your portfolio to manage the risk of your portfolio. For example, if your goals align with a more aggressive portfolio, Personal Capital's Smart Weighting feature may allocate more of your portfolio to the technology sector due to its higher volatility and returns.

This is just one example, but the principal to take away is that Personal Capital weighs all portfolios differently, and it uses its Smart Weighting feature to do this!

Personal Capital Fees

Personal Capital maintains a low fee-based structure, however there is an annual assets-under-management fee that you should be aware of depending on the Personal Capital account you are planning on opening.

Annual AUM Fee

The annual Assets-Under-Management Fee, which is a % of the total assets that Personal Capital is managing for you, is variable based on the type of account you open.

The minimum amount to open up an account with Personal Capital is $100K and scales to $10M+.

The annual fees that you should expect Personal Capital to charge range from 0.89% (for the smallest account type) down to 0.49% (for the largest account type).

Because there is an inverse scaling of account size to % fee, the larger your account is, the less you should expect to pay in annual fees! This is definitely something to think about especially if you fall on the lower end of the account minimum spectrum.

Personal Capital Pros

  • Free money management tools available for all
  • Highly automated service, so very beginner-friendly
  • Tax-incentive benefits to optimize portfolio returns
  • Smart Weighting feature diversifies your investment portfolio
  • Surveys allows you to note important time horizon and risk tolerance questions to optimize portfolio construction

Personal Capital Cons

  • The minimum account value is $100k which may be a large amount for some
  • Service is highly automated which may be harmful if you are looking to have more autonomy over your investments
  • AUM fees are relatively high and may cut into portfolio gains
  • Not a trading platform, so you cannot buy individual stocks or ETFs on Personal Capital

The Final Verdict: Robinhood vs Personal Capital

Overall, Robinhood and Personal Capital are both well-regarded online brokers with different goals.

On one end, Robinhood is more geared to the investor that is looking to make their own trades and have control over their portfolio.

Personal Capital, on the other hand, is geared more toward the investor that is looking for a highly automated service to create a portfolio for them.

The $100,000 minimum to invest with Personal Capital makes this truly out of reach for most investors. Robinhood is looking to open their doors to all by offering $0 minimums.

Robinhood vs Personal Capital Review: 2020
Article written by Matthew Cerminaro
Matt is currently attending Union College pursuing a Bachelor of Arts in Economics. He participates in the student investment fund and is a member of the Union College football team. Matt runs his own personal finance Instagram page and market-related blog where he writes about economics and general wealth accumulation tips.

Latest Posts

Power Your Investing

Choosing the right product and service is essential for your investing. Here are some of the tools and services to help your portfolio grow.
Stock Rover
From stock screening and charting, to investment research and portfolio construction, Stock Rover provides a robust all-in-one platform for the do it yourself investor.
Try Stock Rover
Betterment
The smart money manager.
Betterment provides investment management and access to financial planners. Basic plans start at a 0.25% annual fee.
Try Betterment
Fundrise
Passively invest in private real estate deals with as little as $500. Fundrise allows you to own residential and commercial real estate across the U.S. starting at a 1% annual fee.
Try Fundrise
© Copyright 2018 - 2020 Investing Simple LLC. All Rights Reserved. Investing Simple is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. Investing Simple has advertising relationships with some of the offers listed on this website. The information on Investing Simple could be different from what you find when visiting a third-party website. All products are presented without warranty. For more information, please read our full disclaimer.
Developed by Stallion Cognitive
magnifiermenucross-circlechevron-down-circle
Copy link
Powered by Social Snap