Investing Simple Logo
Menu
Get Started on Robinhood With 1 Free Stock!
Robinhood is offering new users 1 free stock worth between $3 and $225 when you open an account and fund it with any amount of money.
Written by Matthew Cerminaro on March 24, 2021
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!

Robinhood vs Personal Capital: The Basics

Robinhood is the original commission-free stock trading app. Since launching in 2013, they have gone on to grow exponentially and to this day they are still one of the most popular apps on the market. On the app, you can buy and sell stocks, ETFs, options, and cryptos. While you are able to use the app for free, there is no guidance or advice available which may deter brand-new investors.

Personal Capital takes a more hands-off approach by offering users a robo-advisor solution. A robo-advisor combines the ease-of-use of an app like Robinhood, and the professional guidance of working with an in-person financial advisor. Through the platform, you are able to receive personalized investment advice from a team of financial advisors. As a result, the platform is not free.

While both platforms allow users to invest in the stock market, they go about it in very different ways. With Robinhood, you are largely on your own to do your research and due diligence. With Personal Capital on the other hand, their team of advisors is there to support and guide 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 nor Personal Capital has 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
  • 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

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 over eight years to refine its platform to make it a premier choice for those searching for an online broker.

Robinhood Free Training

We put together a free 30 minute video training that walks you through the entire process, step by step. This training will help you get up and running in no time at all.

GET THE GUIDE

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!

Robinhood Crypto

For investors looking to dip their toes into the waters of cryptocurrencies, Robinhood Crypto offers a way to do just that. Investors can buy and sell cryptos like Bitcoin and Ethereum from within the standard Robinhood app.

This can be an effective way to get exposure to the cryptocurrency market without going through a dedicated crypto platform. However, there are some downsides investors should keep in mind.

The most significant of which is that you do not have the ability to transfer your crypto off of the platform. Many advanced crypto investors prefer to hold their crypto on a hardware wallet. This mitigates against the risk of the platform getting hacked and losing your assets. Our top pick for a platform allowing you to transfer your crypto to a hardware wallet is Coinbase.

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!

This can be a great way to help your friends to start investing and get rewarded in the process.

Best Free Stock Promotions

BrokeragePromotionLink
Robinhood Logo1 Free Stock (Up To $225)Download
Webull Logo2 Free Stocks (Up To $1,850)Download
Firstrade trading platform2 Free Stocks (Up To $400)Download
M1 Finance Robo AdvisorGet $30 When You Deposit $1,000Download
Acorns LogoFree $10 BonusDownload
SoFi Robo Advisor1 Free Stock Up To $1,000Download

Robinhood Fractional Shares

For smaller investors, the ability to buy fractional shares on Robinhood is a significant selling point.

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

This means that in order to invest in Amazon, you don't need over $3,000 to buy a single share. You can instead buy as little as $5 worth of Amazon by buying a fractional share. As a result, complete beginners have access to a much wider variety of investments.

Robinhood Fees

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

They do, however, offer their premium Robinhood Gold subscription 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 advanced 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 2.5% daily margin fee for borrowed money. Your interest will be calculated daily and charged to your account on a monthly basis along with your $5 fee.

Robinhood Pros

  • Mobile App is extremely easy to use and has received resoundingly positive feedback
  • Fractional shares let you buy portions of companies to help diversify your investment portfolio
  • $0 commissions on stocks, ETFs, and option contracts
  • Crypto investing for those looking for exposure to digital assets
  • Robinhood's free stock referral program lets you receive a free stock when referring friends
  • Ability to trade stocks on margin

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
  • Limited educational resources offered on Robinhood
  • Customer support has received criticism due to lack of live representatives available to answer questions

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 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 a more 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 the core concept Personal Capital was built on.

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

How Personal Capital Manages Your Money

Personal Capital, as mentioned, uses automation and in-person financial advisors 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!

Access To Financial Advisors

As a client of Personal Capital, you will have access to a team of licensed fiduciary advisors. The term fiduciary means that they are obligated to put your interests ahead of their own or their company's. This is a must-have when you are working with any financial advisor.

You'll be able to schedule calls with a financial advisor to discuss your individual investments, 401k plans, and even your general personal finances.

While they won't be able to dive in as deep as a personal financial planner, you're still getting much more support than you would from an app like Robinhood.

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.

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
  • Access to a team of fiduciary financial advisors to guide you
  • 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 many
  • 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.

Robinhood is more geared to the investor that is looking to make their own trades and have control over their portfolio. Users know that they are on their own to figure out how to invest.

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 beginner investors. If that is the case for you, Robinhood opens 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.
Robinhood
Robinhood provides an easy-to-use free trading platform for beginner investors. Robinhood has $0 account minimums. Get a free stock when you open an account below.
Try Robinhood
M1 Finance
M1 Finance offers a free investing platform where users can build portfolios of stocks and ETFs. Users can also choose from a variety of pre-built portfolios offered for free.
Try M1 Finance
Fundrise
Passively invest in private real estate deals with as little as $10. 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
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram
Copy link
Powered by Social Snap