Personal Capital is leading the pack in a new breed of hybrid robo-advisor. They offer a unique service to high net worth investors by combining the robo-advisor algorithms and personal touch of human advisors. Personal Capital is a digital wealth manager. It’s not a traditional advisor, nor a robo-advisor.
However, that’s not to say they don’t have something to offer investors at every level. In fact, Personal Capital has some fantastic free tools that are great for everybody and will speed you on your way to having control of your finances.
The platform links banking, investment, retirement and credit accounts into one location. This allows investors to see a broad overview of finances. No longer do you need to spend countless hours on spreadsheets trying to reconcile accounts.
Beautiful Web and Phone Interfaces
The Personal Capital dashboard and interfaces are some of the cleanest and best laid out in the business. An accounts summary is displayed in an easy to read format. The dashboard displays both banking and investing information. Additionally, reporting is quick and simple. At a glance you can see everything from net worth to portfolio balances to budgeting information and cash flow.
Both the web and phone app version of the software is simple.
The free tools are some of the best available, even compared to paid apps. Budget minded individuals will love the free Mint.com-like budgeting and expense tracking tools. The platform even tracks how spending habits change over time. However, someone looking only for budgeting tools might be better served by a site like Mint. Personal Capital is an investing platform first.
Diehard investors will be happy to see all their accounts in one place. Additionally, investors can pick and choose which accounts to review. The site even offers a unique “You Index,” which tracks your investing account performance against standard benchmarks. Simply put, Personal Capital is one of the best free platforms available for investors.
Even more free tools exist for retirement planning and asset allocation. For instance, the investment checkup gives insight into a portfolio.
It offers suggestions on how asset allocation could be improved, both historical and projected performance, and risk. In addition, there is a fee checker tool that suggests ways to reduce high fees.
How to sign up with Personal Capital
Joining Personal Capital is a breeze and completely free of charge. To begin, the sign up is a five minute process of filling out forms and verification emails. Then you connect your accounts. You can connect nearly any type of account. For example, even connecting to non-traditional accounts like Fundrise or Lendingclub is a simple process.
Personal Capital offers wealth management tools as well. These are for individuals who want more assistance with investing. Three tiers of wealth management exist.
The lowest tier, “investment service,” offers access to premade portfolios and general advice for 401k’s and budgeting. Individuals with up to $200,000 to invest qualify for this tier.
Investors who have between $200,000 and $1 million to invest will find services similar to that of a traditional financial advisor. However, the fees with Personal Capital are much less at just 0.89% of assets under management. Traditional advisors will charge 1% or higher of assets under management.
Investors with more than $1 million to invest will find even more services, including many of those provided by a CFP, like estate planning. Fees are on a sliding scale at this level and start at 0.89% and go down.
Pros and Cons of Personal Capital
Strictly speaking, Personal Capital is one of the best free tools available for investors today. However, there are a few drawbacks that will apply to certain individuals.
- The fantastic easy to use platform that combines all your accounts in one place.
- Completely free tools are better than many paid tools available. Sign up and using the tools are entirely free of charge.
- Wealth planning fees of 0.89% of assets is much cheaper than a traditional financial advisor.
- The site generates fantastic reports for banking and investing to dig down into your finances.
- The unique “You index” is a fantastic way to benchmark investment performance.
- There is a minimum of $25,000 of assets to be eligible for wealth planning
- Individuals with less than $200,000 to invest may be better served by a traditional robo-advisor. Traditional robo-advisors offer similar services at this level at a lower cost.
- The budgeting tools are decent, but not as nice as software specifically designed for budgeting. A platform like Mint may better serve individuals looking for a primary budget and expense tracking tool.
Who is Personal Capital best for?
Do-it-yourself investor’s will especially love the free tools. The ability to see all your accounts in one place is a major time saver. Even a beginning investor will appreciate the free planning tools to help with asset allocation and to avoid fees.
High net worth investors will see a significant savings in wealth management over traditional financial advisors with similar or even better levels of service, in addition to access of all the free tools.