Personal Capital Review: 2023 Edition

Investments and retirement are two words that are bound to make even the most prepared and grounded of individuals nervous. Figuring out how and where to invest in or what plans are best to ensure your retirement will go smoothly can often be hard to accomplish on one’s own. Therefore, the go-to move is to find a financial service that will help guide your steps. That in itself is often a mission, but Personal Capital is here to help. In this Personal Capital Review, we’ll break down this financial site and how it works.

Personal Capital Overview

When it comes to personal finance issues, most financial sites offer few options regarding investment tracking tools. Personal Capital, on the other hand, places its focus on retirement planning and investments. 

Personal Capital is an online financial advisor. It combines robo-advisory algorithms and practices with access to real financial advisors, making the user experience more personal. The service offers a variety of views on user’s holdings, gives personalized advice and estimations on retirement plans, and also offers state-of-the-art features for cryptocurrency tracking and transaction management. 

Using Personal Capital requires a minimum investment of $100,000. Accounts holding $200,000 or more get access to two dedicated financial advisors; everyone else shares a team of advisors.

The service charges 0.89% as account management fees, which can drop to as low as 0.49%. Personal Capital fees provide a solid incentive for accounts with larger balances, dropping significantly as your investment size grows.

The service comes with a ton of investment and financial planning tools. Some of these tools are already free to the general public. Additionally,  users can link existing accounts, track the performance of their portfolios, retirement progress, net worth, and even a spending tracker.

There is also the retirement feature, which helps clients plan withdrawals in advance and helps them with their tax optimization strategy.

Who Should Use Personal Capital?

Personal Capital is best for:

• Investors with a high net worth
• People with hands-off investing strategies

This is because of the service’s tax optimization, access to human financial advisors, and free financial management tools.

Personal Capital Performance

Personal Capital really shines with investments. This online financial advisor offers three tiers of service.

The first one is for clients with assets worth between $100,000 and $200,000 invested in exchange-traded funds portfolios. These carry an 0.08% weighted average expense ratio and are tax-efficient.

The second tier is for clients with assets worth between $200,000 and $1 million, who will receive all the benefits of the first tier, in addition to the ability to possess customizable portfolios that include ETF and individual stocks.

Finally, the third tier of service is for clients with $1 million or more worth of assets. This tier of clients receives tier 1 and 2 benefits, along with the ability to invest in individual bonds.

As we already mentioned in our Personal Capital review, the service takes a personalized advisory strategy, which means it not only views the assets it manages but also considers the entire finances of the client. Through the Smart Weighting service, its portfolio selection process, Personal Capital puts equal investments in all sectors - unlike the S&P 500 index.

Personal Capital says this strategy for managing portfolios operates on the basis of less risk-more return, which is what every investor hopes for. In a series of tests, Smart Weighting beat S&P 500 by more than 1.5% yearly and had less volatility, too.

This portfolio management strategy also helps Personal Capital find more opportunities for tax-loss harvesting. Additionally, while doing our review of Personal Capital, we observed that because the company uses individual securities, it can target and sell them when the need arises.

To cap it all off, the company is also keen on using socially responsible strategies. To accomplish this, it screens United States equities based on several factors; social, governance, and environmental.

Personal Capital Tools

Users are privy to comprehensive and free tools, including a 401(k) fee analyzer, a spending tracker, and an investment checkup. While you must create a login identity to access these tools and use them, the great thing about Personal Capital is that it doesn’t require you to enroll in the advisory service.

Once you have signed up and created your Personal Capital account, you can link your bank as well as credit card and brokerage accounts.

Based on the information Personal Capital finds, it analyzes the allocation of assets in your accounts and informs you on how much exactly you need to increase or decrease on an asset class in line with the recommended target.

DIY investors will find this especially useful, as they can make their adjustments based on this advice. Other tools include:

Spending Analysis

This looks at your cash flow and categorizes your expenses into groups like healthcare, groceries, feeding, and clothing. It also tracks bills due and income sources.

Retirement Planner

Personal Capital reviews your investment accounts with the retirement planner to predict whether you can meet your needs when you retire. These needs can be adjusted, along with expected Social Security tax and income, your life expectancy, and assumptions on investment returns.

The retirement planner takes real-time data from your account and records your daily financial activity, using that to update the estimates of your predicted spending during retirement.

Dedicated Financial Advisors

Investors with $200,000 or higher balances get two dedicated financial advisors providing insight on everything from refinancing, taxes, retirement planning to mortgages. Balances of $100,000 to $200,000 have access to a team of advisors instead, who perform a fiduciary obligation to clients. The advisors are available through email, video chat, and phone.

Personal Capital Dashboard

The dashboard is another one of Personal Capital’s offerings. With this feature, you can view details about your account such as your net worth, portfolio allocation and balances, as well as cash flow. There is also a module detailing your holdings that shows you the performance of your investments, with a percentage view of your entire portfolio. You can also see the investments that are gainers and losers.

And assets get managed, the more tools and services apply to the account. These additional tools and services include home financing, private banking services, stock options construction of the estate, tax, or legacy portfolios, and college savings planning.

Personal Capital Cash

There is a list of financial advisors offering accounts with high-interest cash management online. Personal Capital joined that list when it launched Personal Capital Cash in 2019. This account pays users a 0.05% APY, does not require a minimum account balance, and is free from the regular management fee that Personal Capital charges. In a nutshell, you do not have to invest with Personal Capital to use this cash account.

However, if you are an investing customer with the company and use the cash account as well, you become eligible for a bump in your cash account’s interest rate. Personal Capital Cash is protected with FDIC insurance of up to $1,500,000, beating Wealthfront’s $1 million offer.

Personal Capital App Review

Personal Capital’s mobile app is available on both iOS and Android and is quite different from the web platform. The opening screen shows a graph for the user net worth, totals for assets and liabilities, as well as account balances. The panel links to the website’s major dropdown menus, but it is an abbreviated version of the web platform.

All transactions made can be viewed from the app, but you cannot add new ones, while budgeting and cash flow are represented in registers and charts. The investment tools are much better on the website, but you can still access your holdings and portfolio allocation from the app. You can also use the retirement planner tool.

The app offers a great user experience all-around.

Personal Capital Private Client

Personal Capital also offers its clients a private service, which provides tax-efficient portfolio customization and gives access to private equity investments. All of this is offered alongside a slew of banking services through its partnership with BNY Mellon.

Other features from Personal Capital include security settings like multi-factor authentication and Foreign Login Alert when you (or someone else) log in from an unknown device, as well as a new feature that Personal Capital uses to track cryptocurrency. 

Personal Capital Customer Support

Personal Capital gives customer support for issues Monday through Friday, from 8 a.m. to 6 p.m. Pacific time. All users have access to direct phone numbers of their assigned advisors.

Final Thoughts

Personal Capital offers its clients a variety of services, providing support nonretirement accounts, rollover, Roth, traditional and SEP IRAs, trusts, and cash accounts (earlier discussed). It also offers advisory services for 529 and 401(k) allocations, even though it does not manage them directly.

That’s stellar service. It does, however, fall short in some areas, such as its account minimum requirement. The $100,000 minimum is quite a high figure, and it makes Personal Capital’s wealth management services out of reach for many customers. Personal Capital’s cost is also driven up by management fees, but these can be discounted to very reasonable amounts, depending on your total balance.

Investors with Personal Capital with account balances under $1 million pay 0.89% of their assets managed. This is quite a bit compared to other advisors like Vanguard, which charges 0.30%, and Betterment Premium, gives  unlimited phone access to advisors at just 0.40%. 

Nevertheless, the pros will outweigh the cons for a lot of people. Personal Capital’s services make the financial advisor one of the best options on the market, though it is clearly aimed at bigtime investors first and foremost.