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Personal Capital Review: Take The Work Out Of Managing Your Money

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When it comes to managing money, how great would it be if someone else could do it all for you?

Face it: We’re not all whizzes when it comes to budgeting, saving, or investing our cash. That’s why handy tools called robo-advisors exist.

Personal Capital is one of several robo-advisors that lets you link your financial accounts, see how much you’re worth, create a budget, set spending and savings goals, analyze your already-there investments, and keep track of your overall financial picture. In a nutshell, it’s a hands-free system for managing money.

That’s great news for people like me who’d rather have the experts take care of the investing stuff which, admittedly, I don’t know much about. Want to check out Personal Capital for yourself before digging into the review? Here’s the link:

What is Personal Capital?

Personal Capital is a money management company that blends technology with simplicity to bring its clients an easy way to understand, and better manage, their finances. The company currently has over 1.9 million users and $625 billion worth of accounts it tracks, just to give you an idea of its popularity.

Personal Capital does have several similarities to other robo-advisor systems, but it’s also a bit different in its approach. This company focuses on a holistic approach to money management, meaning that it analyzes your full financial picture, helps you understand your finances, and then makes moves that work for you based on your current situation, future goals, and what you can afford.

Real advisors are also part of the system, so you don’t have to worry about your money being solely in the hands of computers. Experts are there to make sure your money goes where it should and are available to offer advice when needed.

Who is Personal Capital For?

Personal Capital is probably not best for complete newbies to finances and investing. You’ll need at least a basic idea of how budgeting, saving, and investing for the financial tools to have meaning for you.

However, Personal Capital offers a lot of help along the way, so intermediate investors who could still use a bit of guidance will probably find it the most helpful. Since it’s a money management service, it’s also good for people who prefer a somewhat hands-off approach toward investing rather than being in complete control over their cash.

How Does Personal Capital Work?

If you’re new to robo-investing, then this probably sounds like a foreign language to you so far, so let’s break it down a bit.

Personal Capital links to your financial accounts, like checking and savings accounts, auto and personal loans, and credit card accounts. Its several financial tools and analyzers help you see where your money is and how it’s always moving, like when you pay bills, add more to a credit card, or pay off a loan.

In addition to tracking your income and expenses, Personal Capital will connect you to an advisor to learn more about your financial goals. Based on your current situation and future goals, your advisor can help you create some short and long-term goals to work toward. From there, your advisor draws up a financial plan to assist you with everything from savings to retirement.

The Wealth Management program is another Personal Capital feature but it’s part of the paid service. This program takes over your investment portfolio with the help of investment experts to place your money in appropriate stocks, EFTs, and other types of investments to help you reach your goals.

Pros and Cons of Personal Capital

If you’re choosing between Personal Capital and other wealth management systems, then these pros and cons may help you decide if Personal Capital is the right one for you:

Pros of Personal Capital

  • Offers a 100% free account with access to financial tools
  • High level of security like you’d expect from financial services
  • Email alerts help you stay on top of your finances
  • Has a mobile app that enables you to track everything on the go
  • Real advisors help create a plan that works for you
  • Offers special services to private clients with more than $1 million to invest
  • Accounts with at least $200,000 get dedicated financial advisors

Cons of Personal Capital

  • Users must pay for an account to gain access to the wealth management services
  • High minimum investments make Personal Capital not the best option for beginners
  • Relatively high fees compared to other similar services
  • Some financial accounts may not link to Personal Capital, leaving them out of your financial picture

Personal Capital Financial Tools

As a free member of Personal Capital, you’ll have access to the free financial dashboard and various other helpful financial tools to keep you on track with your money.

Account Management Dashboard

Your account dashboard is where you’ll find your overall financial picture and broken-down analytics that can help you see where your money is, what it’s being used for most, and how much you might be able to save or invest.

On your dashboard, you’ll see information like:

  • Your net worth
  • Spending reports
  • Account balances
  • Account transactions
  • Retirement savings
  • Upcoming bills
  • Projected investment fees and returns
  • Your overall cash flow
  • Investment portfolio

Personal Capital has one of the best financial dashboards in the business. The comprehensive trackers and analyses might be a little confusing at first for beginners, but they’ll give you just about every piece of information you need to understand more about your money.

There is one drawback, though, that some users face: Not all their accounts link to the dashboard. You might have a bank account or credit card that doesn’t allow the use of third parties to connect to their accounts, which will leave them out of your financial picture. You’ll need to continue manually tracking those accounts if you run into this problem.

Spending Analysis and Budgeting

In your account, you can set up a budget with monthly spending goals for various categories, like bills, food, and entertainment. Personal Capital can assist you in creating this budget by showing you with graphs where you’re currently spending your money based on your linked financial accounts’ information, called Spending Analysis.

Use the Spending Analysis to figure out where you might be able to cut back so that you’ll have more money to reach your savings, investing, or retirement goals.

Bill Reminders

Do you have trouble remembering when it’s time to pay your bills? Your Personal Capital account can help you with that, too.

When you add your financial accounts to Personal Capital, the system will automatically track your bill due dates of credit cards and loans. Your dashboard will display your upcoming bill date and amount, plus your current balance and previous bills you’ve paid.

If desired, you can tell Personal Capital to send you email alerts to remind you to pay your bills before the due date approaches.

Retirement Planner

Saving for retirement is a financial move that should be in everyone’s goals as soon as possible, and Personal Capital helps you with it.

The retirement planner is more than just a calculator like other services provide. Instead, the system uses your financial information, including your goals and current situation, to detail an automated plan for retirement. Rolled into the calculation are also your investments, projected returns, social security payments, and other essential pieces of the puzzle.

You can customize the information by changing the projected inflation rates, your social security payment timeline, your spouse’s financial information, and anything else you think might affect your retirement plans in the future.

Investment Checkup

The investment checkup tool will analyze your current investments to see if they’re potentially beneficial for your financial goals. With this tool, you’ll get a personalized risk assessment based on your assets, investments, and how much you’re planning to need for savings, retirement, and other future necessities.

To start using this tool, you’ll need to link your financial accounts, including any investments and assets you currently have, like a 401(k). You’ll then be able to see how your investments compare to targets from Personal Capital and can adjust them, if necessary.

Fee Analyzer

It’s possible that you’re getting charged fees by your bank or other financial institutions that you weren’t even aware of, or they could have increased without you realizing it. That’s where Personal Capital’s Fee Analyzer comes into play.

Fee Analyzer tracks all fees for your linked accounts, including any fees you incur from your investments, savings accounts, credit cards, etc. Personal Capital adds up all your fees and shows you how much you might be paying just in fees if you don’t change what you’re currently doing. It’ll also show you how those fees could impact your retirement by eating away at your savings.

Net Worth Calculator

Calculating your net worth isn’t easy when you don’t have the right tools, which is why Personal Capital has also added this feature to its comprehensive financial dashboard.

The system takes into account your assets, like bonds, stocks, IRAs and investment accounts and then subtracts any debts you owe, like an auto loan, mortgage, or student loans. You’ll get an updated, illustrated look at your net worth whenever you need it that adjusts when anything in your financial picture changes.

Personal Capital Fees and Pricing

Personal Capital has a 100% free service that includes access to its invaluable financial tools and dashboard, but its wealth management service with dedicated advisors and a strategic investment plan is only available for paid members.

Here’s how Personal Capital pricing works:

You can sign up for free to set up an account, link your financial accounts, and let Personal Capital take over your financial picture. A free account gives you the comprehensive dashboard with your net worth calculator, investment checkup, retirement planner, fee analyzer, and more. You can always test this out for a few months before jumping into the paid version for investment help.

To use the Wealth Management program, you won’t need to sign up for a subscription. Instead, you’ll pay a management fee for the amount of money you have under management:

  • 89% for up to $1 million
  • 79% for up to $3 million
  • 69% for up to $5 million
  • 59% for up to $10 million
  • 49% for more than $10 million

The fee goes down the more you have invested and managed by Personal Capital, but even the lowest fee is more than other services charge (some are closer to 0.25% for much lower balances). However, there are no other fees involved, so the management fee makes it easy to know exactly how much you can expect Personal Capital to take.

How Personal Capital Invests Your Money

If you choose to go with the paid wealth management program from Personal Capital, you’ll get access to investment help with dedicated financial advisors by your side.

Personal Capital has a system it uses that’s based on academic research about investing, asset allocation, strategies, and more. The company’s financial advisors are experts on the methodologies it uses to create a personalized approach for you.

Your advisors will work with you to create a risk plan that makes sense for your financial situation and goals. They’ll work with that risk to develop an investment strategy that should, potentially, give you the highest returns on your investments. In other words, Personal Capital customizes every step of the investment process to your needs instead of creating blanket strategies for all its clients.

How Personal Capital Protects Your Information

One of the benefits of being a Personal Capital client – free or paid – is that you’ll have protection of high-level security for your personal and financial information. The company protects all data sent to its system with the same type of encryption that financial institutions use to prevent hackers from gaining access to your private information.

Personal Capital takes this security even further by sending your financial account credentials to Yodlee, a reputable fin-tech company, for storage instead of storing them in your browser or in Personal Capital’s database.

When you link any devices to your account, like a computer or tablet, you’ll need to register each one by following the instructions Personal Capital sends you over the phone or via email. This extra step ensures that unauthorized people can’t log into your account from their devices.

How Does Personal Capital Stack Up Against Other Robo-Advisors?

Personal Capital definitely isn’t the only service of its kind. Here are a few other leaders in the robo-advisor industry with quick comparisons of how they stack up to Personal Capital.

Betterment

Betterment also charges based on your balance, but the highest fee is 0.40%, which is less than the lowest Personal Capital fee. There are no minimum balances or deposits either.

Betterment doesn’t offer an impressive range of financial tools like Personal Capital. Its dashboard is simple, which is excellent for beginners, but you also won’t learn as much about your finances.

Mint

Mint is one of the most popular financial trackers out there and it’s made for use on your mobile devices. It’s also free to use for all its services.

Unfortunately, Mint doesn’t provide any account management or investment help. It’s simple a budgeting and tracking tool, but it has some perks like credit score monitoring and analyses of your retirement and other savings accounts.

Read our full Mint review here.

Wealthfront

Not only does Wealthfront offer financial tracking and help with investing, but it also gives clients an easy way to borrow money when they need it.

The borrowed cash comes from a Portfolio Line of Credit, so your investment portfolio will act as collateral. There’s no application process or credit check, but you do need at least $100,000 in your portfolio to have a line of credit.

WealthSimple

WealthSimple is a lot like Personal Capital with its offerings, like financial tools and account management. The company sets up an investment portfolio for you complete with stocks, bonds, and EFTs.

There are no minimum deposits or balances, and you can have your money managed for free up to $5k (or $10k with referrals). Management fees range between 0.40% to 0.50%, which is still high compared to other robo-advisors, but $100k in investments will get you lower rates.

Read our full WealthSimple review here.

Is Personal Capital a Scam?

Personal Capital is an entirely legitimate way to keep your finances in check and growing with the help of expert advisors who create custom plans for you and your goals.

Like any business, Personal Capital has a few complaints from users who just didn’t see the benefits of the service for their unique needs. Others aren’t thrilled with the high management fees. It won’t be everyone’s cup of tea.

Personal Capital’s financial tools, though, are 100% free and offer a lot of education for people who want to get, or stay, on track with their finances. And, for a wealth management service, it’s comprehensive and about as hands-off as they come, making it worth the cost for people with a lot of investing to do.

How to Get Started with Personal Capital

You can sign up for Personal Capital by clicking here.

You’re not obligated to pay for anything when you sign up because you’ll start with the free account. Once you learn more about Personal Capital and if it’s right for you, you can choose to pay for the Wealth Management program.

Personal Capital also has an iOS and Android app that I suggest downloading after you set up your account, so you can have access to all the same tools you would on the website, all from your mobile device.

Final Thoughts

Personal Capital is best for those with a lot of cash to invest. The more you let Personal Capital manage, the lower the management fees, giving you a higher return on investment.

The service won’t be for everyone, but even those who don’t want to pay for the Wealth Management program can likely benefit from the array of free financial tools Personal Capital provides.

Want a few more robo-advisor suggestions? It’s always a good idea to compare a few services’ fees and offerings to learn which one is best for you. Check out our recommendations for some of the best robo-advisors, and tell us below: Have you used any? What service is your favorite and why?

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