Personal Capital Review 2018 – Fees, App, Performance

personal capital review

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These days you are spoiled for choice when it comes to picking a robo-advisor who can manage your money automatically.

You don’t need to lift a finger any more because all the hard work of portfolio selection is done for you.

But what if you want more than a computer algorithm to work on your behalf to invest your money? When the market falls or you have a query about your investments, would you like to pick up the phone to speak with a dedicated financial advisor?

If so, this Personal Capital review is written for you, the person who wants the best of both worlds: the power of computer algorithms to build customized portfolios to match your risk tolerance and financial goals and human advice on demand.

Personal Capital Fees

PERSONAL CAPITAL SPOTLIGHT

personal capital logo june 2018InvestorMint Rating

4.5 out of 5 stars

  • Management Fee: 0.49% - 0.89%
  • Account Minimum: $100,000
  • Brownie Points: Free tools to track spending; human advisors paired with clients

via Personal Capital secure site

Personal Capital Features

Fees0.49% – 0.89%
Minimum Investment$100,000
BudgetingFree via Mobile App
Socially Responsible InvestingYES
Dedicated AdvisorsYES
Best forRetirement Planning
401(k) AdviceYES
Device CompatibilityAndroid + iOS
Investment TrackingExcellent
BudgetingBest in Class
PromotionsFree to Join

How Personal Capital Works

Personal Capital is unabashedly the white-glove robo-advisor with superior customer service.

Unlike most robo-advisors, who rely solely on computer algorithms to invest money or connect clients to teams of live advisors, Personal Capital offers a more personal touch beyond simple robo-investing.

When you invest with Personal Capital, you will be assigned a dedicated financial advisor. Invest more than $200,000 and you will be assigned two dedicated financial advisors.

When markets tumble or you simply have queries about whether you are on track to reach your retirement objectives, dedicated advisors are available by phone or email.

Personal Capital Cost

As you might expect from a service that pairs you with a dedicated financial advisor who has in depth knowledge of your personal circumstances, pricing and account minimums are higher than at rivals like Betterment and Ellevest.

Even if you don’t qualify for investment management services, you can still download the free Personal Capital app. It ranks among the very best personal finance apps and helps you to easily track income, spending, and net worth.

If you want the best of both worlds: automated investment management plus human advisors who know your financial situation intimately, Personal Capital is virtually unmatched.

Is Personal Capital Right For You?

Personal Capital combines the best of computer-powered investing and traditional financial advisor services so it is ideal for the hands-off investor who is price sensitive.

Price-conscious Investors

A traditional financial advisor may charge north of 1% in management fees each year whereas Personal Capital fees range from 0.49% to 0.89%.

Investors who are eagle-eyed about costs should find it easy to justify paying less. After all, traditional human advisors don’t have the time to evaluate thousands of investments daily to find the best ones for each client.

Plus, Personal Capital relies on computer algorithms to lower the tax impact of transactions each year via a method called tax-loss harvesting.

Hands-Off Investors

If the idea of staying glued to your computer screen all day watching each tick of each stock or exchange-traded fund you own doesn’t appeal to you, Personal Capital is likely a good fit.

You don’t have to get involved in portfolio selection or weightings because Personal Capital makes the decisions for you about what percentage of stocks vs bonds to hold.

Plus, it scrutinizes the costs of investment expense ratios to ensure you are not being stung with high fees. In essence, you can sit back and relax confident in the knowledge that your portfolio will be invested intelligently and cost-efficiently.

Complex Financial Situations

Investors with large portfolios and more complicated financial situations are a good fit for Personal Capital.

Unlike some other robo-advisors who are content to serve customers with straightforward financial circumstances, Personal Capital won’t be intimidated if you need help with a taxable account, a trust, and an IRA.

Of course, a client with just a standard account managed will be served equally well.

Investors With Six-Figure Portfolios

The luxury service provided by Personal Capital requires you to jump over a pretty significant account minimum hurdle.

Only investors with $100,000 or more can sign up to Personal Capital investment management services. However, you don’t need to pay a dime to get started with the free mobile app.

If you fall into the bracket of higher net worth individuals who can deposit $200,000 or more then you will be paired with not one but two dedicated financial advisors who can be contacted by phone, email, or even video chat.

Socially Responsible Investors

Beyond the traditional investing services offered by robo-advisors, Personal Capital will build portfolios that align with your core values.

It labels this method the Socially Responsible Personal Strategy, and is a good fit for clients who care about the effects of say oil drilling, sugar consumption, environmental destruction, and other hot topics.

Inquisitive Investors

While Personal Capital is designed for investors who don’t want to actively invest their own money, it is a constant source of research for inquisitive minds.

Whitepapers on topics like estate planning, legacy planning, and building wealth are regularly featured free of charge.

How Does Personal Capital Make Money?

When you invest up to $1,000,000, you will be charged a management fee of 0.89%. For example, a client investing $100,000 would pay $890 per year.

For investors with larger account sizes, fee breaks are offered and drop as low as 0.49% for “whales” who invest $10,000,000 or more.

FeesAssets Under Management (up to)
0.89%$1,000,000
0.79%$3,000,000
0.69%$2,000,000
0.59%$5,000,000
0.49%$10,000,000

How Personal Capital Invests Your Money

Personal Capital incorporates the research of Nobel Prize Winner in Economics, Harry Markowitz, and behavioral finance expert, Shlomo Benartzi, to create an asset allocation formula called Smart IndexingTM that is designed to boost returns and lower risk compared to the S&P 500.

Smart IndexingTM is applied to portfolios with greater than $200,000 invested. (Elsewhere, Smart Indexing is referred to as Smart Beta)

The investment method is designed to increase returns and lower risk by allocating equally to all sectors, as opposed to mirroring the S&P 500.

In back-tested studies, the results show returns outperformed by 1.5% annually using Smart IndexingTM  and reduced volatility compared to investing only in the S&P 500.

The weighted average expense ratio of a portfolio of exchange-traded funds in which assets are invested is a very reasonable 0.09%.

Review Personal Capital:
Education Planner

For parents, the Personal Capital Education Planner is a valuable forecasting tool.

It estimates how likely it is that parents or guardians will meet their goals to finance the college tuition of a child.

How It Works

Enter the length of time you expect your child or beneficiary to attend college, and specify how much you would like to spend.

Personal Capital algorithms will then get to work and project how likely it is that you will meet your financial goals.

Socially Responsible Personal Strategy

Like its arch-rival, Betterment, Personal Capital has added socially responsible portfolios to its lineup of products.

The Socially Responsible Personal Strategy® enables customers to invest in companies that make them feel good about where their money is allocated.

For investors who care about environmental, social, and governance factors (“ESG”), and the sustainability practices of companies, Personal Capital now makes it easy to align investments with personal values.

ESG and sustainability data comes from Sustainalytics, a global leader in ESG and corporate governance research so you can have confidence in the integrity of the strategy.

If you elect a Socially Responsible Personal Strategy, the same features apply to your portfolio as with core portfolios, including exposure to all six major asset classes.

It also features Personal Capita’s proprietary Smart WeightingTM methodology to balance exposure to style, size, and sectors within U.S. equity asset classes.

Plus all the benefits that customers enjoy elsewhere still apply to socially responsible portfolios, including:

  • Rebalancing
  • Tax-loss harvesting
  • Tax location
  • Dashboard reporting

Personal Capital Review:
Pros and Cons

Personal Capital sets itself apart from other robo-advisors by connecting clients enrolled in its advisory service to human financial advisors.

Personal Capital ProsPersonal Capital Cons
White-Glove Investment Service: Personal Capital pairs each client with a dedicated human financial advisor who is accessible by email, phone and even video chat. When you invest $200,000 or more, you are assigned two dedicated financial advisors.High Account Minimums: To get started with the Personal Capital investment management service you will need to pony up a minimum of $100,000.
Reasonable Fees: Clients with under $1,000,000 in assets under management pay 0.89% which is higher than some robo-advisor rivals but significantly lower than traditional advisors who typically charge north of 1%.Soft-Sell: When you sign up to the free mobile app, you will be invited to speak with a financial advisor if you have enough money. We found the process to be a soft-sell and not intrusive.
Excellent Support: The customer experience is second to none thanks to dedicated human financial advisors who may be contacted via phone and email, as well as video chat.
Clients with $200,000 or more invested are assigned a second dedicated financial advisor.
❌ Standardized Asset Allocation Models: You are restricted from customizing your asset allocation because standardized models are used.
Free Mobile App & Tools: The Personal Capital app is about as good as it gets when it comes to tracking spending, income, and net worth.
Easy To Use: The user experience is about as intuitive as any online financial tool or robo-advisor service.
Investment Tracking & Reporting: It is simple and fast to “look under the hood” of your portfolio and spot which assets are performing well or poorly.
iOS & Android Compatible: Whether Mac, PC, iPad, iPhone, iWatch or Android device, Personal Capital syncs with them all.
You Index: With the You Index, you can compare how your portfolios are performing compared to standard benchmarks like the S&P 500.
Complete Financial Insights: Unlike some tools which help you track your investments or others which are good for day-to-day budgeting, Personal Capital provides full insights into your overall financial situation.

Personal Capital
Fees & Account Minimums

Personal Capital charges higher fees than pure robo-advisors who offer no human advice but less than the average human financial advisor.

CategoryFees
Account Management Fees
  • 0.89% up to $1,000,000
  • 0.79% for first $3,000,000
  • 0.69% for next $2,000,000
  • 0.59% for next $5,000,000
  • 0.49% for amounts > $10,000,000
Investment Expense Ratio0.09%
(weighted average)
Account Minimum$100,000
Annual, Transfer, Closing FeesNone
Personal Finance ToolsFREE
Mobile AppFREE

Personal Capital
Account Types

Personal Capital will manage the following accounts and will advise on accounts that it will not manage, such as 401(k)s and 529 Plans.

TypeCapability
Individual Non-retirementYES
Joint Non-retirementYES
Roth IRAYES
Traditional IRAYES
SEP IRAYES
Rollover IRAYES
TrustsYES
529 PlanNo
(but will advise)
401kNo
(but will advise)

Personal Capital Tax Strategy

Personal Capital allocates assets across taxable and tax-advantaged accounts to optimize for tax consequences.

TypeCapability
Tax Loss HarvestingYES
(on all accounts)
Tax-advantagedYES

Is Personal Capital Safe?

Personal Capital Security

Users are required to register each device when logging on.

We found that even after registering a computer, Personal Capital looks to validate a user who moves to a different IP address.

For example, if you navigate to the Personal Capital login from a local coffee shop, your identify will be validated again.

All your information is stored as read-only, meaning that even if someone gets a hold of your mobile device and somehow gets past your pin code or fingerprint scanner on iOS devices, they still cannot transfer money from within the Personal Capital app.

The only way Personal Capital could heighten its security is by adding two-factor authentication, which is standard on cryptocurrency digital exchanges, which store your money.

But because your money cannot be accessed via the Personal Capital app, two factor authentication is not as big a concern.

Personal Capital Reviews Summary

Personal Capital is designed for higher net worth, fee-conscious investors capable of meeting the $100,000 account minimum.

Is you wish to avoid the higher fees associated with human financial advisors yet still want to have contact on-demand with a dedicated financial advisor, Personal Capital is your best option.

For those who can’t meet the account minimum, Personal Capital offers an excellent mobile app complete with great tools to evaluate spending habits, recommend asset allocation improvements, and visualize retirement goals.

Few robo-advisors provide the white-glove service offered by Personal Capital. Even those that offer human advice tend not to pair clients with dedicated financial advisors. So the bottom line is you are looking for a top tier service that combines automated investment management with a personal touch, Personal Capital likely has everything you need and then some.

Still not sure? Check out our Personal Capital vs Betterment review.

Bonus: Personal Capital App Review

In addition to its investment management services, the free Personal Capital mobile app is available to anyone. You can download the app from the App Store if you have an iPhone or iPad, or the Google Play store if you have an Android device.

The app syncs with your bank accounts, credit cards, brokerage accounts and other investment accounts so you can easily track travel, entertainment, taxes, loans, personal care, clothing, groceries, and so on.

You can use it monitor spending habits but it’s more than a simple budgeting app because it tracks your assets, liabilities, and net worth too.

Bonus 2: Personal Capital Retirement Fee Analyzer

For fee-conscious investors, the Retirement Fee Analyzer is an excellent tool to help you identify at a glance how much of your money is being lost on pesky fees charged by funds.

It will also inform you how much to modify each asset class holding to match your recommended targets.

And it provides retirement forecasts so you can see what needs to be done to hit your retirement income goals.

personal capital fee analyzer

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