SoFi Wealth Management vs. Personal Capital: Which Robo-Advisor Is Better?

robo advisors investing wealth management

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Along with Betterment and Wealthfront, Personal Capital was one of the early, pioneering robo-advisor companies. But unlike its rivals, Personal Capital focused initially on building a hybrid robo-advisor service, combining human financial advisors with automated portfolio management – as opposed to a purely algorithmic investing solution. Like Personal Capital, SoFi also adopted a hybrid robo-advisor model – although SoFi began as a lending company that specialized in refinancing student loans.

Personal Capital has historically targeted higher net worth individuals. The company serves wealthier investors seeking a more personalized investing experience than is offered by many robo-advisor competitors and charges a premium for so doing. As time goes by, we expect SoFi to increasingly compete with Personal Capital because both vie for similar customers: HENRYs, otherwise known as High Earners Not Rich Yet.

Both SoFi and Personal Capital deliver to customers technology-powered portfolio management in conjunction with human financial advisors but which of the two robo-advisors is best for you: Personal Capital or SoFi?

SoFi Wealth Management Vs. Personal Capital

sofi brokerage trading system investing

personal capital

Comparing SoFi to Personal Capital on fees, account balance minimums, service, features and selection of account types, neither company wins in a clean sweep. SoFi comes out ahead by a large margin on fees and account balance minimums while Personal Capital offers excellent tools and services, including an industry-leading mobile app to monitor spending habits and track budgeting and net worth.

Both SoFi and Personal Capital distinguish themselves from rival robo-advisors by providing access to human financial advisors. Not all robo-advisors include this value-added service. For example, FutureAdvisor and Wealthfront provide purely automated solutions without the hand-holding option for clients who want the comfort of knowing a human advisor is accessible.

Management Fees

SoFi Wealth Management Vs. Personal Capital

Robo-AdvisorManagement FeeAccount MinimumRatingBest forOpen Account
sofi brokerage trading system investingFull Review0.25%$500Low Cost & Live Advisors
personal capital
Full Review
0.49% – 0.89%$100,000Dedicated Financial Advisors

SoFi claims that traditional financial advisors charge on average fees of 1.18% whereas SoFi’s wealth management platform is free to borrowers of its loan products and is available to non-borrowers at a cost of 0.25% of assets managed above $10,000. Below $10,000, it is free to everyone. Personal Capital charges fees of 0.89% up to the first $1,000,000 and steadily decreases its fees for higher invested amounts.

SoFi charges 0.25% of assets under management, which at first glance seems to rival industry leaders, such as Betterment and Wealthfront. But on closer examination it is clear that SoFi delivers more than its competitors for the same cost. While Betterment and Wealthfront offer a basic, automated portfolio management service for similar fees, SoFi includes an added layer of service: live financial advisors. SoFi also provides wealth management free to customers of its loan products and all wealth management customers enjoy free service up to the first $10,000.

By including human advisors in its basic service offering at such low cost, SoFi takes direct aim at Personal Capital. Both companies target higher income earners yet Personal Capital is comparatively a lot more expensive. For assets managed up to $1,000,000, Personal Capital charges 0.89%, which is still quite a bit lower than the fees charged by traditional human advisors, but substantially higher than what SoFi charges. Comparing fees charged by SoFi and Personal Capital on a $100,000 portfolio, SoFi charges $225 while Personal Capital’s fees are $890.

Who Is Better on Fees? SoFi wins in a landslide by charging fees that amount to less than a third of what Personal Capital charges, and by offering free wealth management up to the first $10,000 and to existing borrowers.

Account Balance Minimums

SoFi Wealth Management Vs. Personal Capital

SoFi requires customers to have a minimum account balance of $500 to get started with its wealth management service, or lower if committing to a monthly deposit of at least $100. Personal Capital has a much higher account balance minimum of $100,000.

Personal Capital stipulates one of the highest account balance minimums of any robo-advisor: $100,000. Vanguard comes close to Personal Capital by mandating a $50,000 minimum, but most other robo-advisors have minimums of $5,000, such as at Schwab Intelligent Portfolios, or lower. For clients who meet the minimum balance requirement, Personal Capital assigns to them a financial advisor, and clients with over $200,000 are assigned two dedicated financial advisors.

Prospective customers who wish to try out SoFi wealth management need only $500 to open an account, and even less if they commit to an ongoing $100 monthly deposit. Users can try out Personal Capital at no cost by downloading its excellent mobile app, but $100,000 is still needed to get access to its robo-advisory platform and connect with human advisors.

Historically, Personal Capital could stand firm on its high account balance minimum because its target customer is on the upper end of the wealth spectrum. But time will tell if they maintain this high hurdle or whether competition from SoFi catalyzes a policy change to a lower minimum.

SoFi built a highly successful lending company by targeting super-prime borrowers, who may not yet have amassed a large nest-egg but had high income-earning potential. SoFi knows a thing or two about attracting wealthy customers and so Personal Capital is in the middle of its crosshairs. In essence, SoFi acquires customers early in their careers before they have become wealthy who would otherwise naturally be attracted to Personal Capital as they build their nest-eggs.

Who is Better on Account Balance Minimums? Comparing SoFi to Personal Capital on account minimums leads to another win for SoFi. SoFi’s $500 minimum is a low hurdle compared to the $100,000 minimum imposed by Personal Capital.

Hybrid Robo Service

SoFi Wealth Management Vs. Personal Capital

Personal Capital assigns a dedicated financial advisor to each client with $100,000 invested and two dedicated human advisors to clients investing $200,000 or more. SoFi also includes human advisors in its basic wealth management offering, and connects clients to a team of advisors.

Personal Capital made its name as a robo-advisor by adding a personal dimension to the computer algorithms that manage investment portfolios. Where most robo-advisors, such as Betterment and Wealthfront, strip away human involvement in their basic service offerings, Personal Capital bucks the industry trend towards pure automation by assigning human financial advisors to each client. And Personal Capital takes this white-glove service approach a step further by assigning two dedicated financial advisors to each client investing $200,000 or more.

Live advisors are accessible at SoFi also and are not commission-based, so they are not incentivized to upsell you which ensures that their goals don’t diverge from yours. While SoFi fares well compared to many other robo-advisors, such as SigFig, who doesn’t have a live advisory service, Personal Capital has the edge in providing not just one but sometimes two fully dedicated financial advisors – as opposed to a team of advisors.

Who Provides The Better Hybrid Robo Service? Personal Capital has the edge here because of its white-glove service that assigns dedicated advisors to all account holders and two dedicated advisors to customers investing $200,000 or more.

Account Types

SoFi Wealth Management Vs. Personal Capital

Personal Capital serves individuals who have already acquired a good degree of wealth and have more complicated financial situations comprising lots of account types, such as trusts and 529 Plans to finance college tuitions. SoFi targets high-income earners who are not rich yet (HENRYs) and may not have as complex financial circumstances, hence it offers a reduced selection of account types.

Both SoFi and Personal Capital attract either higher net worth individuals or those who are on a trajectory towards becoming rich. Wealthy individuals often have more involved financial situations, including taxable accounts, retirement accounts, trusts and beneficiaries. For prospective clients who have complex personal finances, Personal Capital is the better choice.

Personal Capital offers a broad selection of account types, including individual and joint non-retirement accounts, Roth, Traditional, SEP and Rollover IRAs, as well as Trusts. 529 Plan and 401(k) account holders can receive advice, though Personal Capital won’t manage those accounts.

SoFi offers comparatively fewer accounts, serving only individuals who have taxable, non-retirement accounts as well as Roth, Traditional and SEP IRAs. Although fewer account options are available at SoFi, its target customers who are early in their careers and have high-income potential can still be well served if they don’t yet have complex personal finances.

Who is Better on Account Types? Personal Capital offers a more diverse selection of account types, catering to a broader audience of both wealthy individuals with taxable, retirement, trust and 529 Plans to finance college tuition, as well as to the customers SoFi targets who are high-income earners but have not yet saved a large nest-egg.

Typesofi brokerage trading system investingpersonal capital
Individual Non-retirementYESYES
Joint Non-retirementNOYES
Roth IRAYESYES
Traditional IRAYESYES
Rollover IRANOYES
TrustsNOYES
Custodial AccountsNOYES
SEP IRAYESYES
529 PlansNONO (but will advise)
401(k)NONO (but will advise)

Tax Loss Harvesting

SoFi Wealth Management Vs. Personal Capital

Personal Capital regularly examines portfolios to seek tax-optimization opportunities. In contrast, SoFi has no tax-loss harvesting in place yet.

Typepersonal capitalsofi brokerage trading system investing
Tax Loss HarvestingYESNO
Free Account RebalancingYESYES

Personal Capital allocates invested assets across both taxable and tax-advantaged accounts in order to make portfolios more tax-efficient. This feature has not yet been adopted by SoFi, though we expect it is only a matter of time before they roll it out.

Both services rebalance portfolios. SoFi does so as needed and does not commit to a regular schedule of rebalancing. If securities held within portfolios move dramatically, SoFi is more prone to make adjustments to keep allocations within weighted norms. Personal Capital monitors accounts daily for tax-efficient rebalancing opportunities.

Who is Better on Tax-Loss Harvesting? Personal Capital seeks to maintain a low turnover approach but all accounts are reviewed daily to optimize for tax-efficiency. SoFi has yet to incorporate tax-loss harvesting into its wealth management offering, and so loses out to Personal Capital here. Both companies monitor and rebalance portfolios as needed, so it’s a tie on that feature.

Overall Winner

SoFi Wealth Management Vs. Personal Capital

Investors with smaller savings available to invest or who cannot meet high account balance minimums imposed by Personal Capital should stick with SoFi, which also charges substantially lower fees. But for those with more complex financial situations, and those seeking tax-efficient portfolios with the added bonus of tracking spending and net worth via mobile devices, Personal Capital has a more suitable and comprehensive suite of tools and services.

SoFi WinsPersonal Capital Wins
Portfolio Management Fees: Personal Capital has some of the highest fees of any robo-advisor firm, starting at 0.89% for amounts up to $1,000,000.
SoFi is much more attractive in offering free wealth management on accounts up to $10,000 and free wealth management to SoFi borrowers.
For amounts of $10,000 and above, SoFi charges just 0.25% while still providing access to a team of human advisors.
Selection of Account Types: Personal Capital attracts higher net worth individuals than most robo-advisors on account of the high level of personalized service it provides and high account minimums. And these clients typically have more complex financial situations, involving numerous account types: taxable, retirement, and Trust. Personal Capital caters to all these and advises on accounts it doesn’t manage, such as 401(k)s and 529 Plans.
SoFi by contrast has far fewer accounts, serving individuals only in taxable accounts, as well as Roth, Traditional and SEP IRAs.
Account Balance Minimums: SoFi has a low $500 account balance minimum that rivals Wealthfront. For clients willing to commit to a $100 monthly deposit, SoFi removes the $500 hurdle.
Personal Capital has a much higher minimum of $100,000, though clients who can meet that threshold are assigned a dedicated advisor.
Human Advisors: Personal Capital is hard to beat when it comes to a white-glove robo-advisory service. Not only is each client assigned to a dedicated advisor, but each client investing over $200,000 is assigned two dedicated advisors.
SoFi does well compared to most other robo-advisors in providing clients access to a team of human advisors, but Personal Capital has the edge.
Free Rebalancing: Portfolio rebalancing is a tie between both companies. Both companies review accounts and monitor to ensure weightings stay within normal ranges.Tax Loss Harvesting: Personal Capital reviews accounts daily to spot tax-efficient rebalancing opportunities. SoFi doesn’t yet provide a tax-optimization service.
Mobile App: Personal Capital has a mobile app that stands head and shoulders above the mobile toolkit offered by most robo-advisors. Even non-customers can use the app completely free to track spending habits, monitor budgeting and assess net worth.

Which Robo-Advisor Is Best For You: SoFi or Personal Capital?

Investors seeking a hands-off automated investing solution yet also want to connect with financial advisors on-demand will be pleased with both SoFi and Personal Capital. Personal Capital has the edge when it comes to the higher tier of service offered, including dedicated advisors, a broader selection of account types, free tax-loss harvesting, and an industry-leading free mobile app to track spending, budgeting and net worth.

Existing SoFi borrowers will find it hard to migrate elsewhere because of SoFi’s compelling value proposition of free wealth management to SoFi borrowers. Anyone wishing to invest up to $10,000 can enjoy free wealth management too. For amounts above that threshold, SoFi charges much lower fees of 0.25% of assets managed compared to Personal Capital, which starts its fee schedule at 0.89% and lowers it only for amounts above $1,000,000.

  

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