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Personal Capital Review

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Personal Capital

Personal Capital Advisors Corporation calls itself a “whole new way to manage your money.” Many may take that to mean that it is a robo-advisor. But the firm is actually a human advisory with a tech side, which is to say that in addition to services offered by traditional firms, Personal Capital offers online portfolio management as well as free financial tools through its app. Clients at the $100,000 to $200,000 investment level have access to a team of advisors, those at the $200,000 to $1 million level get a dedicated financial advisor and investors with more than $1 million have access to a certified financial planner (CFP), other financial advisors, the investment committee, private equity and hedge reviews and more. 

Best for

Tech-savvy investors who want customized services from humans

Drawbacks

Higher management fees for automated services at the low end of investor assets

Pricing: How Much Does Personal Capital Cost?

Option Name Management Fee Minimum Balance Features
Investment Service 0.89% $100,000 Access to free online tools and team of financial advisors, tax-loss harvesting
Wealth Management 0.89% $200,000 Dedicated financial advisor, full financial plan, customizable stocks and ETFs
Private Client 0.89% for first $1 million invested $1 million Priority access to advisors, full financial plan, banking services, customizable stocks, bonds and ETFs

Investment Service

Management Fee
0.89%
Minimum Balance
$100,000
Features
Access to free online tools and team of financial advisors, tax-loss harvesting

Wealth Management

Management Fee
0.89%
Minimum Balance
$200,000
Features
Dedicated financial advisor, full financial plan, customizable stocks and ETFs

Private Client

Management Fee
0.89% for first $1 million invested
Minimum Balance
$1 million
Features
Priority access to advisors, full financial plan, banking services, customizable stocks, bonds and ETFs

Anyone who signs up can use the free financial planning and investment tools. If you want to use the company’s advising services, however, you will need to invest a minimum of $100,000.

Personal Capital's management fees follow a tiered schedule, where the annual percentage rate goes down at higher fund levels. For accounts with up to $1 million, the management fee is 0.89%. For larger accounts, the fee for the first $3 million is 0.79%. For the next $2 million, it's 0.69%, and for the next $5 million after that, it's 0.59%. For assets more than $10 million, the fee is 0.49%.

At the low end of assets ($100,000 to $200,000), the management fee may seem high compared to other automated investment platforms. But you are also getting access to a team of advisors, which non-hybrid robo-advisors do not offer. At the asset level above $200,000, even the highest fee of 0.89% is significantly lower than the management fees charged by traditional financial advisors.

Personal Capital's Investing Strategy

How does Personal Capital invest your money? Like other firms that follow Modern Portfolio Theory, Personal Capital believes that asset allocation is key to superior returns and seeks to minimize risk by diversifying portfolios across multiple asset classes. It uses a proprietary index weighting approach to ensure, it says, “exposure to all areas of the U.S. stock market while avoiding being overweight to high-risk segments.” 

Portfolios with less than $200,000 are invested in exchange-traded funds (ETFs) only. Accounts with $200,000 to $1,000,000 are offered customized solutions that include securities and ETFs, while high-net-worth investors who meet certain criteria have access to private equity offerings.

Personal Capital Homepage

The current account types available include: individual and joint non-retirement accounts, traditional IRA, Roth IRA, SEP-IRA, rollovers IRA and trusts. Though Personal Capital does not offer 529 or 401(k), it can advise you on either.

Supported Accounts

  • Individual and joint non-retirement accounts
  • IRA
  • Roth IRA
  • Rollover IRA
  • SEP-IRA
  • Trusts

Unsupported Accounts

  • 401(k)
  • 529

Key Features

Personal Capital’s biggest feature is… humans! Many automated advisors offer online services with no access to human financial advisors. As noted earlier, Personal Capital offers advisory services provided by humans - and augmented by technology. This is especially the case as account balances rise above $200,000 and access to services increases. All advisors - 233 inhouse advisors at last count - are available via email, phone and video chat.

 

Personal Capital Dashboard

All accounts use tax-loss harvesting, which is a common portfolio management practice. The purpose of tax-loss harvesting is to minimize your tax payments by offsetting the gains in your account with losses from selling underwater investments.

The DIY investor will like the free financial tools offered to account holders. It costs nothing to open an account and there is a free mobile app, even if you don’t invest through Personal Capital. You can link your other accounts to Personal Capital to receive analysis on your budget and retirement savings and advice for balancing your portfolio.

Who Personal Capital Is For

The minimum required investment is $100,000. This probably eliminates many rookie investors. However, you can create an account and use its financial planning tools for free. This puts Personal Capital in a unique position because it will attract investors who are on opposite ends of the spectrum. One side is the investor with a high net worth - people who are potentially looking to manage millions of dollars. On the other end of the spectrum is the DIY or low-net-worth investors who want to take advantage of the company's free financial tools without paying for its services provided by human advisors.

If you have more than $200,000, this firm may be a great choice. Your accounts are automatically managed, which means you can sit back and let Personal Capital do all the heavy lifting. At the same time, you get access to human financial advisors and their customized solutions. Additionally, Personal Capital’s fee is all-inclusive, meaning you aren’t charged separately for brokerage and custodial services.

So you'll get a lot of bang for your buck if you are an investor with at least $200,000 and you want the benefits of both online services and a human advisor. However, Personal Capital will also appeal to the DIY investor. Creating an account is free, as is the mobile app. With an account you have access to a number of free financial tools that could help you to manage a portfolio on your own. All you need to do is link your other accounts to your Personal Capital account.

Then you can get a breakdown of all your expenses into spending categories like groceries, restaurants, clothing, loans and taxes. More than just budgeting, you can get analysis of your portfolio to find out how much you should increase or reduce each asset class in order to match Personal Capital’s recommended targets. You can also evaluate and forecast your retirement savings to know what you need to do in order to meet your goals. You won’t have access to human advisors with a free account, but the tools may be enough for serious DIY investors.

That said, if you have at least $25,000 to invest, you may want to consider getting a human advisor instead. You can use SmartAsset's financial advisor matching tool to find a local advisor who suits your needs. To learn more about different individual advisors in your area, explore SmartAdvisor Match.

Available Features

  • Human Advisors
  • Tax-Loss Harvesting
  • Automatic Rebalancing

Unavailable Features

  • Direct Indexing
  • Fractional Shares

How Personal Capital Works

Opening an account is free. You can also download and use the mobile app. If you are looking to use the free financial tools, this account is all you will need.

If you want to invest through Personal Capital, you will need at least $100,000 to open a paid account. Your management fee will depend on how much you invest. See the pricing section above to learn more about management fees. When you open a paid account, you will have multiple retirement and non-retirement account types to choose from.

Personal Capital Graph

Once you create an account, whether free or paid, you will have access to your dashboard. The dashboard lets you track things like your spending, saving, net worth, portfolio balances and the movement of ETFs within your portfolio. Link your other bank and investment accounts with Personal Capital and you can also track them through the dashboard. The company promotes the idea of having all your financial information in one place.

What’s the Catch?

Because of its automated investment services, Personal Capital straddles both the digital wealth management and traditional advisor worlds. If you compare its fees to the former’s fees, they seem high. This makes sense, since you are also paying for access to human advisors. On the other hand, if you compare its fees to traditional advisors’ fees, they seem decent and even low, especially since they are all-inclusive, which means you aren’t charged separately for trade transactions and custodian services.

Personal Capital’s minimum of $100,000 is out of reach for many of people. If you can afford the minimum but don’t have at least $200,000, you may be better served using a robo-advisor (since Personal Capital would put you in ETFs, too) or a traditional advisor who will be dedicated to your account, regardless of you account size. 

Competition: How Personal Capital Stacks Up?

Personal Capital is targeted to high-net-worth investors. Those with over $1 million to invest will benefit from the low fees and additional services. Investors at the $200,000 to $1 million level will also benefit from the low fees and comprehensive financial planning services. But investors with less than $200,000 may be better off going with a traditional advisory that doesn’t have augmented technology or with a robo-advisor, depending on their priorities.

If you don’t need a human connection, Wealthfront offers a management fee of 0.25% to all investors. It has a minimum of just $500 so it is within reach for more people. Wealthfront also offers tax-loss harvesting to all investors like Personal Capital. One difference is that Wealthfront offers direct indexing to accounts with at least $100,000. This is a more advanced form of tax-loss harvesting that looks at the movement of individual stocks, not just a fund as a whole, in order to decrease your tax bill further. Accounts with at least $500,000 have access to an improved form of smart beta, an investment strategy that considers multiple factors when choosing the best stocks to buy for your portfolio.

If access to human advisors is important, Betterment now offers part-time access to advisors. The Betterment Premium plan provides unlimited phone consultations with financial experts. This plan has a minimum balance of $100,000 and the management fee is 0.40%. This fee is significantly lower than the Personal Capital fees with the same minimum payment. The difference is that Personal Capital offers an unlimited number of consultations and offers more ways to contact advisors.

Another similar service is Vanguard Personal Advisor Services. Vanguard is well-known as one of the largest mutual fund managers but it also offers advisor services to accounts of $50,000 or more. Investors have access to a team of human advisors and get a dedicated advisor when they pass the $500,000 threshold. Vanguard management fees start at 0.30% and go down to just 0.20% if you have more than $5 million invested or 0.10% if you have more than $10 million. However, these fees are not all-inclusive like Personal Capital's. Also, Vanguard Personal Advisor Services doesn’t have tools as comprehensive as Personal Capital’s and its tax-loss harvesting is more limited.

As low as robo-advisor fees are compared to traditional advisor fees, DIY investors could save money by creating and monitoring their own portfolios instead of using a paid service. Unlike many other competitors, Personal Capital allows you access to its financial tracking and planning software even if you don’t invest with it. 

 

Service Management Fee  Minimum Balance  Best For
0.49% - 0.89% $100,000
  • Clients with large sums to invest
  • Investors who want access to human advisors
 
  0.25% - 0.40%  $0 
  • First-time investors with low savings balances
  • Goal-based investors
   0.30%  $50,000
  • Investors with large sums to invest

  • Clients who like Vanguard mutual funds and ETFs

 

Bottom Line: Should You Use Personal Capital

Personal Capital offers a lot of bang for your buck if you have at least $200,000 to invest and want the advantages of both human advisors and online services. DIY investors will also benefit from its free mobile app and its array of financial planning tools. People who are investing around the minimum ($100,000 - $200,000) may want to go the simple robo-advisor route to save money - or the old-school advisor route if they are not tech-savvy.

Tips for Finding an Advisor

  • Finding the right financial advisor who fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • When choosing a financial advisor, keep your goals and needs in mind. Are you putting a child through college while also saving for a new home? Find an advisor who can help you with that. It helps to ask advisors questions about their credentials and experience to better determine whether they’re right for you.
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