Personal Capital Review: A Free Wealth Management Tool

Personal Capital is a free financial dashboard that can track every aspect of your finances. We’ll look at how this personal finance software works in our Personal Capital review.

Personal Capital

Personal Capital
9.5

Design

10.0 /10

Investment Tracking

9.5 /10

Cash Flow Tracking

9.0 /10

401k Fee Analyzer

10.0 /10

Retirement Planner

9.0 /10

Pros

  • Budgeting and investment management on one platform
  • Free financial dashboard
  • Investment tracking
  • Socially responsible investing available

Cons

  • High minimum for Wealth Management
  • Solicitation
  • High fees
  • Limited budgeting capabilities

Table of Contents

Personal Capital has risen to become one of the most popular financial management platforms available. It comes in two versions, the Free Financial Dashboard and the Wealth Management service. The free version is primarily a budgeting application, but it provides abundant tools for investing. The wealth management version is a full investment management service, working somewhat like a robo advisor, but providing a generous amount of live support from financial advisors.

About Personal Capital

 

Personal Capital is used by nearly two million people, who primarily use the free version. But the wealth management service takes in more than 18,000 clients, who have more than $8 billion in assets under management. The company was founded in 2009, and is headquartered in San Carlos, California.

Most users start out with the free version, then upgrade to the wealth management service if they want direct investment management of their investment portfolios. But even if you don’t upgrade, the free version offers so many investment tools it’s worth having for those alone.

How Personal Capital Works

As noted at the beginning, Personal Capital offers two versions, the Personal Capital free Financial Dashboard, and Personal Capital Wealth Management. While they’re related services, they provide very distinct functions. Let’s take a look at each individually.

Personal Capital Free Financial Dashboard

Though this version is often seen primarily as a budgeting app, it’s actually fairly limited in that regard. However, the investment tools are extensive. Even if you have no intention of using Personal Capital for budgeting, the free version will provide valuable investment support.

The dashboard serves primarily as a financial aggregator, where you can include all your accounts. That includes investments, savings, checking, loan accounts and credit cards. It allows you to assemble your entire financial life on a single platform. You can even include any employer-sponsored retirement plans you have–in fact, this is the free version’s specialty.

Personal Capital dashboard

Dashboard

The free Financial Dashboard offers the following capabilities:

Budgeting. You can use the free version to track your cash flow and spending patterns. You can also analyze your spending categories and individual transactions. You’ll get monthly summaries, helping you to know exactly where your money is going. However, if you’re looking primarily for budgeting software, you probably won’t use Personal Capital. For example, while the platform provides alerts of upcoming bills, it does not provide a bill payment function. You will have to continue to pay your bills directly from your bank accounts.

Cash Flow Analyzer. This tool creates a budget for you. Once setup, it tracks your income and expenses from the different financial accounts you’ve linked to the platform. You can then set financial goals, like preparing for retirement, or paying off debt. The analyzer will help you develop strategies to reach your goals.

Personal Capital Cash Flow Analyzer

Cash Flow Analyzer

Despite the Personal Capital Financial Dashboard’s limits on the budgeting side, it’s an excellent service when it comes to investment management. It offers the following investment tools:

401(k) Analyzer. Millions of people participate in employer sponsored retirement plans. But few are aware of the investment fees that are hidden in those plans. The analyzer will show you exactly what each fund in your plan is costing you. It will then suggest alternative allocations into lower cost funds.

Retirement Planner. The planner uses a series of “what if” scenarios, to help you determine if you’re on track with your retirement goals. You can adjustment for changes in your situation, such as a job or career change, the birth of a child, or even saving for college. It takes into account outside factors that can have an impact on retirement.

See also: Review of Personal Capital’s Retirement Planner

Investment Checkup. This might be the most important investment tool of all. Once you aggregate your investment accounts on the platform, this tool will help you to optimize those accounts. It can recommend adjusting your portfolio mix to improve your overall investment performance.

Net Worth Calculator. By tracking your assets and liabilities, you can quickly determine your net worth. That’s important, because net worth is the most significant number in determining your overall financial strength.

Personal advisor. Even though the Financial Dashboard is free to use, you’ll still have the ability to contact a personal advisor. The advisor won’t be able to provide investment advice, but they can help you with questions regarding the service, as well as provide additional information on any recommendations made by Personal Capital.

Try it out: Personal Capital’s free financial dashboard

Personal Capital Wealth Management

Personal Capital Wealth Management is sometimes grouped with robo advisors, which isn’t entirely true. While they do use significant automated investment tools, there’s also a very strong element of active human management. That really puts the service somewhere between traditional human investment advisors and robo advisors.

Similar to robo advisors, Personal Capital starts by determining your risk tolerance, investment goals, and time horizon. But they also consider your personal preferences in constructing your portfolio. Your portfolio is managed according to Modern Portfolio Theory (MPT), by investing across multiple asset classes for proper diversification. They also rebalance your portfolio periodically to maintain target asset allocations.

Your portfolio is invested in six asset classes:

  • U.S. stocks
  • U.S. bonds
  • International stocks
  • International bonds
  • Alternative investments, including real estate investment trusts, energy and gold
  • Cash

The specific percentage of your portfolio in each asset class will depend on your investor profile, as determined by your risk tolerance, investment goals, time horizon and personal preferences.

Each asset class is invested in a low-cost index-based exchange traded fund (ETF), to provide broad market exposure at a low expense ratio. However, the U.S. equities portion will be held in a well-diversified sample of at least 70 individual stocks. This allows Personal Capital to provide tactical weighing and tax optimization (read on for an explanation of both services).

Investment performance. Wealth Management publishes its investment performance on the website. The performance through 2018 is as follows:

Personal Capital Benchmark Performance

Wealth Management Performance

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Wealth Management’s Investment Strategies in Greater Detail

Tactical Weighing. This is an investment approach that improves on traditional indexing by maintaining more evenly weighted exposure to each sector and style. Back tests have indicated the strategy outperforms the S&P 500 by 1.5% per year, and with lower volatility.

Tax optimization. This is an investment strategy designed to lower the income tax liability resulting from your investing activities. It’s a strategy using several techniques:

  1. Using ETFs rather than mutual funds, since they generate far less in terms of capital gains.
  2. Using individual stocks, since they can be easily bought and sold to generate tax-loss harvesting.
  3. Tax allocation is employed in which income producing assets are held in retirement accounts, while capital gains generating assets are held in taxable accounts to take advantage of lower long-term capital gains tax rates.

Socially Responsible Investing (SRI). If you choose to incorporate SRI into your investing activities, specific investments are chosen based on their compliance with what is known as environmental, social and governance, or ESG.

This means investments are chosen in companies based on their environmental impact, social impact (diversity and labor relations), and management. Management, or governance, is determined by management structure, board independence, and executive compensation levels. This will give you an opportunity to invest in what you believe in, while avoiding what you don’t.

Personal Capital Wealth Management Features

Minimum initial investment: $100,000 ($200,000 for regular access to financial advisors)

Accounts available. Joint and taxable investment accounts; traditional, Roth, SEP and rollover IRAs; trusts; advice only on 401(k) and 529 plans

Account custodian. Your Wealth Management portfolio will be held with Pershing Advisor Solutions, one of the largest investment custodians and clearing agencies in the world. The company acts as custodian for more than $1 trillion in assets worldwide.

Account protection. All accounts are protected by SIPC, for up to $500,000 in securities and cash, including up to $250,000 in cash. This coverage protects you against broker failure, and not against monetary losses due to market fluctuations.

Financial advisors. This is a major part of the Wealth Management service. Financial advisors are available by phone, email, live chat, or web conference on a 24/7 basis. As a client of the Wealth Management service, you’ll have two dedicated financial advisors. They’ll provide you with full financial and retirement planning, as well as college savings, and financial decision support on such topics as insurance, home financing, stock options, and even compensation.

Personal Capital Wealth Management Fees. Fees for Personal Capital Wealth Management are as follows:

Asset under management Annual advisory fee
Up to $1 million 0.89%
First $3 million* 0.79%
Next $2 million* 0.69%
Next $5 million* 0.59%
Over $10 million* 0.49%

*Applies to clients who invest $1 million or more.

Personal Capital Wealth Management Private Client Service

As you’ll see in the screenshot below, Personal Capital’s services have four levels:

  1. Free – the Financial Dashboard
  2. Investment Service – the basic investment tools and services provided as part of the Financial Dashboard (meaning the Free and Investment Service are both part of the same service level)
  3. Wealth Management – for investors with at least $200,000 to invest
  4. Private Client – for investors with over $1 million to invest

Private Client provides a higher level of service for higher asset clients. In addition to offering lower annual advisory fees, you also get priority access to a certified financial planner and other financial professionals, private banking services, estate services, and collaboration with an estate attorney and CPA.

Investment Options

Personal Capital Options

Additional Personal Capital Features and Benefits

Customer service. You can reach Personal Capital by either phone or email, 24 hours a day, 7 days a week. This applies to both the free version and the Wealth Management service, but the Wealth Management service also comes with access to two live financial advisors.

Mobile App. The mobile app is available for iOS and Android devices, as well as Apple Watch, and can be downloaded at the App Store or on Google Play.

Data export features. There is currently no capability to print reports from the Personal Capital application. They promise the capability is in the pipeline, but cannot provide an estimated time of arrival.

However, you can export transactions, but the capability is limited only to the web application. To do so, you need to log into the website using either Chrome or Firefox. You then navigate to Transactions/All Transactions, then click on CSV to export the transactions.

Security. Personal Capital uses the following security measures:

  • The platform is read-only, so no withdrawals or transfers can be made
  • Two-factor authentication
  • Requires you to register any devices you use to access the platform
  • Military-grade encryption (256-bit AES) to keep your data secure
  • Firewalls and perimeter security
  • Continuous monitoring
  • Fingerprint scanning is available for iOS devices (but not Android)

Try Personal Capital for Free

How to Sign Up with Personal Capital

You can sign up for Personal Capital through the website. You start by providing your email and phone number, then creating a password.

You’ll then be asked general information, including your name, age, age at which you plan to retire, and the amount of money you have saved toward retirement. (As indicated throughout this review, Personal Capital has a strong orientation toward retirement.)

Once you’ve completed that information, you’ll begin linking your accounts. Personal Capital syncs with more than 12,000 financial institutions, or you can simply enter your institution’s name and web address. Personal Capital will analyze your financial accounts going back from one to three months. Based on the analysis, you’ll have access to all the tools on the Free Dashboard, as well as Personal Capitals recommendations for your investment accounts.

If you want to sign up for the Wealth Management service, you can contact a financial advisor to get the process going (or wait a short while, and one will contact you). You’ll be required to provide additional information, including documentation verifying your identity. You will then need to link one or more financial accounts to transfer funds into your Pershing account, which will hold your investments. Personal Capital also allows you to transfer securities from other investment platforms.

You’ll complete a questionnaire that will determine your risk tolerance, investment goals and time horizon. But you’ll also have a web conference with a financial advisor, where more specific information will be gathered. Your portfolio will be created based on your answers to the questionnaire, as well as the information provided to the financial advisor.

Personal Capital Pros and Cons

Pros:

  • Budgeting and investment management on one platform: Personal Capital offers both personal financial management/budgeting, plus investment management on the same platform.
  • Free financial dashboard: The Financial Dashboard includes a large number of investment tools as well as budgeting capabilities, and is free to use. It will also provide investment advice for accounts beyond your Personal Capital Wealth Management account.
  • Tax optimization: The Wealth Management service uses extensive tax optimization strategies to minimize the income taxes generated by your investments.
  • Financial Advisors: The Wealth Management service provides two financial advisors for each client, who can help you manage your entire financial life.
  • Socially responsible investing: If you consider yourself socially responsible and you want to make sure your investment align with your values, you can do that with Personal Capital.

Cons:

  • High minimum for Wealth Management: The minimum initial investment required for the Wealth Management service is $100,000, which will eliminate small and most medium size investors.
  • Solicitation: If you sign up for the free version you will be solicited to upgrade to the Wealth Management service. Some users and readers have described this as “annoying”.
  • High fees: The fee of 0.89% most investors will pay for the Wealth Management service is much higher than robo-advisors, like Betterment and Wealthfront, who charge from 0.25% to 0.40%. But it does need to be pointed out that Personal Capital provides investment management services closer to traditional human investment managers, rather than robo advisors.
  • Limited budgeting capabilities: The budgeting capabilities of the platform are much more limited than fully dedicated budgeting apps, like Mint, Quicken and YNAB.

Try Personal Capital

FAQs

Question: How do I know Personal Capital Wealth Management won’t trade my account just to generate fees for the company?

Answer: Personal Capital is a fiduciary. As such, they must act on behalf of your own personal interests. As well, there are no trading commissions, and no hidden fees of any kind. The annual advisory fee is the only fee you will pay.

Question: Does Personal Capital’s Wealth Management advisory fee apply to all the investment accounts I have on the Financial Dashboard?

Answer: Any accounts you link on the Financial Dashboard are included for free. The advisory fee applies only to the portion of your investments that are directly managed by Wealth Management. For example, if you include a total of $1 million on the Financial Dashboard, but only $400,000 is managed by Wealth Management, the advisory fee will apply only to $400,000, not to $1 million. The Financial Dashboard can still be used to analyze your other accounts, and make recommendations. This includes any employer sponsored retirement plans you have. Since Wealth Management doesn’t manage the account directly, there is no fee for including it in the Dashboard.

Question: How does Personal Capital’s Wealth Management differ from true robo advisors?

Answer: The Wealth Management service does use technology to manage your portfolio. That includes a large degree of automated investing, including periodic rebalancing. But Personal Capital departs from pure robo advisors in that they will customize your portfolio based on your own circumstances and preferences. For example, you do complete a questionnaire when you sign up for the service, just as you would for a robo advisor. But your portfolio allocation will also be decided by input from your financial advisor, based on your personal interview.

Question: Why should I invest my money with Personal Capital when their annual advisory fee is so much higher than just about all the robo advisors?

Answer: The higher fee with Personal Capital is due to a much higher service level. Not only do you have direct access to two financial advisors, who will help in both creating and modifying your portfolio going forward, but they’ll also provide holistic financial advice. That means they’ll help you with financial decisions that go beyond your investment portfolio. This can include estate planning and help with other financial situations, such as a home purchase or buying the right amount of insurance. Robo advisors don’t provide that level of service.

Should You Sign Up with Personal Capital?

One of the factors that makes Personal Capital unique as a financial platform is that it operates as both a financial management service and an investment management service. We’ve provided the table below comparing Personal Capital with popular budgeting and robo advisor apps to give you a side-by-side view of what each offers:

Category Personal Capital YNAB Quicken Mint Betterment Wealthfront
Budgeting Yes Yes Yes Yes N/A N/A
Bill payment No No Yes No N/A N/A
Online synchronization Yes Yes Yes Yes N/A N/A
Reconcile transactions No Yes Yes No N/A N/A
Investment tracking Yes Yes Yes Yes N/A N/A
Credit score monitoring No No Yes Yes N/A N/A
Fee for budgeting $0 $6.99 per month $34.99 to $99.99 per year $0 N/A N/A
Minimum investment $100,000 N/A N/A N/A $0 $500
Advisory fees 0.89% up to $1 million (lower on higher balances) N/A N/A N/A 0.25% up to $100,000, then 0.40% 0.25% on all balances
Financial advice Yes N/A N/A N/A Limited No
Accounts available Joint and taxable investment accounts; traditional, Roth, SEP and rollover IRAs; trusts N/A N/A N/A Joint and taxable investment accounts; traditional, Roth, SEP and rollover IRAs; trusts Joint and taxable investment accounts; traditional, Roth, SEP and rollover IRAs; trusts
Mobile app Android & iOS devices Android & iOS devices Android & iOS devices Android & iOS devices Android & iOS devices Android & iOS devices
Invest in individual stocks Yes N/A N/A N/A No Yes

Personal Capital works for high net worth investors, who are looking for comprehensive personal financial management. They offer investment services comparable to robo advisors, but also provide direct big picture advice.

If you’re looking only for a budgeting service, Personal Capital will not be the best choice. You’ll be better served by YNAB, Quicken or Mint. Mint is also a free service, but it includes credit score monitoring. And while YNAB and Quicken are paid services, both reconcile transactions, while Quicken provides bill payment and credit score monitoring.

If you don’t have at least $100,000 to invest, you won’t be able to use the Personal Capital Wealth Management service. But if you do meet the minimum investment requirement, but just want automated investment management, and not overall financial advice, you may be better off working with a true robo advisor.

Wealthfront can manage your portfolio for an annual fee of just 0.25%, while Betterment charges just 0.40% on portfolios over $100,000. The difference in the annual fee can have a substantial impact on your long-term investment performance.

Personal Capital has a real advantage over traditional human investment advisors, who charge anywhere from 1% to 1.5% to manage your portfolio. If you’re looking for a similar service level, but you don’t want to pay those high fees, Personal Capital is definitely the way to go.

Considering all that Personal Capital has to offer, this is an investment platform that is well worth checking out.

Try Personal Capital for Free

Topics: Investing

19 Responses to “Personal Capital Review: A Free Wealth Management Tool”

  1. I too was not thrilled to receive calls from some guy who had been designated as “my” personal advisor. His picture and name even showed up on my account with an urging to talk various things over with him. I love the platform, the 360 degree view if your financial picture but it bothers me that they don’t even ask your permission before they let their financial advisors look into your accounts. I’m on the fence whether I’ll stay with them or move to mint or quicken.

  2. Michelle

    I was looking for something I could balance my checking account, keep an eye on my overall spending, create a useful budget etc. After reading the glowing review regarding Personal Capital, I decided to give it a try. The last budgeting software I used was Quicken. I tried everydollar, however it didn’t sync with my credit union. Long story short, I was very disappointed with Personal Capital. At first I was very concerned about web based program requiring all of my passwords. Then accounts wouldn’t sync. I didn’t see any useful budgeting tools. I just want to know where I’m spending my money and better manage my savings. This program gets an F grade from me!!!

    • Hello Michelle,
      I seldom make comment to an online post or opinion, however in this instance I must … your comments regarding Personal Capital have no merit other than to point out your unrealistic expectations of an A+ company.
      Having used Personal Capital since 2012 I assure you Personal Capital is an OUTSTANDING company! Their wealth management services are above reproach and their fiduciary commitment to their clients is second to none. So…
      Your comments indicate the company feel short of your expectaions. However, it is also apparent from your comments that your expectaions were not in keeping with the services the company provides.
      The review above, that apparently prompted your comments, clearly stated… “If you’re looking only for a budgeting service, Personal Capital will not be the best choice. You’ll be better served by YNAB, Quicken or Mint.” And was100% correct in saying, “Personal Capital works for high net worth investors, who are looking for comprehensive personal financial management. They offer investment services comparable to robo advisors, but also provide direct big picture advice…If you don’t have at least $100,000 to invest, you won’t be able to use the Personal Capital Wealth Management service…Personal Capital has a real advantage over traditional human investment advisors, who charge anywhere from 1% to 1.5% to manage your portfolio. If you’re looking for a similar service level, but you don’t want to pay those high fees, Personal Capital is definitely the way to go.
      In short, Personal Capital is not a budgeting service. The company is quite clear about their role as an investment and wealth manager. And again, in that role they are second to none.
      Sincerely Submitted,
      Zeke

  3. I tried their pay service and was not happy. The level of service is poor for the fee they charge and my portfolio under performed the market significantly. After using them for a year I left and just took a simplistic investment approach of index funds.

      • 2017LeeP

        My experience is that they are extremely responsive to any time you log in to their system (you will get a call the moment you log in) when they are trying to sell you; however, when you do open an account and are provided access to two (2) advisors, they are still spending most of their time calling the Users who have not yet signed up for the service and are just using the software for free. Have been using their actual services for nearly a year now. I am below combined returns over period of time, i.e. my performance is worse than S&P, foreign and bonds (their measurements), you need to make an appointment to speak with someone and it can take a week or more, and the last time I spoke with my “advisor” they passed nothing on to the individual who actually manages my account. Absolutely nothing. I am going to move, I just haven’t figured out where yet.

      • 2017LeeP

        My experience is that they are extremely responsive to any time you log in to their system (you will get a call the moment you log in) when they are trying to sell you; however, when you do open an account and are provided access to two (2) advisors, they are still spending most of their time calling the Users who have not yet signed up for the service and are just using the software for free. Have been using their actual services for nearly a year now. I am below combined returns over period of time, i.e. my performance is worse than S&P, foreign and bonds (their measurements), you need to make an appointment to speak with someone and it can take a week or more, and the last time I spoke with my “advisor” they passed nothing on to the individual who actually manages my account. Absolutely nothing. I am going to move, I just haven’t figured out where yet. When searching for reviews of PC, I mostly see reviews of the free software and not on the actual performance of the services provided for the higher fees. Discussion, yes, of what you get for a higher fee, but no actual reviews of the quality of the services.

  4. W H Thompson

    I am looking for an alternative to Quicken. THIS is not an alternative. It is a sales programs for investment management. I can not see how the author can consider this a good alternative to QUICKEN as Quicken’s main feature is to handle checkbooks, credit cards, loan and assets. I am VERY disappointed is that this it the author’s NUMBER ONE recommendation QUICKEN.

    • I use Quicken to balance my checkbook and would like to be able to do it on my phone as I go. The Quicken mobile app has terrible reviews, so I am stuck looking for an alternative. Everything I find is for investments, 401K, budgeting, etc. Isn’t there anything out there that is just for balancing checkbooks?

      • Mr. Consumer

        try out everydollar, it’s free to use and you can track your daily transactions. been using it almost a year now and been pretty happy. it’s fairly basic, there may be some paid better alternatives out there

    • I am pleased to find these more candid comments about Personal Capital. I’ve been using Quicken for nearly 40 years. Rob Berger’s glowing review of PC as a substitute for Quicken caused me to take a look.I agree with the praise for the beautiful screens and the investment overview. I was not pleased, to say the least, with the incessant phone calls pressuring me into subscribing for their premium service. Moreover, I was alarmed to learn that their sales agents had complete access to all details of the financial data that I had entered into PC. What’s more, I found it very lacking in ability to manage standard day to day bill payments. I have since closed my PC account and am sticking with Quicken, at least until I find a replacement that serves my needs.

      • thanks for your review. be nice to know what you found as a Quicken alternative. I’m not having much luck. Q bill pay and funds xfer may be the one feature not available elsewhere and the thing I’ll miss the most. Otherwise, I only need to track accounts in one place. I don’t need budgeting or investment advice, I’m not stupid. thanks again.

  5. Andy Schroder

    Personal Capital sucks. I used it for a few months and everything was fine when I had debt and not much money in my bank account. When things turned around for me and I had money in my accounts I started getting all these emails from a financial advisor. I felt my privacy had been invaded. I deleted my account. I don’t want these parasites and vultures after me and my money.

  6. Joseph T Busfield

    Everyone likes Personal Capital – except me. After trying PC for a while, I started receiving sales calls for their “financial advisors” services. Apart from being being bitten twice by financial advisors and being happy with self directed Vanguard funds in my SEP, I was not inclined to give up almost 1% for services. And they wanted me to move at least a quarter of my savings to PC so they could invest in individual stocks they thought worthy. No thanks!! I deleted my account to stop the annoying calls. So far so good. Beware, be very aware of the sales goals!!

  7. The platform is excellent, the best I’ve seen of its type. Much like Mint only better in a number of areas. But I was continually uncomfortable with the idea of allowing access to my login information. The frequent hacking of reputable, well-known companies with longer histories than Personal Capital only exacerbates that discomfort. When you add in the nagging to become a premium member, to take calls with an advisor, to meet in person etc this became more trouble than it was worth. I like the platform, specifically the ability to have all accounts viewable in one place, but the tradeoffs were too high. Possibly better off with Banktivity (used to be iBank) for Mac or a Quicken or similar for PC.

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