Personal Capital Review: Why You Should Use It Too

In this Personal Capital Review, we will tell you all you need to know about the personal finance platform that is taking the investment world by storm.

If you are looking for a free personal finance tool to help you make sense of your finances, Personal Capital might just be that tool.

Personal Capital is an online wealth management and financial advisory company.

Founded in 2009 by Louie Gasparini, Paul Bergholm, Bill Harris, and Rob Foregger, the company provides an impressive array of personal finance products, most of which will be featured in this Personal Capital review.

More About Personal Capital

In 2014 and 2015, CNBC named Personal Capital as one of the 50 most disruptive companies in the country. With over $11.6 billion in assets under management, Personal Capital is truly a force to reckon with; especially considering the company was only founded in 2009.

Personal Capital has a free and a paid version. Though Personal Capital provides great value for the free service it provides, it also uses the free services as a means to generate leads for its paid version.

With over 28,000 investment clients in all 50 states, and an additional 2.5 million people using the platform to plan their financial lives, it might be worth your while to check them out and see what the noise is all about.

The company has an innovative award-winning dashboard that makes it easy to understand you whole financial picture at a glance.

The company has its headquarters in Redwood City, California. It also has offices in San Francisco, CA, Denver, CO, Dallas, TX and Atlanta, GA.

How Does Personal Capital Work?

What Services Does Personal Capital Provide?

Personal Capital provides an array of award-winning services designed to reduce the stress of meeting your financial goals and tracking your financial affairs. Prominent among those services are the ones listed below:

• Investing
• Wealth Management
• Banking: Personal Capital Cash
• Retirement Planning
• Budgeting

We are going to delve into a detailed analysis of each product below starting with the product for which Personal Capital is best known: Investing.

Personal Capital Investing

Investing in the stock market is not for the fainthearted. Fluctuations in stock prices can take you on a rollercoaster of emotions. One day the stocks are up, the next day, they are down. No investment platform can insulate you from the seesaw emotions that comes with losing money one day and gaining it back–plus more–the next day.

Some platforms, however, can gently teach you how to navigate the ebb and flows of the markets so that you don’t lose your mind. Personal Capital is one of those platforms.

Personalized Approach To Building Your Portfolio

No two investors are the same. Personal Capital realizes that and designs each investor’s portfolio according to their specific financial goals and risk tolerance.

Personal Capital Investment Strategy

Personal Capital tries to mitigate the risk inherent in stock investing by investing in a globally diversified portfolio of stocks and Exchange-Traded Funds. Not only do they diversify by investing in a variety of stocks and ETFs, but they also diversify by investing in multiple asset classes all over the world.

Personal Capital personalizes your portfolio by combining innovative technology with insight from expert financial advisors. The result of this convergence is that you’ll always have the best possible chance of meeting your financial goals.

Along the way, Personal Capital Financial Advisors will also help you with financial planning, retirement planning, and other money-related advice that you may need.

In short, Personal Capital Investment strategy is to diversify your portfolio by globally investing in a variety of stocks and ETFs over different asset classes.

Private Equity Access For Investors

For Investors with more than $5 million in liquid assets to invest and you meet other qualifications, Personal Capital may include private equity in your portfolio.

What this means is that Personal Capital will purchase, on your behalf, shares in private companies that are yet to go public. Investing in private equities is another layer of asset diversification.

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Personal Capital Investment Methodology

When you approach Personal Capital for the purpose of investing, they will evaluate at the entirety of your financial situation. They will assess things like:

• Your financial timelines and goals
• Your education
• Marital status
• Projected retirement age
• Tax laws in your state or the state in which you wish to retire
• All projected and current income and your net worth
• Risk tolerance
• Current expenses
• Personal beliefs, and more

The purpose of these questions is to have a holistic of who you are and your financial goals. Once they understand the kind of investor you are, they will place all the data in a complex financial calculator to generate a unique “investor profile” for you.

Personal Capital will then go ahead, using technology and skilled portfolio managers, to build a robust investment portfolio for you.

Portfolio Tracking With Personal Capital

Personal Capital has an intuitive innovative dashboard that helps you track the health of your portfolio. This tool helps you see–instantly, and at a glance–how well your portfolio is performing.

In this dashboard, investors can see their bank accounts, investment accounts, retirement accounts, budget, portfolio balances, net worth, and more.

With that kind of insight into your finances, you are less likely to stay up all night worrying about your investment.

Private Client: Personal Capital

For investors wanting more attention, Personal Capital offers a Private Client service. As a private client, you’ll get, in addition to a personalized portfolio, a dedicated team to help you reach your investment goals.

Personal Capital Cash: Banking

Personal Capital Cash is a bank account of sorts that Personal Capital offers to its members. The account is supposed to provide a higher APY than traditional banks.

Currently, the Personal Capital Cash account provides 0.05% APY. While that may be higher than the APY’s at most traditional brick and mortar banks, it is far lower than the APY offered by most online-only bank.

For example, the below banks offer more than 20 times the APY Personal Capital Cash offers:

• CIT Bank (1.3% APY)
• Ufb Direct Bank (1.6% APY)
• Ally Bank (1.25% APY)
• American Express Personal Savings (1.3% APY)

The company’s investment platform is excellent, and while its cash account pays higher than average APY, it still pays less than most online-only banks.

Personal Capital Retirement Planning

Personal Capital provides an innovative retirement planning tool that helps you build, manage, and forecast your retirement plan. The tool is free and uses your actual financial data to generate the forecast.

Budgeting With Personal Capital

Personal Capital has a free 50-30-20 budgeting tool for members of the platform to manage their finances.

The tool provides a comprehensive overview of your finances and allows you to categorize and track your expenses. You can sign up and use this tool even if you’re not investing with Personal Capital. You will, however, need to connect your bank account to the platform to benefit from the service fully.

Personal Capital Fees

Personal Capital charges a percentage of your total asset under management. The percentage changes based on the amount you have under management. Here’s the scale:

• First $1 million: 0.89%
• First $3 million: 0.79%
• Next $2 million: 0.69%
• Next $5 million: 0.59%
• Over $10 million: 0.49%

Who Is Personal Capital Good For?

Personal Capital has both a paid and a free version. The free version will be suitable for people who need cutting edge financial tools but can’t afford a monthly subscription payment. However, in exchange for using Personal Capital’s free tools, you’ll have to give up personal financial information like your bank account information.

The paid version of personal Capital is good high net worth individuals who need a combination of innovative technology and skilled portfolio manager to help them grow their portfolios.

Because Personal Capital charges a percentage of the total assets under management and not a fixed monthly fee like Robinhood or Acorns, it is potentially more costly to use the paid version of the service.

How To Join Personal Capital

Joining the free version of Personal Capital is easy. Just go to the company’s website and sign up using your email, a designated password, and your phone number.

Joining the paid version is also very easy; however, it will require to answer to questions to that Personal Capital can customize your portfolio according to your specific investment goals.

Personal Capital Vs Mint: What’s The Difference?

Personal Capital is primarily an investment platform. Mint, on the other hand, is a budgeting platform. Though Personal Capital performs some budgeting functions as well, its core business is investing.

In order to compare oranges to oranges, we’ll compare Personal Capital’s budgeting function to Mint’s.

Personal Capital Vs Quicken: What’s The Difference?

Quicken is an older and much more ubiquitous fixture in the personal finance space. It has been around for over 37 years. The Quicken software is primarily a personal finance software, and it handles issues such as budget creation, tracking, and monitoring.

While Personal Capital does the same thing — budget creation, tracking and monitoring– there are some differences.

Personal Capital Vs Betterment: What’s The Difference

Betterment and Personal Capital provide similar services: Investing. Betterment, just like Personal Capital, helps members manage their money through cash management, guided investing, and retirement planning.

Here are some of the differences between the platforms:

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Personal Capital Review – Final Thoughts

Personal Capital is an all-around excellent service–both the free and the paid versions. If you just need tools to manage your finances, Personal Capital’s free budgeting tool comes highly recommended.

If, however, you are looking for a wealth management firm to help build your investment portfolio, there are some strong competitors on the market, and it will serve you well to investigate them as well. Some of Personal Capital’s competitors are Betterment, Trade Station, Robinhood, and Fidelity. Hope this Personal Capital Review has been helpful.

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