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Personal Capital is a financial management platform aimed at consumers who want to get their finances in order as well as investors looking for an automated yet personal approach. This Personal Capital Review will outline the pros and cons of this provider and describe all aspects of how it operates.
Aside from free financial tools, the platform allows for investing services, wealth management, and niche options such as hedge fund reviews, deferred compensation strategies, private equity investments, and more. Personal Capital manages over $10 billion in assets. It has over 21,000 clients in 50 US states. Over 2 million individuals use their free financial tools for personal planning.
Free Financial Analysis Tools
Personal Capital has a comprehensive range of financial analysis tools available for free.
A single payment model without any additional charges.
Tax optimized dynamic portfolio allocation with rebalancing and smart weighting.
Fees are far higher than comparable investment advisors.
High Minimum Account Threshold
The $100,000 account minimum is too high for regular customers.
Personal Capital is a financial management platform aimed at consumers who want to get their finances in order as well as investors looking for an automated yet personal approach.
How Does Personal Capital Work?
Personal Capital looks to help consumers consolidate all of their financial affairs through one application. Customers can assess their entire net worth and set goals for their savings and expenditure. It allows for short term goals and daily budgeting. Customers link all of their accounts into the Personal Capital platform for analysis.
It also allows for long-term plans, such as retirement or university, as well as portfolio management and specialized investing. The basic financial tools are free to use. Personal Capital also offers dedicated investment management services depending on what the client is looking for.
Commissions & Fees
The fees are a little on the high side with this advisor, ranging between 0.49% and 0.89%. There does not seem to be any signup or referral promotions at the time of this writing. This can be contrasted to other robo-advisors with fees around .25%. However, this is because users can take advantage of both human advisors with robo investment for the best of both.
The fee structure is 0.89% for the first $1,000,000, 0.79% up to $3,000,000, 0.69% up to $5,000,000, 0.59% up to $10,000,000, and 0.49% for $10,000,000 and above. With a minimum investment of $100,000 and no promotion, the fees are suited to hands-off investors with a higher net worth. There are no trade commissions fees.
Platform & Tools
The tools offered by Personal Capital are comprehensive, which justifies the higher than normal advisor fees. The tools can be used to track spending, link existing accounts, analyze portfolio performance, plan for retirement, and more.
Most (though not all) of these tools are available with the free account. The tools also include high-quality simulators, educational resources, and a 401(k) fee analyzer. Once a free account is created, it is easy to link all cards and bank accounts to analyze where you stand. The platform itself is intuitive and easy to use, like many robo-advisor platforms that offer a good mix of automation and flexibility.
Personal Capital offers applications for both iOS and Android so that customers can manage their portfolios on the move. The mobile applications are highly intuitive and individuals can monitor their net worth in real-time. It can even display the current value of your home.
Using the application, it is possible to view updates on investment allocations, current expenditure, portfolio performance, sector weighting, and current balance. The ability to monitor spending habits is one of the most popular features of the Personal Capital application. It gives users a more in-depth understanding of their spending and investment psychology, making them more informed as a consequence.
Deposits & Withdrawals
Deposits and withdrawals can be made through the Personal Capital dashboard, and this is the only place that the transactions can be initiated. The daily withdrawal limit is $100,000, which is quite high. The maximum deposit limit per transaction is $250,000. Deposits and withdrawals can also be made through the mobile applications (Android or iOS).
ACH transfers can be facilitated and there is no limit to the number of deposits or withdrawals you can make to a single account. Once you make a deposit, there is a 3-day holding period until you can withdraw the funds to the same account.
The customer experience with Personal Capital is reported as being relatively high. The tool is very easy to set up, and even someone with no financial knowledge can easily see how they are doing. It is easy to link all available accounts to the Personal Capital application. The free tools are simple but comprehensive, and investors can make use of them to handle personal investments.
Personal Capital really excel in the customer service department, offering socially responsible investing which can boost their image even further. They focus on the human touch as opposed to pure robo-investing, which can be a little mechanical. However, this is generally only when you are a high-level investor with over $100,000, given free dedicated advisors. This level of support is not available with the free account.
Security & Reliability
Personal Capital is secure, reliable, and regulated. All data is encrypted using AES 256 (the industry standard). In addition, there are internal controls and permissions access so that confidential customer information never gets exposed. No entity at Personal Capital has access to customer credentials. Personal Capital takes security very seriously and has a thorough system of checks and balances in place.
Qualys Labs SSL has rated the encryption standards at Personal Capital as A+, on par or higher than banks and other financial service providers. Two-Factor Authentication is mandatory where each new user has to verify their identity via SMS, email, or phone call. Personal Capital regularly completes third party audits for security purposes. They are partnered with financial security specialist Yodlee, who store the user bank and brokerage credentials. All Personal Capital cash accounts are FDIC insured up to an aggregate $1,500,000.