Personal Capital is a hybrid of a traditional brokerage and a robo-advisor. It offers portfolio design via algorithmâlike many competing robo-advisorsâand also lets you buy individual stocks, design portfolios and access human financial advisors. In fact, the company dislikes the term robo-advisor, and prefers to call itself a âdigital wealth manager.â
Be advised that the minimum balance requirement is $100,000, meaning that Personal Capital is only a viable choice for investors who have already accumulated a sizable nest egg. Itâs not a product for beginners, although it is a great choice for people who have sufficient funds.
Founded in 2009 by a former CEO of PayPal and Intuit, the company claims that it offers âfull financial planning at no additional cost.â It charges an asset management fee of 0.89%, which is on the low side for personal financial planning, but itâs on the high side for robo-advisors, most of whom charge less than 0.50% per year. The fee drops as low as 0.49% for high-balance investors, but need a balance of more than $10 million to qualify for the lower rate.
Personal Capital is best suited to high-balance investors looking for a less expensive and more hands-off strategy than working with a full-service investment firm. The initial phone consultation with an advisor can help users evaluate their financial position and what they need to do to hit their goals.
The minimum balance required to begin investing with Personal Capital is $100,000, and you need at least $200,000 in investable assets to unlock the ability to customize a portfolio with individual stocks. This level also earns you recommendations and support from two dedicated financial advisors.
Note that anyone can take advantage of the siteâs free account aggregation and monitoring tools, which let you test retirement and savings assumptions and make sure your plan will help you achieve your goals.
If you are a socially conscious investor, Personal Capital offers an investment strategy that restricts certain businesses or industries based on their ESG rankings.
|Amount minimum to open account|
|Account fees (annual, transfer, inactivity)||
|Tax loss harvesting|
|Tax loss harvesting detail||Personal Capital's tax optimization process focuses on three key areas: tax allocation, tax loss harvesting and tax efficiency.|
|Offers fractional shares|
|Ease of use|
|Mobile app||iOS, Android|
|Customer support||Phone, 24/7 live support, Email, 5 branch locations|
Personal Capital charges variable annual management fees depending on your total account balance:
It offers three levels of wealth management services, depending on your total account balance:
If your balance is below $200,000, you can invest in ETFs but you cannot customize your portfolio. Personal Capital will recommend a target allocation thatâs based on the profile questions you answered during the sign-up process, plus other financial information youâve provided. While you can choose from among different target allocations, you wonât be able to create a custom allocation.
That said, Personal Capital does offer an ESG-optimized portfolio for users interested in socially responsible investing. In addition to limiting exposure to fossil fuels, the companyâs ESG basket filters out companies with material exposure to things like adult entertainment, gambling, tobacco, military contracting and guns.
Tax optimization is available at all portfolio levels. Personal Capital âtax optimizesâ by making sure people put the right investments in the right accounts (i.e. taxable accounts versus retirement accounts) and by tax loss harvesting, which means realizing losses to offset gains. All levels of service also offer portfolio rebalancing. Accounts are reviewed daily for tax-efficient rebalancing opportunities.
All accounts above $200,000 can invest in individual stocks and customize portfolios. Certain accounts with assets over $1 million may be able to invest in individual bonds. With assets over $5 million invested with Personal Capital, users may gain access to private equity investments.
Personal Capital recently launched a cash management account, Personal Capital Cash. The account earns 1.55% APY for people without a Personal Capital advisory account, and 1.60% APY for customers with an advisory account. Personal Capital Cash pays slightly less than other similar high-yield savings accounts, but thereâs also no minimum balance and there are no fees associated with it.
Personal Capital partners with UMB Bank, which holds Personal Capital Cash deposits in a network of different banks. The account offers up to $1,500,000 in FDIC insurance coverage, well above the standard limit of $250,000 per deposit account. Thatâs because Personal Capital works with UMB bank to distribute your money among accounts at different partner banks. When one account reaches the FDIC limit, another account with a different bank will be opened for you. This is done up to six times, providing a FDIC deposit insurance total of up to $1,500,000.
One of Personal Capitalâs strengths is that it offers financial tools to help you understand and track your entire financial life. These tools are free and available to anyone who downloads the app. You may register and link all your financial accounts to Personal Capital, such as bank accounts, brokerage accounts, loans and credit cards. Once they are linked to the app, your personalized financial dashboard gives you a view of your:
Most fintech users are comfortable linking their financial accounts to an investment platform, and Personal Capitalâs safeguards are in line with standards. They partner with financial tech industry veteran Yodlee to facilitate account aggregation, and user bank and brokerage credentials are only stored at Yodlee.
The site uses two-factor authentication when you sign in and encrypts your credentials and personal data with military-grade encryption algorithms. The company protects its data centers with various systems designed to prevent hacking and monitor for suspicious activity, and the data centers follow stringent financial and international security standards protocol.
Personal Capital also helps you keep an eye on things by sending an (optional) daily email with every transaction that occurred during the previous 24 hours in all your linked accounts, including your bank, broker and credit cards. Keep an eye on the activity and make sure you recognize all the transactions.
As far as insurance, all investment securities are held by an SIPC member broker custodian, protecting your securities up to $500,000, and Personal Capital Cash is FDIC insured up to $1,500,000.
Personal Capital is worth considering if you have $100,000 or more to invest on this platform. Though lower-level users canât customize their portfolios, asset allocation models seem to outperform comparative benchmarks much of the time.
Investors should carefully consider whether theyâd like more control over their investments or whether theyâre willing to pay higher-than-average fees for the services Personal Capital offers. In the meantime, the financial planning tools and initial consultation will give the average investor some insight into how theyâre doing and where theyâd like to go.