• Alex Mizerski

Personal Capital Review

Updated: Mar 27, 2021

Disclosure: This post contains affiliate links through which I'm paid. No additional cost to you, more here.

 

I wrote a Personal Capital review below. What I found out is Personal Capital is a great tool for anyone wanting to learn more about personal finance. They have a ton of tools and resources for you to explore, all free of cost.


This review has a lot of parts because they offer a ton of tools. The most robust offering they have, their bread and butter, is a robust finance tracker. If you are familiar with Mint, then you are familiar with Personal Capital as they offer essentially the same tool.




Personal Capital Review: Key Points

  • While Personal Capital doesn't want to be considered a robo-advisor, they really do have a great robo-advising tool

  • Personal Capital is a wholly-owned subsidiary of Empower Retirement, a retirement services provider, as of August 2020

  • In June of 2020 they built a cool "Recession Simulator", which shows how your investments would have performed during past recessions (tons of fun!)

  • The Personal Capital financial planning program can be used at no charge.

  • Investing with Personal Capital takes $100,000 to get started so it certainly isn't an investment tool for everyone (if your 401(k) needs to be rolled over and is above $100k then this could work for you, but most of us don't have $100k sitting around other wise).


What is Personal Capital?

Personal Capital Landing Page
Personal Capital Landing Page

Personal Captial is a personal finance software suite that offers a variety of tools and an online financial advisor. Their suite of tools is free for use and their advisors will cost you money. That is how they stay in business, you pay if you choose to use their financial advisors. If you choose not to use their advisors then you still get access to a ton of great software which is all very similar to SmartAsset


They offer human advisors and robo-tools that help you get the most out of your investments. The downside is you need to have over $100k to invest and the management fees are pretty steep if you compare them to other similar advisors and especially the robo-only advisors out there.


For those that want robust DIY personal finance tools then I would give Personal Capital a look. To get that rolling first you set up an account and answer some basic questions about your current personal financial situation.


How can Personal Capital help you?

There are a number of ways that Personal Capital can help you. First, is the suite of free personal finance software tools. Budgeting, saving, and retirement planning are just a few of the free tools that are offered to help you get your finances in order.


Next, is their stable of financial advisors. What's great about Personal Capital is they give you a questionnaire, ask about your financial goals, then connect you with someone that specializes in what you are looking for. It's like Tinder for financial advice. While this service does cost money, if you are in the right situation this could be great for you.


How to set up a Personal Capital Account

Setting up an account is really easy, click here, to get started then follow the steps below. The link above will take you to the sign-up page. It's really basic, just add your email, create a password, and provide your phone number. The phone number is to make it easier for your future financial advisor to contact you.

Personal Capital Sign up Page
Personal Capital Sign up Page

Next, you will walk through a few steps where you inform Personal Capital about your financial goals. These are critical to aligning your goals with the proper advice.


Then you will connect your accounts. The powerful combination of your personal finance goals and your account information will allow Personal Capital to help guide your finances toward optimal health.


Once you have that set up they will offer you a free session with a financial advisor which is pretty great. Better still, they give you a few available dates/times right there on the screen!


For them it serves two purposes, they get a chance to sell you on what they have to offer, and they get to evaluate your potential as a good client for them. It is a minimal time investment on their side and they can potentially gain a lot.


There are also benefits for you to get a free session with a financial advisor. First, you get free financial advice and we could all use some of that. Second, you get to evaluate whether or not Personal Capital is the right fit for your situation. I'm sure there are more benefits, but I'll leave those up to you to find out.


Now you can opt-out, that is entirely up to you. After this free session offer, things get really personal. Now you need to connect your financial accounts to Personal Finance. You can add a bank account, credit card, investment account, whichever you prefer. If you are going to get the most benefit out of their suite of tools I suggest you connect all of them. This is the point in the process where you need to make a firm decision about whether or not Personal Capital is for you. Handing over the user name and password of your financial account(s) is a very personal decision and I for one don't take it lightly.


Overall, Personal Capital is an outstanding solution for a wide range of folks and something I suggest you consider for your own situation.



Personal Capital Features



Personal Capital has features within three different categories, money management, long-term financial planning, and options just for their clients


Money Management:


Net Worth

Personal Capital has a great net worth tool! I really do love a great net worth calculator (so much so I built one myself and it really is one of the main reasons I started a blog). After you connect your accounts Personal Capital will do exactly what I've said before and subtract your liabilities from your assets to get your net worth. Once you have that, then you can utilize all the tools below to help you grow your net worth over time!


Budgeting Tool

Who doesn't need a budgeting tool, am I right?!? In all seriousness, ensuring your budget is balanced is key to good financial health. Because Personal Capital has insight into all your accounts and a robust set of tools to help you visualize everything it makes budgeting just a little bit easier. They will also inject "standards" for where your money should go, the 50-30-20 rule is what they use, 50% of your budget going to what you need (mortgage/rent, food, etc.), 30% going toward what you want, and 20% directly to savings (retirement and cash). Utilizing this framework helps you better understand exactly how much of your income goes into each of the core expenses in life.


Savings Planner

This is software that helps you see your savings via their visual dashboards. Like I've said before, they have created really great visuals for viewing your money and the Savings Planner is no different.


What's more, you can plan out retirement, an upcoming trip, emergencies, or anything else you want to save up for. Having a broader view of all your finances/savings via their Savings Planner can make it easier to save.


Cash Flow/Capital Cash Program

Personal Capital cash is a great tool to see all of your accounts in one place (if you give them your login details). They have created a great visual dashboard to make it easier to understand your personal financial position. In addition, Personal Capital offers a "cash account" (think savings account) that offers you a little bit of interest for them holding your money. It doesn't have fees so that is a nice bonus of Personal Capital Cash


Long-term Planning:


Retirement Planner

Most retirement planners look similar and the version that Personal Capital has put together is no different. If you have a retirement account through your employer then you have seen something similar to what Personal Capital has to offer. If you are self-employed or have the income to invest in a Roth outside of your employer then you should further consider Personal Capital.


Investment Checkup

A good investment checkup is very important at least once a quarter. Having a tool like this at your disposal is highly valuable. Market conditions change, risk tolerance changes, your feelings about how your money should be invested can also change. Because of this, having an investment checkup tool is highly valuable.


Fee Analyzer

Do you have any idea what fees you are paying within your investment/retirement portfolio? Personal Capital can tell you with their Fee Analyzer! I have to admit that this is a super unique tool that I have not seen with any other personal finance software provider.


Education Planner

If you are planning to, or already have children then you should be thinking about how you are going to pay for their higher education. The education planner is the perfect tool to assist in that planning. The tool can give you a sense of what college tuition will cost and what you need to save in order to save that amount.


Client Exclusives:


Financial Roadmap

This is a tool that helps educate you on personal finance topics to help you address them with confidence. Further, this tool allows your financial advisor to educate you on topics that matter to you. What's more, because Personal Capital contains all your financial information it is smart enough to know when things have changed and a change to your roadmap is imminent. A smart tool to keep you on track!


Personal Strategy

This tool is precisely what I would expect from Personal Capital or any software that boasts the ability to help you plan your personal finances. According to their website, Personal Strategy is a sophisticated, transparent, and custom portfolio. Basically, their advisors and your finances combined to help your money grow fast.


Smart Withdrawl

This is another very valuable feature for anyone nearing retirement and looking for a plan. Are you going to be able to golf every day? Do you want to travel all year? No matter your retirement plan you are going to need to know how much you can spend to ensure your savings last you as long as you need. The Smart Withdrawl tool from Personal Capital will allow you to do just that.


Pros

  • Intuitive Visuals

  • High-interest cash-management accounts

  • Combination advisory services (human and robo)

  • Fee Analyzer


The visuals they have built to help you understand your saving and spending habits are pretty great. They are easy to quickly look at and understand if you are heading in the right direction. Personal Capital also offers a full range of personal finance tools and management services. Then there is the net worth calculator, which is clearly my favorite part about the site.


They offer a high-interest cash management account, which is really just a high-interest savings account. You don't have to have your money under management with Personal Capital to utilize their Cash Management account.


The combination of human and robo-advisors is a great way to get the help you need when you want it and the nimbleness of a robot.


Cons

  • Connecting all personal accounts

  • Mobile App functionality

  • Management fees


The tools they offer require you to connect your personal accounts. I prefer a site that offers tools for free and without details about my account logins.


Their mobile app doesn't have all the same features available as the desktop version. While working from home this matters a bit less, for those on the go, it makes a big difference.


The management fees are definitely high, as mentioned above, and there are better options out there when you take those fees into account. You would imagine that their combination of human and robo-advisors should lower their fees, but not in this case.


Summary

Personal Capital isn't for everyone, but for some folks, it is a great service and a series of tools. They manage $14 Billion so clearly, there are people out there that appreciate what Personal Capital offers.



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