The Personal Capital automated investment platform is one of the most comprehensive robo-advisors available today. The company was founded by Bill Harris, former CEO of Intuit Inc. and PayPal Inc. Personal Capital is like two advisory services in one and offers the following:
- A completely free money management system is available to anyone.
- A computer-assisted investment management portal, available to subscribers, with access to a dedicated financial advisor as well as an investment strategy based upon a unique sector weighting approach. (For more, see: How Do the Robo-Advisors Differ?)
Anyone can sign up for a free Personal Finance account. Upon signing up and linking a few banking and investment accounts, the user gains a robust financial tracking and analysis tool. This free platform far surpasses that of the free Mint.com and Quicken versions.
The personal finance dashboard, accessible from a computer or phone app, provides a 360-degree view of your finances: income, expenses, spending, saving, investing, bills, debt and more. For users concerned about retirement, Personal Capital provides free retirement planning calculations. Other free services include an analyzer to determine if you’re overpaying investment fees. Personal Capital also sends regular alerts if your spending veers off track. (For more, see: Top 5 Robo-Advisors in 2017).
The cash flow screen shows the comparison between cash coming in and spending. The platform drills down into individual spending amounts and assigns them to their categories. The dashboard allows you to compare the spending from week to week and compare it with specific metrics.
Investors have access to graphs and data demonstrating past investment returns and how they might perform in the future. There’s also a handy “investment checkup” to determine whether you’re on the right path for the future. There are asset allocation charts and graphs. On the net worth screen, you can see how well your investments are performing against several well-known benchmarks as well as a tally of your winning and losing holdings. The program also gives a clear picture of your asset allocation.
When you turn your investments over to Personal Capital for management, you receive your own dedicated financial advisor. They invest your money according to a sector-driven approach while considering your personal goals and risk tolerance. Personal Capital also rebalances when necessary and offers an entire suite of additional investment management and banking services. (For more, see: What is Your Risk Tolerance?)
As is the case with any service, there are advantages and disadvantages.
The advantages of the Personal Capital free dashboard are:
- It’s very easy to set up and get started with the Personal Capital dashboard.
- The free Personal Capital dashboard is superb.
- Graphs and charts are clear and straightforward
- The free reports include income, spending, investment returns, asset allocation, projected investment fees and net worth.
- The information provided on the dashboard as well as the regular alerts is excellent data for any consumer seeking to stay on top of their finances.
- The company sends regular emails to help you stay on track financially.
- The YouIndex compares your investment returns with weighted benchmarks to demonstrate how your assets are performing against the markets.
- The security is comparable to the most secure financial institutions.
- The Personal Capital app and tablet versions are robust.
No review is complete without pointing out potential deficiencies. The impact of Personal Capital’s drawbacks may depend on what services you are looking for in a financial and investment manager.
- There was small conflict while setting up one retirement account. A call to customer service began a resolution of the issue. This type of issue is common when dealing will most online financial set ups.
- The paid financial advisory service requires a $25,000 minimum investment. Although lower than their initial $100,000 amount, this may be a high entry price for some.
- The equal, sector weighted investment approach is distinct from the more typical market capitalization asset weights used by many other robo-advisory services and passive index fund approaches. More time is needed to compare Personal Capital’s methods with the passive, market weight index fund investing approach to determine which method yields better long term results.
- For paid services, fees are slightly higher than some investment or robo-advisor competitors as they start at 0.89% annually for those with accounts smaller than 1 million
The Bottom Line
Personal Capital has overtaken its competitors with its free tools and dashboard. The paid services may be appropriate for certain investors. As with all investment advisor pros and cons, you must perform your own due diligence before investing to determine if the offering matches your individual requirements.