Personal Capital and Vanguard Personal Advisor Services aren’t for newbie investors. Both require a substantial minimum investment: $50,000 for Vanguard and $100,000 for Personal Capital. Despite this rather large hurdle, both these services are strong choices in the robo-advisor market (although Personal Capital would prefer to be considered a digital asset management service that includes personalized advice from financial planners). Vanguard Personal Advisor Services and Personal Capital both ranked highly in the core features of portfolio management, portfolio contents, and account services in our individual robo-advisor reviews. We will look at Personal Capital and Vanguard Personal Advisor Services head-to-head to determine which is the better robo-advisor.
- Account Minimum: $100,000
- Fees: 0.89% to 0.49% for accounts over $1 million
- Perfect for sophisticated investors with a high net worth
- Designed to give affluent investors a high level of diversification at a very competitive fee when compared to traditional top tier wealth management
- The Personal Capital Cash program should appeal to investors looking for higher-than-average FDIC-insured interest
- Account Minimum: $50,000
- Fee: 0.30% of assets under management (excluding cash)
- Not great for people looking for a quick entry point to investing, as the account setup is a cumbersome process and requires speaking with an advisor
- Best for those with more money available to open an account with, as the minimum account size is $50,000
- Great for people who want some input from a human advisor–portfolios are reviewed by a human advisor at least once a year
At Personal Capital, you can get a complete picture of your net worth if you link all your external accounts to the dashboard, which feeds into progress reports toward your financial goals. Retirement, as a goal, is the site’s main focus, but you can add non-retirement goals to the platform—although there is little assistance deciding on the size of the goal. Personal Capital can also advise on charitable gifts, which is a rare offering for digital asset management and robo-advisory services.
At Vanguard, clients can plan for a variety of goals, including retirement, college savings, home ownership or a rainy-day fund. Goal planning resources help you perform a top-down review of assets and estimate retirement costs, and the site is ripe with checklists, how-to articles and calculators. The account interface guides clients toward better ways to meet investing objectives, based on goals outlined during the onboarding process. The client can make changes at any time by tweaking their risk profile.
Both Personal Capital and Vanguard Personal Advisor Services offer a few options for retirement accounts, including traditional and Roth IRAs, SEP IRAs and 401(k) rollovers.
Retirement is the primary goal that Personal Capital helps clients plan for. Clients are asked a variety of questions about current income and what they expect to spend after they’re retired, and there isn’t much help built-in. Retirement planning includes the site’s proprietary Smart Withdrawal tool, designed to maximize retirement income by breaking out taxable, tax-deferred, and tax-free income. Personal Capital can also advise clients on investing selections in their 401(k) accounts. Personal Capital clients can speak directly to a human advisor dedicated to their portfolio at any time.
Vanguard’s website features a variety of tools and calculators to help clients determine how much money needs to be set aside to reach goals (such as retirement) within realistic time frames. Vanguard offers a snapshot of your outside investments as a part of your total portfolio and offers metrics on the likelihood of achieving your goal. All Vanguard clients have access to certified financial planners for all their retirement questions, and an advisor reviews your portfolio on a regular basis.
Personal Capital and Vanguard Personal Advisory Services both offer the most commonly used account types, with the majority being variations on the individual retirement account (IRA).
Personal Capital account types:
- Taxable accounts (individual, joint, trust)
- Traditional IRA accounts
- Roth IRA accounts
- SEP IRA accounts
- IRA transfers
- 401(k) rollovers
- High-interest cash account
Vanguard Personal Advisory Services account types:
- Taxable accounts (individual, joint and trust)
- Traditional IRA accounts
- Roth IRA accounts
- SEP IRA accounts (for the self-employed and small businesses)
- IRA transfers
- 401(k) rollovers
Features and Accessibility
Personal Capital and Vanguard Personal Advisor Services both put the human touch up front on their list of features. This reflects the fact that both are targeting higher net worth clients than most robo-advisors, so there is an expectation that you can pick up the phone and talk to someone at any time.
Personal Capital Features:
- Dedicated advisors for large accounts: At account levels between $200,000 and $1 million, clients have two dedicated financial advisors, and over $1 million, you get priority access to a CFP.
- Free financial tools: For no charge, you can link all your financial accounts (IRAs, 401(k)s, mortgages, loans, checking) on Personal Capital’s Dashboard and take advantage of a variety of offerings. You can track and manage your accounts, for instance, or forecast your retirement with the Retirement Planner. Compare your portfolio’s allocation to the site’s ideal target allocation, or use the Investment Checkup to see how your investments are doing. The site’s Fee Analyzer can also tip you off to investment fees you may not be aware of.
- Round-the-clock customer service: Clients have 24/7 call access including weekends and after-hours.
- Personal Capital Cash: The company offers a high-yield savings account paying 2.30% APY and FDIC insured.
Vanguard Personal Advisor Services Features:
- Dedicated advisor for large accounts: While accounts up to $500,000 are assigned to a group of advisors, accounts above that level get a dedicated advisor.
- Cross-company application: Some 80% to 90% of applicants to this advisor have other Vanguard accounts, and the $50,000 investment minimum can be applied across all Vanguard assets.
- Whole-picture advice: Although Vanguard Personal Advisor Services can’t include your other accounts (employee-sponsored retirement plans, college savings plans) under this advisor umbrella, planners will take those holdings into account when they design your portfolio and offer advice.
- Access to advisors: Although the on-ramp is slow, each client’s portfolio is designed by a certified financial planner (rather than auto-generated by your answers to a questionnaire), and it’s possible to reach a planner—during business hours—who can answer any questions you have. On this point, Vanguard considers itself a “hybrid” advice service, marrying robo-advising with the ongoing guidance of a human advisor.
Personal Capital’s fees are among the highest of the companies we reviewed, at 0.89% for portfolios of $100,000 to $1 million, declining to 0.49% for portfolios over $10 million. The simple explanation for this is that Personal Capital is pricing itself against wealth management services rather than other robo-advisors. That said, it’s possible to link all your financial accounts and receive recommendations from the site on improving returns for free.
Vanguard charges a competitive 0.30% advisory fee, paid quarterly, but hidden costs may add up since clients also pay transaction fees. The broker has also entered into payment for order flow deals with third-party mutual funds, and the client foots the bill for those fees as well. The average expense ratio of underlying investments is 0.11%.
Personal Capital and Vanguard Personal Advisor Services both feature very high minimum deposits to open an account. Personal Capital is twice that of Vanguard Personal Advisor Services, but even Vanguard Personal Advisor Services is many times higher than the average across the robo-advisor field.
- Personal Capital: $100,000
- Vanguard Personal Advisor Services: $50,000
At Personal Capital, the setup process requires you to schedule a call with an advisor even if all you want to do is use the dashboard to run an investment checkup. (You can cancel the call, but you can’t get past the screen unless you choose a date and time.) You can read a brief bio of your assigned advisor, but there’s no way to choose a different one. You’ll be prompted to import your financial accounts, including banking, investment and credit cards, to generate a picture of your finances and to analyze your current asset allocation. You won’t be able to see your portfolio recommendation, however, until after you’ve spoken to your assigned advisor.
Portfolios at Personal Capital are constructed from individual stocks (U.S. equities), ETFs, fixed-income investments for private clients and private equity for qualified investors. This is one of the key advantages of the services as it aims for true diversity across all your investments, taking into consideration potential concentrations in sectors as well as world regions.
Personal Capital portfolios are monitored daily and rebalanced when they move outside the asset allocation boundaries. The platform aims for turnover in a portfolio of 15% or less, which is intended to minimize tax consequences. Your portfolio can include socially responsible investments, either in individual stocks or socially responsible ETFs. Your advisor can make transactions for individual stocks or ETFs at your request.
At Vanguard, the up-front work is straightforward, but the timeline is lengthy. Clients answer questions about age, assets, retirement dates, risk tolerance and market experience, and the platform generates a proposed portfolio filled with Vanguard funds and other securities. Most of the portfolio design is done by algorithm, but you must speak with a financial advisor to complete your customized plan, and the fine print states that the final investment plan will be created within “a few weeks” after the consult. You must agree to the new plan via another consult before implementation.
Vanguard Personal Advisor Services offers a personalized portfolio of low-cost Vanguard index funds from a variety of market sectors and asset classes. The program has the flexibility to work with non-Vanguard assets, however, if you are holding those assets in another account at Vanguard.
Vanguard reviews your accounts quarterly and rebalances as needed. Vanguard’s methodology follows traditional Modern Portfolio Theory principles, emphasizing the benefits of low-cost securities, diversification, and indexing, driven by long-term financial goals. Stock and bond methodologies increase diversification by including equity funds at different capitalization and volatility levels as well as bond funds with different geographical, timing, and capital risks.
There are a variety of ways to efficiently invest money to avoid excessive taxes, but tax-loss harvesting is used by most robo-advisors. Tax-loss harvesting is the selling of securities at a loss to offset a capital gains tax liability.
Vanguard sticks to tax-loss harvesting through the MinTax cost basis method, which identifies selective units or quantities—referred to as lots—of securities to sell in any sale transaction based on specific ordering rules. The MinTax cost basis method will minimize tax impact of transactions in many cases, but not necessarily every case. Clients must opt into MinTax.
Personal Capital’s investment management philosophy goes a step beyond tax-loss harvesting, with the goal of optimizing a client’s tax burden. Portfolios are designed to be tax-efficient; investments with higher yields are placed in tax-deferred accounts, such as IRAs, to keep today’s tax bill lower. Mutual funds aren’t used in any managed portfolios, as they can be very inefficient from a tax perspective.
Both Personal Capital and Vanguard Personal Advisor Services have excellent security.
All investment securities managed by Personal Capital are held by a broker custodian, providing Securities Investor Protection Corporation (SIPC) insurance up to $500,000 but no excess insurance. Personal Capital encrypts data with AES-256 with multi-layer key management, and website encryption is rated A+.
Vanguard holds client funds in the Vanguard Marketing Group, providing access to SIPC insurance up to $500,000 and excess insurance. Cash, however, is swept into money market funds that are not FDIC-insured. The site uses 256-bit SSL encryption and also provides two-factor authentication.
At Personal Capital, there is no generic customer service line to call once your account is established—because you can contact the advisor assigned to your account directly. Prior to establishing an account, if you need to ask questions, the phones at Personal Capital were answered quickly and by helpful people.
At Vanguard, clients can speak to a financial advisor at any time by scheduling an appointment during customer service hours, which are 8 a.m. to 8 p.m. Monday to Friday. Unscheduled contact attempts produced a variety of lengthy wait times, from over five minutes to more than 13 minutes. There is no live chat for prospective or current clients, and registration is required to send an email through the firm’s secure message application.
Personal Capital and Vanguard Personal Advisor Services are both excellent robo-advisors, provided you have the money to use them. If you have assets of $100,000 and up, Personal Capital’s services are impressive—a financial advisory team, 401(k) advice, 24/7 call access, and some of the finest portfolio management methodologies we saw across all the robo-advisors we reviewed. Of course, the fee is also quite steep at 0.89% of the first $1 million. Even so, high net worth individuals or those rolling a large sum from a company 401(k) will want to take a long look a Personal Capital—it’s still lower than most financial advisors, who charge 1% to 2% per year for their services. It is a great service that reinforces the axiom, “you get what you pay for.”
Vanguard is more realistic for the average investors, but still asks for at least $50,000 to build a portfolio - although they do consider other Vanguard accounts to get clients to that total. If you can clear that hurdle, you have access to a team of certified financial planners and a portfolio of Vanguard’s low-cost index funds, plus a competitive fee of 0.30% of assets. If you are a high-net-worth client and don’t mind paying up for a better service, then Personal Capital is a natural choice and our overall pick for sophisticated investors in 2019. If not, then Vanguard Personal Advisor Service makes a decent pitch for a portfolio with a competitive fee, particularly when the access to human advisors is factored in. If the human touch is not a main criteria in your search, however, you will want to broaden it out to include a few more of the digital-first robo-advisors sitting at the 0.30% and under price point.
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Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of robo-advisors. Our 2019 reviews are the result of six months of evaluating all aspects of 32 robo-advisor platforms, including the user experience, goal setting capabilities, portfolio contents, costs and fees, security, mobile experience, and customer service. We collected over 300 data points that weighed into our scoring system.
Every robo-advisor we reviewed was asked to fill out a 50-point survey about their platform that we used in our evaluation. Many of the robo-advisors also provided us with in-person demonstrations of their platforms.
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