Fees and Deposit Limits9.2/10
Ease of Use9.8/10
Account Types and Services9.4/10
- One of the best free services on the market
- Syncs all your financial accounts
- Mobile app is very easy to use
- Paid service comes with your own personal human advisor
- Smart Indexing available to accounts over $100,000
- $100,000 minimum deposit on paid accounts
- Steep annual fees on paid accounts
Personal Capital Review 2020
Personal Capital is best known to provide both free and paid wealth management services, and it also combines automated investing algorithms with dedicated financial advisors. This is all well and good, but is this the right service for you? Read our 2020 Personal Capital review to learn more about this Robo Advisor.
Personal Capital started life as SafeCorp Financial Corporation in 2009. Founded by Bill Harris and Rob Foregger, the company changed its name in 2010, and was registered as a Robo Advisor with the U.S. Securities and Exchange Commission in 2012. Personal Capital was named to the CNBC Disruptor 50 list in 2014 and 2015 respectively, with over $11 billion in assets under management (AUM) and over 21,000 active investment clients.
Personal Capital Fees & Account Types
In this part of our Personal Capital review for 2020, we focus on their different services and fees for varying account balances.
Personal Capital’s fees vary depending on account type and balance. Their Free Financial Tools are free forever. The managed services vary from 0.49% to 0.89% annually, depending on your account balance.
First, let’s talk about their Free Financial Tools service:
Free Financial Tools
The first main feature is the free service. It offers a retirement planner, investment checkup, budgeting and cash flow, fee analyzer, and education planner in a downloadable app. The Personal Capital app is available for Apple and Android devices and is the easiest and most convenient way to manage your accounts. It’s easy to create a free account and the service can sync your accounts (such as credit cards, bank accounts, investment and mortgage accounts) without any additional worries. This Robo Advisor will give you a 360-degree view of all your finances in one easy-to-use dashboard.
The next main feature is Personal Capital’s paid Investment Service for those with a minimum balance of $100,000. What makes the paid service unique is every paid account gets a dedicated financial advisor. Need help managing your investments? Just schedule a live consultation within the website or app, and your personal advisor will handle the rest for you.
Personal Capital’s Wealth Management service is offered to investors with assets worth $200,000 to $1M.
This service gives you two dedicated financial advisors, tax loss harvesting and tax allocation, customizable individual stocks and ETFs, and college savings with 529 planning. You also get all the great features from the paid Investment service.
Private Client Services
If you have over $1M in investment assets, you are qualified for Personal Capital’s Private Client service. In this plan, you get everything the Wealth Management service has to offer plus private equities and hedge fund reviews, access to private equity investments, priority access to expert financial advisors, private banking services, Deferred Compensation Strategy, Estate, Tax & Legacy Portfolio Construction, and a lot more.
For Private Client Services, the fee structure is tiered, so the higher your account balance, the lower your fees. The structure is as follows:
- 0.79% for the first $3 million
- 0.69% for $3 million to $5 million
- 0.59% for $5 million to $10 million
- 0.49% for accounts worth $10 million or more.
It’s clear that Personal Capital’s paid services are high-end and geared towards those with a high net worth and who want high-end investment services.
Ease of Use
We need to talk about the Personal Capital mobile app, which is one of the best we’ve used in a while. This review allowed us to take the app for a test drive to see how it compares to the desktop application. And as we found out, the app and the desktop version basically have the same features, so if you’re already familiar with the website then you’ll have no problems navigating the mobile app.
Both are incredibly easy to use, and even novice investors will have no problems getting accustomed to the interface. Opening an account is one of the easiest we’ve tested so far, and all your accounts will be synced automatically in one central location.
Flexibility & Diversification
Since Personal Capital is basically two services rolled into one, it gets a high score in terms of flexibility. Remember, this is a robo advisor that manages your existing investment accounts, not one where you invest directly into the service.
The free financial tools are great and have some fantastic tools to help you view your accounts in one place and manage them yourself. If you have a paid account, you’ll get a dedicated human financial advisor at your disposal. There are reports that each human advisor handles around 200 clients, but you can easily schedule a friendly consultation (via phone, email or chat) if you have any concerns regarding your account. If you are the type of investor who likes to get involved, Personal Capital is perfect for you.
Account Types and Services
The Personal Capital free service offers retirement planning, budgeting and, 401(k) fee analyser. This also includes an investment check-up feature that provides high-level recommendations on your asset allocation.
If you opt for the paid advisory service, the Personal Capital Robo Advisor will use individual securities and ETFs to create your portfolio. The service prefers to invest in individual securities to minimize taxes in taxable accounts, thanks to the tax loss harvesting feature that comes standard with every paid account. All paid accounts will also benefit from automatic rebalancing.
If you signed up for the service and your balance is worth $100,000 or more, the Personal Capital Robo Advisor will activate ‘Smart Indexing’. This feature will invest in individual securities and ETFs for a more efficient and cost-effective tax harvesting opportunity. This type of service is not unique to Personal Capital, as Wealthfront also offers a form of direct indexing.
High-Yield Savings Account
Following in the footsteps of other big robos like Wealthfront, Betterment, and Wealthsimple, Personal Capital launched a high-yield savings account (OK technically not a “savings” account, so they call it a “cash account”) that yields around 2% – MUCH higher than industry average savings accounts which are stuck at around 0.05% APY (awful.)
At the time of this writing, the Personal Capital Cash account will yield 1.55% annually (1.60% if you’re a Personal Capital client), but that’s subject to change. With no minimum balance, no fees, and FDIC insurance up to $1,500,000, there’s not much to lose in opening up one of these accounts and keeping your rainy-day fund in there.
With Personal Capital’s new Socially Responsible Personal Strategy, investors can choose companies that do a better job in managing environmental, social, and corporate governance issues. The robo advisor partnered with Sustainalytics to determine the best options in your socially responsible investment practices. This new style of SRI investing looks into three new pillars that assess the social merits of each corporation.
Personal Capital utilizes three pillars to assess the social responsibility of businesses: ESG. The E stands for Environmental and includes sustainability, renewable energy, and climate change practices. The S is for Social and looks into labor relations, diversity, and conflict minerals. Finally, the G is for Governance and studies the management structure, board independence, and executive compensation of a particular company.
The end result is a best-in-class approach to impact investing. Using a combination of filters and ranking methodologies, Personal Capital offers only the best companies with a positive social and environmental impact on the world. In return, this allows you to invest money in companies that align with your personal and social beliefs.
Suitability for Different Investment Budgets
It’s not all good news. Personal Capital’s investment services are clearly intended for higher investment amounts. The paid service is only available for a minimum investment deposit of $100,000. However, the free service is both highly informative and extremely easy to use.
Conflicting statements aside, we believe that Personal Capital is best suited for well-heeled investors, but it remains an ideal platform for investors looking for a free robo advisory service that easily syncs all financial accounts in a single location.
Summing up our Personal Capital review, we like the free service that offers a comprehensive list of free tools – namely budgeting, retirement planner and 401(k) fee analyzer – and the ability to sync all your financial accounts.
The free service is brilliant and available to everyone. However, the paid Investment and Wealth Management services are definitely meant for investors with a high net worth and who are looking for advanced investment tools and features.
Personal Capital is unique, no question about that. The annual fees are quite high compared to other Robo Advisors on the market, but you get top notch services (and access to a personal human advisor) for the price.