Overview

Personal Capital is a financial advisor providing its services online using automatic software programs that help you to manage your money. Personal Capital is an algorithm driven robo-advisor program clubbed with the dedicated human financial advisors that makes a combination which the company calls tech enhanced advising. Their software provides objective investing advice which reduces inefficiencies and takes the emotion out of money management.


What exactly is Personal Capital?

Personal Capital is an online investment advisor that works on the concept which focuses on making use of power of technology so as to enhance the financial services industry and make it much more accessible, affordable and honest. This technology is used to provide objective investment advice with much lower fees than most traditional institutions.

Personal Capital is known for lowering the fees for its client through the use of the instruments known as the exchange traded funds (ETFs) just like all the other OFA’s. ETFs or exchange traded funds are much similar to the mutual funds, but they come with a much lower expense ratio and can be traded like general stocks.

Personal Capital also invests money of the investors in a highly-differentiated or diversified sample of more than 60 individual stocks. This helps in providing each of the registered customers a portfolio with the tax optimization approach which is preferred by the company.

Personal Capital also features in monitoring your portfolio and optimizing it using:

  • Tax optimization and tax-loss harvesting
  • Automated portfolio rebalancing.
  • “Personal Strategy” that is developed and maintained

Investments are then allocated according to your personal strategy that you choose and market conditions and phases which are going on.

Personal Capital Pricing

The nature of the software is much of automated thus allows personal capital to charge much lower fees than the already working manual wealth management firms, which are appealing to many of the people who are totally rational and want to pay less and less of fee.

However this amount of enhanced services obviously means a large amount of management fees and personal capital keeps it promises in this department too. It may be lower than the usual fee charged by any in-person financial advisor but slightly more than its rivals, however the enhanced services promises to compensate for that extra payment.

The company has decreased its account minimum to $25,000 in 2015, but however it also offers a wealth of free tools that lets the users link their accounts and track their spending and watch out for their portfolio’s performance and investment fees.

Personal Capital Features

Personal Capital’s free service is focused (not surprisingly) on investing and retirement planning.

  • Retirement Planner — Find out if you are on target for retirement. Currently this feature is available only on the website and iPad app only.
  • Budgeting — follow weekly, monthly and yearly income and spending habits with their Cash Flow Analyzer spending tool. Currently this is available only on their mobile app.
  • 401(k) Fee Analyzer — this useful feature tells you how much your retirement plan is costing you.
  • Investment Checkup — Get high-level recommendations on your investment asset allocation. By determining your risk authority and span, Personal Capital will then suggest asset allocation that’s right for you.
  • Asset Allocation Target — it will check whether you are overweight or underweight in any of the major equity categories.
  • Upcoming Bills — shows a report of upcoming bills and their due dates.
  • Email Notifications — Get daily or weekly summaries of your investment portfolio and spending.
  • Website and Mobile App — not only can you access the service by their website, but also on iOS and Android mobile devices.
  • Apple Watch App — as if using your iPhone app isn’t enough, Personal Capital was one of the first services to add Apple Watch app functionality.

Who Might Personal Capital Be Good For?

  • Do-it-yourself investors

If you are the type of person who doesn’t want to pay high fees for investment advice than personal capital may be the thing for you. Investment Advice, portfolio management, custody and trading fees are all just charged under one package fee that is quite easy to understand also the automatic software provides a lot of transparency and un-biasness while providing advice thus helping such kind of investors types to avoid the mistakes that they might be prone to make if they would have been without any kind of Support

  • Long-term, passive investors

In case you are such an investor who is looking to invest for a long period, Personal Capital may be right for you. The company at start provides you with personalized investment plans and then you can set it and forget it for some time. As the automated software will do all of your planning and investment on you and however if anything changes you just need to inform your advisor about all the changes and then proper adjustments would be made regarding it.

Personal Capital Retirement Planner

With help of Personal Capital retirement planner one can easily know whether the investor has made enough of saving for his retirement or not. Even if he has required funds what is the percentage of risk involved for the amount he is saving for the retirement. With the help of this tool one can easily know about the spending goals as well as income events and project future portfolio value. Once these estimates are done retirement planner calculate and tells about in what condition the user is shaping towards his retirement.

The tool offered by personal capital is the best retirement planning tools as compared with other companies tools which lack many features. To make use of this tool there is no need for uses to enter asserts and accounts manually as the tool calculates all the required information automatically.

Personal Capital 401(k) Analyzer

With the help of this tool one can drive annual 401(k) expenses from required account of the user which is added by him within his services. After making some assumptions one can see an annual fee which is eating retirement money much before time. For calculation of retirement relating plan this tools is best suited as it shows desired result every time.