Personal Capital Review: Main Features, Investment Strategy, Pros and Cons
More and more people are looking for online financial advisors to help them effectively manage their funds and invest them without having to put in that much time and effort themselves. Which is why it comes as no surprise that so many companies have developed this type of service, and why it is increasingly hard to decide which one best suits your needs. Today, we are going to provide you with a Personal Capital review where we are going to disclose the service’s main features, strategies, and pros and cons. Let’s have a look!
Personal Capital Review: Main Features and Investment Strategy
Personal Capital offers two main services, one that is completely free, and one that you have to pay for. The free one is a financial aggregator that helps you keep all of your information in one place for your convenience. The one that you have to pay for is the financial advisor we are going to be talking about today. This one manages financial portfolios. How does it do that, you ask? Well, by using software that is entirely automated. This software provides you with advice on how to invest your money efficiently and how to manage them objectively.
Since it is an online financial advisor, you don’t have to pay high fees in order to use Personal Capital. In fact, the fees are much lower than in the case of a traditional advisor firm. If you are wondering what kind of accounts you can open with Personal Capital, you should know you have a couple of options. You can open IRAs, joint accounts, roth IRAS, taxable accounts, and trusts.
The company has a holistic outlook on investments and the ability to automatically rebalance your portfolio. They aim to optimize tax liabilities and returns. That is why they implemented two strategies called “Tactical Weighting” and “Smart Indexing”. You also get tools for Personal Capital budgeting, and you can customize your portfolio by using what they call the “Personal Strategy”. Customization is really important when it comes to robo-advisors. That is mainly because you want to make sure everything is exactly as you want it to be before trusting an online financial advisor with your funds.
Another great feature that we had to include in our Personal Capital review is the fact that they offer tax-loss harvesting. Not many similar services do, and this is considered an extremely important advantage in the world of investing. Moreover, you can set your goals according to your personal life. You are able to decide on your risk tolerance and the time frame you want your investments done in.
We should also mention that you can access your account by using the Personal Capital app. This is available for both Android and iOS users. Moreover, for the people using Apple products, the company decided to add the Apple Watch feature as well. You can even choose to receive either daily or weekly reports related to your account portfolio.
When it comes to taxes, if you have a maximum of $1 million invested, you have to pay 0.89% of the entire sum. If you have invested between $1 million and $3 million, you only have to pay 0.79%. For the next $2 million they ask 0.69%, and for next $5 million 0.59%. Finally, if your investment is over $10 million, you will have to pay 0.49% of the total amount.
Personal Capital Review: Pros
We start our pros list with something that is really important when talking about robo-advisors. A lot of people tend to distrust online financial advisors. That is because they consider them less safe than entrusting your money to an actual human advisor. Which is why a strong security feature is a definite plus for any company offering this type of service. Personal Capital definitely puts a lot of thought and attention into this. They use a military-grade encryption in order to secure your information.
Not all companies that offer online financial advising services also include a human component. What we mean by this is the opportunity for clients to receive advice from an actual person. Personal Capital does, and it is one of the things that distinguishes it from the competition. The advisor is intent on collaborating with you as best as possible. That way, you can improve your returns. Moreover, you can have an investment plan that is entirely synchronized with your personal needs and goals.
Free First Meeting with Personal Advisor
Are you excited that Personal Capital offers you the possibility to talk to a personal advisor? Then you should also know that the first meeting you have to attend is completely free. All you have to do is sign up and open an account with at least $100,000 in it. Then, you can talk to your personal advisor online and discuss your strategy.
Free Investment Evaluation
In order for you to know how to allocate your funds and invest them so as to get a higher return, someone has to examine your portfolio carefully. In the case of Personal Capital, you get this service for free once you are a client.
Free Useful Tools
As we’ve already mentioned, you get two main services with Personal Capital. One that is completely free and one that you have to pay in order to access. The great news is that the free one includes a lot of useful tools. Some examples would be the net worth analyzer, a retirement fee analyzer, and a goal tracker.
Personal Capital Review: Cons
Personal Capital Fees
Reaching the last part of our Personal Capital review, we should also mention the things you might find less desirable about it. One of them is definitely the fact that compared to other similar services, their management fees are quite high. However, if we were to compare them to a traditional financial advisor fee, they would still be cheaper.
High Account Minimum
The account minimum is of $25,000, which is definitely high for some clients. Personal Capital is thus targeting more high-net-worth people.
Summing It All Up
To wrap up our Personal Capital review, we should mention that we are pretty impressed with the main features of this company and with how they manage their investment strategy. The pros and cons list presented above should help you decide for yourself whether you should give Personal Capital a chance. Since the only cons we could find are related to high fees, we believe this company is worth testing out. This is especially true for people who have a higher-net-worth and thus more to spend on a really good service.