Looking for Robb Report UK? Click here to visit our UK site.

Review: Personal Capital Is a Versatile Robo-Advisor With a Human Side

It has become wildly popular for its one-two combo of free personal money management tools and fee-based investment management services.

Personal Capital Stephen Dawson/Unsplash

We may receive payment from affiliate links included within this content. Our affiliate partners do not influence our editorial opinions or analysis. To learn more, see our Advertiser Disclosure.

Personal Capital is the Swiss Army knife of robo-advisors. It offers cutting-edge financial tracking, a cash management account and investing services, all on one convenient platform.

The wealth management company has become wildly popular for its one-two combo of free personal money management tools and fee-based investment management services. Personal Capital caters to individuals who want an easy, no-cost way to track their personal finances as well as well-heeled technophiles who seek the robo-advisor experience combined with personalized advice from a human financial advisor. It also offers unique features to investors with a lot of capital.

Personal Capital Pros

  • Free, robust financial tracking tools
  • Access to financial advisors (with minimum investment)
  • Tax optimization strategies
  • Socially responsible investing (SRI) options

Personal Capital Cons

  • Very high account minimum for investment support
  • Hefty management fees
  • Sales calls to upsell wealth management once your account balance hits $100,000

Who Should Choose Personal Capital?

Personal Capital has been around since 2009, and it was acquired in 2020 by Empower Retirement, America’s second largest retirement services provider. That means Personal Capital is backed up by some serious retirement planning and investing resources.

The Personal Capital platform is best for personal finance geeks who gain a sense of comfort, and dare we say, pride from seeing their wealth laid out neatly for them on a single dashboard. Basically, if you’re the type who schedules daily money check-ins with yourself over your morning cup of coffee, Personal Capital is probably a great option for you.

For those looking to streamline the process of those money check-ins, Personal Capital lets you track all of your accounts in one place—for free. When people sign up, the average user has 15 separate accounts, according to the company. These might include checking and savings accounts, certificates of deposit (CDs), retirement accounts, a mortgage and taxable investment accounts.

With Personal Capital, there’s no need to sign in to separate sites to view your different account balances. You just log in to the Personal Capital website or download the mobile app. While many budgeting apps offer similar ways to handle account consolidation, Personal Capital has an easy-to-use interface that simplifies the process, along with powerful tools to help you optimize your money and investing strategies to build wealth simply and efficiently for the future.

On the investing side, Personal Capital appeals to two types: DIYers who can use its free, comprehensive financial planning and investing analysis tools to capture a holistic view of their portfolios, and high-net-worth investors who can pony up the $100,000 minimum required to gain access to a team of personal financial advisors and financial planning services similar to those offered by traditional human advisors.

Related: Financial Planning & Wealth Management with Personal Capital

How Personal Capital Works

Anyone can use Personal Capital’s free money tracking and management tools, and the platform is worth trying for these features alone. Just create a free account or download the Personal Capital app to get started. Then you’ll link your financial accounts (have your logins handy), and you’re good to go.

If you link $100,000 or more in investable assets, you’ll qualify for a free consultation with a financial advisor. They’ll ask you a series of questions and then create a personalized strategy for you.

To gain entry to Personal Capital’s Wealth Management tier and financial advisors, you’ll need to invest at least $100,000 with the company to get started. To be clear, this is based on the amount you invest in a Personal Capital account, not your external linked accounts. Its Wealth Management offering is the “personal” side of Personal Capital, where you’ll find hands-on, professional portfolio management. All Personal Capital advisors have a fiduciary obligation to clients, meaning they must put your own best interest before theirs. They’re available by phone, email or video chat.

Personal Capital offers three tiers of Wealth Management Services, depending on the assets you hold with them:

  • Investment Service: Clients with assets of $100,000 to $200,000 get access to the company’s investing tools and support from Personal Capital’s financial advisors when needed. Assets are invested in a portfolio of tax-efficient exchange-traded funds (ETFs) with a weighted average expense ratio of 0.08 percent, and that portfolio is professionally managed by the company’s robo-advisor.
  • Wealth Management: Clients with assets of $200,000 to $1 million enjoy all of the benefits above, plus access to two dedicated financial advisors and the flexibility to customize a portfolio with individual stocks and ETFs.
  • Private Client: Clients with $1 million or more in assets get all of the services above, in addition to more in-depth financial planning and advice, access to alternative investments like private equity and hedge funds, exclusive private banking services and the ability to invest in individual bonds in addition to stocks and ETFs.

How Personal Capital Invests Your Money

Personal Capital uses “Smart Weighting” to minimize risks and maximize returns by investing across asset classes based on sector, style and size, rather than simply mirroring an index like the S&P 500. This approach helps diversify your portfolio to weather potential market ups and downs.

The company also uses dynamic portfolio management to adjust your asset allocation—a.k.a. your investment mix—to accommodate shifts in your financial situation. In addition, it takes advantage of tax optimization strategies like tax-loss harvesting. Since Personal Capital invests your money in individual securities, it can easily target losers and sell them to offset gains and minimize taxes. Its automatic portfolio rebalancing feature periodically realigns your investment allocations, making sure your portfolio stays on track with your goals.

As mentioned above, portfolios with assets under $200,000 are invested in ETFs only. Accounts between $200,000 and $1 million receive custom strategies containing a mix of individual securities and ETFs. Investors with assets over $1 million get access to alternatives like private equity.

If impact investing is your preference, Personal Capital also offers socially responsible investing (SRI) opportunities, where strategies are screened based on environmental, social and governance (ESG) criteria. Interestingly, Personal Capital lets you personalize your SRI strategy. Keen on renewable energy but not conflict diamonds? Personal Capital’s SRI strategies let you invest in what you value most.

Of course, you can link your other investment and retirement accounts, and Personal Capital will help you monitor your performance and progress towards your goals, too.

Other Personal Capital Features

Personal Capital offers a copious array of financial planning and investment analysis tools.

Among the most popular is its spending tracker, which gives you access to a variety of free budgeting and financial planning tools to help you manage your money day-to-day. It’s accessible through the website or the Personal Capital app, which is available on both Google Play and Apple’s App Store.

Its primary financial tracking tools include:

  • Retirement Planner: Monitors your retirement savings progress and lets you know if you’re saving enough to reach your financial goals.
  • Investment Checkup: Keeps tabs on your portfolio performance and suggests opportunities for improvement as needed.
  • Fee Analyzer: Checks your investment fees charged on linked accounts and lets you know if you’re paying too much. Also assesses the impact of fees on your retirement savings.
  • Net Worth Tracker: Lets you see your net worth across all linked accounts in real time on your Personal Capital dashboard.
  • Cash Flow Monitoring: Keeps tabs on cash coming in and out of all your linked accounts.
  • Personal Capital Cash: This high-yield savings account offers a 0.05 percent annual percentage yield (APY), no balance requirements and no monthly fees. Funds are FDIC insured up to $1.5 million.

Personal Capital Fees and Costs

Personal Capital’s financial tracking and planning tools are free. Customers with account balances of at least $100,000 may opt in to Personal Capital’s Wealth Management services. All clients get access to financial advisors; the level of service depends on investable assets.

Management fees range from 0.89 percent to 0.49 percent, depending on account balance:

  • Wealth management clients with up to $1 million in balances: 0.89 percent fee
  • Private clients with up to $3 million: 0.79 percent fee
  • Up to $5 million: 0.69 percent
  • Up to $10 million: 0.59 percent
  • More than $10 million: 0.49 percent

The average expense ratio charged for ETFs comprising your investment portfolios is 0.08 percent.

Personal Capital Advantages

Personal Capital consistently gets high marks for its impressive suite of free financial tools and easy-to-use interface and mobile app. Its human/hybrid robo-advisory geared toward high-net-worth investors has also garnered ample praise.

That human touch is what sets Personal Capital apart and situates it squarely between a robo advisor and “real-world” financial planners. If you have serious cash to invest and crave human interaction to help you manage your finances and plan for future goals, Personal Capital might be a solid option for you.

In fact, if you have more than $200,000 to invest and you prefer to be hands-off with your portfolio, you really can’t go wrong. The robo-advisor manages your accounts automatically, but you still get access to the firm’s financial advisors and customizable portfolios. The all-inclusive fees (no separate charges for brokerage or custodial services), socially responsible investing strategies and tax-loss harvesting features are all compelling perks, too.

Finally, one of Personal Capital’s biggest strengths is how it helps you get a holistic view of your financial picture. Whether you have a free or paid account, the dashboard lets you see your spending, saving, net worth, portfolio balances and investment performance at a glance. All of your linked accounts will show up here, not just the ones (if any) Personal Capital manages.

Personal Capital Disadvantages

One significant drawback is its management fees, which range from 0.89 percent on the first million to 0.49 percent for more than $10 million. For those on the lower end with balances from $100,000 to $200,000, Personal Capital’s fees may seem high compared to competitors like Wealthfront and Betterment, which charge 0.25 percent advisory fees.

However, Personal Capital offers access to a team of advisors, which other non-hybrid robo advisors don’t. And for those with accounts below $200,000, even a comparatively hefty 0.89 percent is still lower than traditional financial advisors’ management fees.

That said, if you’re looking for a similar robo advisor without the human connection, Wealthfront may be a viable alternative. Its account minimum is just $500, making it accessible to more investors, and it similarly offers a range of powerful financial planning tools.

If you want that human touch, Betterment stands out for more affordable wealth management services. It offers digital investing services for a 0.25 percent annual fee with no minimum balance; those with balances over $100,000 can opt into an elite tier that charges 0.40 percent annually and provides access to a team of certified financial planners (CFPs). It’s important to note, though, that Personal Capital has more bells and whistles.

Robyn Conti is a freelance financial writer based in Los Angeles. She has been writing about workplace retirement plans, investing, and personal finance for the past 20+ years.

Read More On:

More Finance