A lot of people dream of achieving financial freedom. Living a life free of worry from any financial burden or responsibility.
This kind of life will mean that you have enough money to cover all of your basic expenses without the need to work at a job or actively manage a business.
The money could be a huge lump sum amount that you calculate is more than enough to cover all your living expenses until you die.
Or, the money could be the interest earnings from your investments and what you get there is enough for your monthly expenses.
Sounds like a great life to have doesn’t it? Unfortunately, only a few people are able to achieve this dream life, as the majority of people fall short of their goals.
They either end up by not really saving enough or anything during their working years so they rely on government benefits once they can’t work anymore or run out of retirement funds. Or have enough but only just struggle through.
Fortunately, there are a lot of different programs and opportunities out there that can help make the dream a reality.
There are a lot of companies out there that provide wealth management tools and programs that can help you achieve your financial goals in life.
One such company is called Personal Capital. It’s an online company that provides a financial management platform to help you manage and monitor your overall financial well-being.
The tools they have are said to help you achieve all your financial goals, including financial freedom that a lot of people covet.
But is Personal Capital really a legit company that can help you with your finances? Or is it just a scam that you need to avoid at all cost?
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Personal Capital is a Legit Company that Can Help you With Your Finances
Personal Capital is an online financial management platform that is designed to provide you with various financial tools that can help you manage, monitor, and improve your personal financial well-being.
Founded in 2009, the company has two versions available, the free version and the paid or wealth management version.
The free version is designed to be primarily a budget application, but it also has a lot of useful financial management tools. The paid version mostly provides full investment management services.
Based on what I’ve seen so far about this company, I can say that Personal Capital is a legit company that can really help improve and manage your finances.
This is regardless of whether you go for the free or paid version. You can really improve your financial well-being with the tools that they offer.
And for the paid version, it can even provide you with a full-investment service that can help you make more money through investing.
Though the company can really help you, this doesn’t mean that there aren’t any issues or problems with this opportunity.
One of the primary issues with Personal Capital is the fact that the wealth management version will require huge capital.
Another issue is that you will constantly be reminded to upgrade to the wealth management version if you decide to go for the free version.
If you’re someone who’s more into budgeting, you’ll also notice that the platform’s budgeting capabilities are limited.
There are also issues with its high wealth management fees as well as not allowing for customizable asset allocation.
I’ll discuss these issues in more detail as we progress further in this review of Personal Capital.
Who Uses Personal Capital?
Personal Capital is designed for people who are looking to improve their financial well-being and who are wanting to achieve their financial goals in life.
The company is an online financial management platform that provides various financial tools that can help you manage, monitor, and improve your overall finances.
Personal Capital also offers wealth management services if you are looking for opportunities to grow your money through investing.
The beauty of this company is that they have a free version, and it provides you with access to the different financial tools they offer. But if you want the wealth management, you’ll need to shell out some money.
In the next section, I’ll discuss in more detail how Personal Capital works and the difference between the paid and free version.
How Personal Capital Works?
Personal Capital is a financial management platform that offers two versions, the Personal Capital Free Financial Dashboard and the Personal Capital Wealth Management.
Both versions give you access to the financial tools that the company provides. But the Wealth Management, or paid version, also offers a full investment management service.
Let’s first look at the free version. Now the Personal Capital Free Financial Dashboard has been labeled as the company’s budgeting app as that is supposed to be its main function.
But its budgeting capabilities are actually limited. The company, though, makes up for it with extensive investment and financial tools.
Personal Capital has 7 financial tools that the free version offers you. These are Budgeting, 401k Analyzer, Cash Flow Analyzer, Investment Checkup, Retirement Planner, Net Worth Calculator, and Personal Advisor.
As mentioned above, the Budgeting tool is a bit limited as there are certain functions that are not provided like payment functions.
But, this tool does allow you to track your spending patterns and how your money flows in and out. It can also allow you to analyze your spending patterns, as well as your transactions.
A monthly summary is also provided, and you’ll be given alerts of upcoming bills you need to pay.
The second tool is the 401k Analyzer. As the name suggests, it basically analyzes your employer-sponsored retirement plans. It can show you the actual cost of your retirement fund and even suggest alternatives.
This will help you keep track of your employer-sponsored plans and make it easier for you to decide if it is really a good plan or not.
The Cash Flow Analyzer is related to the Budgeting tool since this one allows you to create a budget. You just need to set it up by linking the different financial accounts you have to the platform.
Once you’ve done that, the tool will allow you to track both your income and expenses and allows you to set up a financial goal like paying off debt, buying a new home, or for retirement.
The fourth tool is the Investment Checkup, which gives you the ability to optimize all of your investments. You just need to combine all of your investment accounts on this platform.
Once done, the tool will check and analyze your investments and provide recommendations that can improve the overall performance of your investments. It might recommend that you adjust your portfolio, let go of a certain investment, or add more.
Another tool that Personal Capital has is the Retirement Planner, which can help you in achieving your retirement goals.
The tool allows you to simulate “what if” scenarios and see if you are on track to reach your retirement goals or not. In this way, you can adjust accordingly, based on changes to your scenario,
Let’s say you suddenly got married or had kids, the tool will factor in these scenarios and see how it affects your retirement goals.
The sixth tool is the Net Worth Calculator, which basically allows you to determine what your net worth is. It can track your assets and liabilities to help determine what your real net worth really is. Knowing this will allow you to see if you are financially healthy or not.
The last tool is the Personal Advisor, which is basically giving you the ability to talk to a real personal advisor.
Since this is part of the free tool, the advisor won’t be able to provide you with any investment advice. What the advisor can do is to answer questions regarding the services and provide added information about the tools recommendations.
Now that we know how the Personal Capital Free Financial Dashboard works, it’s time to discuss the Personal Capital Wealth Management.
This service combines both robo advisors and traditional human advisors. Human advisors are similar to robo advisors, you are asked at the start what your risk tolerance is, investment goals, and your target date.
But, it also incorporates the human factor by also taking into consideration your personal preference when it comes to building your investment portfolio.
Now, Personal Capital invests in 4 types of assets, they are paper assets, commodities, real estate investment trusts, and cash.
For paper assets, the company invests in U.S. and international stocks and bonds. For commodities, the company invests in energy and gold.
The details the company gathers from you, like your risk tolerance, personal preference, and so on, will determine the percentages of these assets in your portfolio.
Each asset class will be invested in ETFs or exchanged traded funds, except for the U.S. stocks. This asset class will be invested in 70 individual stocks that are well-diversified.
As for the investment strategy that Personal Capital uses, the company relies on Tactical Weighing. This means that the portfolio will have an evenly weighted exposure to each sector.
This allows for a more balanced portfolio and lessens the risk of being affected in case one sector experiences a problem.
Personal Capital’s use of ETFs also allows them to lower the income tax of your investment activities. This means your portfolio gets to maximize its net earnings.
The company also has the Social Responsible Investing (SRI) strategy, which you can incorporate in your investing activities.
This strategy means that the company will only put money in investments that comply with ESG or environment, social and governance.
Now that we have an idea of how the Personal Capital Wealth Management works, let’s discuss the requirements and fees.
To avail of the wealth management service of the company, the minimum investment requirement is $100,000. You’ll need to $200,000 if you want regular access to financial advisors.
As for fees, Personal Capital charges an annual fee of 0.89% for investments of up to $1 million. The fees go down to 0.79% for the first $3 million.
It will go down further to 0.69% for the next $2 million and further decrease to 0.59% for the next $5 million. If your investment is over $10 million, your annual fee is 0.49%.
If you’re going to invest this amount, the company will now categorize you as a private client. Not only will your annual fees be lower, but you’ll also have priority access to their certified financial planners and financial professionals.
You’re also a priority for other services, including private banking, estate, and even estate attorney and CPA.
Signing up for Personal Capital is simple and easy to do, especially for the free version. You just need to go to the company’s website and sign up.
You’ll be required to provide general information like email, name, and age. You’ll also be asked about the age you want to retire, how much money you want to retire with, and so on.
Once done, the next step is to just link all of your financial accounts to the platform and you are set to start using and maximizing the financial tools they have.
If you want to enroll for the wealth management version, you’ll need to contact one of the company’s financial advisors to begin the process.
The requirements to start will also be stricter since you’ll have to provide additional documentation like proof of identity and you’ll be asked to complete a questionnaire.
Once this process has been completed, the company will create your investment portfolio based on your answers to the questionnaire.
What Are People Saying about Personal Capital?
The majority of reviews and comments about Personal Capital are positive. A lot of people are actually recommending this opportunity especially to people who are looking for financial tools that can also help with managing and monitoring investments.
Though a lot of people recommend this company, it doesn’t mean that there aren’t any issues or problems with it.
Chief among the issues is the fact that you need to have at least $100,000 to invest if you want to avail of Personal Capital’s wealth management service.
This minimum investment requirement is too high for many people, making this service accessible only to high net worth individuals.
But the high minimum investment requirement is not the only thing you have to deal with. Another issue with this opportunity is the fact that the annual fee is high also.
This is especially true if you compare the company’s fees to other robo advisors. Sure, their fees tend to reduce if you invest more money. But not everyone will have millions of dollars available that they can put into their investment. So the lower fees are likely unreachable, even for a lot of high net worth individuals.
Another issue with this opportunity is the fact that asset allocation cannot be customized. The company only makes use of its predetermined asset allocation models.
These models will use the information that you provide to come up with an investment portfolio for you. Though that is already acceptable for a lot of people, there are some who still prefer to customize their portfolio.
So if you are someone who wants the option to have a customized portfolio, then you better look elsewhere as Personal Capital doesn’t allow that.
But don’t worry, the company has a free version, which means you don’t need to have a lot of money to use their service.
However, even the free version has its own issues and problems. One of the problems you are likely to encounter is the fact that you will receive a lot of sales calls from the company.
These sales calls are basically just the company’s way to try and entice you to upgrade your account to a paid version.
Now, this normally wouldn’t be a problem, but based on the experience of a lot of people, this tends to become annoying as the calls or even emails happen more often than they should.
Another issue with the free version is that the Budgeting tool is limited. This is especially true if you compare it to other budgeting tools available. One of the major limiting factors about the tool is that it doesn’t allow you to pay bills through the platform.
This means you still have to pay directly through your bank accounts, which means the platform is not yet a one-stop-shop for all your financial activities.
What I Like about Personal Capital
Now that we know what Personal Capital is and what they are offering, it’s time to discuss what I like about this opportunity.
- One of the things that I like about Personal Capital is that the platform allows you to completely view your entire finances. Not only can you see and analyze the income and expenses you incur, but you can also view and analyze your investments. The beauty of this platform is that it can even provide recommendations to allow you to maximize your investments and make more money in the process.
- Another thing that I like about Personal Capital is that the use of its financial tools are free. Yes, you don’t have to pay any registration or monthly fees when you join. You can enjoy all of their financial tools even as a free member. The only time you’ll pay a fee is if you get the wealth management version. And the fee you’ll pay is per annum. The amount, though, is determined by how much money you invest into your account.
- I also like that Personal Capital has a mobile app, which makes it easier for you to access and use the company’s services. This means that you can view your finances on-the-go and won’t need to access it from the company’s website. It’s also good that its app is supported by a lot of mobile devices, including Apple Watch and Android, so you won’t have to worry about the app not working unless you have a certain device.
- It’s also good that Personal Capital is very easy to use. You won’t have to worry about spending a lot of time learning how to navigate around the platform.
What I Dislike about Personal Capital
Of course, not everything about Personal Capital is good and dandy, as there are also a lot of things about this opportunity that I don’t like.
- The first thing that I don’t like about Personal Capital is that the minimum investment requirements are a bit high. You’ll need at least $100,000 if you want to invest with the company. And if you also want access to financial advisors, you’ll need at least $200,000.
- Another thing that I don’t like about Personal Capital is the fact that the management fee is also high, especially if you compare them to other robo advisors. You can lower the annual management fee, but it will require you to invest more money. You’ll need at least $3 million to lower the fee and if you really want to get the lowest possible annual fee, you’ll need to invest more than $10 million, a very steep amount if you ask me.
- I also don’t like that Personal Capital does a lot of upsells to try and convince you to upgrade to the paid version. Though there is nothing wrong with doing upsells, a lot of people describe it as a bit annoying. So if you’re not into upsells, then this could be an issue.
Do I Recommend Personal Capital?
After learning more about what Personal Capital is and what it can really bring to the table, I would say that this is one opportunity that is worth checking out.
Though the company has issues, particularly with the high management fees and minimum investment requirements, it has a free version that gives you access to all its tools.
It can help you with your budgeting, analyzing your expenses and even monitoring and analyzing your investments. The company will even provide recommendations to help you maximize the earnings of your investment.
All of the tools that you can use with the free version are more than enough reasons to give this opportunity a try.
It can really help you in managing your finances, thus also allowing you to utilize your income properly and achieve your financial goals.
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