In a world of Robinhoods, Acorns, and dozens of other online DIY investing and personal finance applications on the web, there’s one platform that often gets overlooked. We’re talking about Personal Capital.
Despite being one of the most useful and feature-rich investment platforms on the market, many investors simply don’t know enough about it. And that’s a shame – because it really does have some amazing features and advantages. But, in total transparency, there are also some drawbacks. So let’s roll up our sleeves and analyze it all – good, bad, and ugly – for a comprehensive Personal Capital review for 2022.
It’s difficult to put a label on what exactly Personal Capital is. It’s a hybrid on so many levels. There are retirement and budgeting tools, net worth tracking features, human advisory elements, robo-advisory elements, budgeting features, portfolio analyzers, and so much more.
Perhaps the best way to describe Personal Capital is as a cutting-edge personal finance tool that blends objective financial analysis with tailored financial advice. The basic features (which are actually pretty unique and innovative) are free, while the wealth management service is the upsell.
As mentioned, Personal Capital is a hybrid platform that combines elements of different tools, including budgeting applications, high-end robo-advisors, and portfolio management tools that replace the need for complicated spreadsheets and financial dashboards.
While we’re going to list off some of the different features of Personal Capital, each of these are actually built into one single platform. And that’s the beauty of it. Rather than having multiple accounts or applications, the developers have integrated everything into a single dashboard that allows you to see and access all of your financial assets in one place.
With that being said, let’s dig into some of the nitty-gritty of what Personal Capital is all about.
At the very basic level, Personal Capital can act as a sophisticated yet intuitive budgeting platform. It looks a lot like some of the other rival applications on the market – including Mint – and does a nice job of giving users a visual overview of where their finances stand at any given point in time.
One of the nice features of Personal Capital’s budgeting platform is how easy it is to link to things like mortgages, car loans, and other loan accounts. This allows you to create your own payment plan, see the remaining principal balance, and even get notified when bills are due.
There isn’t necessarily much that separates Personal Capital Budgeting from other budgeting apps on the market. They simply use that as a way of getting users onboarded. The real value starts with the platform’s free investment planning features.
To get the most out of Personal Capital, I recommend linking your investment accounts. There are literally hundreds of different integrations that allow you to link up with other brokerages (like Fidelity, Schwab, etc.), checking accounts, savings accounts, insurance policies, mutual funds, individual stock investments, and even cryptocurrency investments. There are even ways to track precious metals and cash.
After you’ve entered in all of your assets, you’ll have a sleek looking profile with lots of charts and graphs. This is your interactive investment planning dashboard. Add in as much additional information as you’d like, including biographical details, income, savings behaviors, and goals. Based on this information, the native “retirement planner” will show you whether you’re on track for meeting your goals, how much you’re likely to have at different ages, and simple tweaks for improving your financial standing.
One of my favorite features of Personal Capital is the net worth tracker. Rather than having to track down every account and asset you own and add up each line item in a spreadsheet, Personal Capital spits out your net worth in real-time. You can track it over time and see how things are progressing. You can even plug in your home and it’ll use the Zillow Zestimate combined with the remaining principal on your mortgage to include your home equity in this calculation.
While all of the features mentioned above are free, Personal Capital does have a wealth management feature that gives you access to more specific financial advice.
If you have $100,000 in investable assets to manage and are willing to pay for advice, you’ll gain access to robo-advisor wealth management features. You’ll also be able to access live fiduciary advisors who can answer specific retirement questions and help you set up comprehensive financial plans.
If you think this wealth management feature is just a lazy add-on the company uses to make some quick money, think again. It’s one of the most sophisticated robo-advisory platforms in the industry.
Personal Capital employs an entire team of financial strategists, behavioral economists, and leading advisors. Their platform uses Monte Carlo simulations, real-time analysis, and a blend of cutting-edge features that employ a combination of low-cost EFTs, individual stocks, and bonds to give each user tailored portfolios that help them reach their goals.
It’s easy to see the advantages of using Personal Capital. Some of the top pros include:
Personal Capital isn’t without its flaws. Here are some of the drawbacks and disadvantages:
The decision to use Personal Capital ultimately comes down to each individual user. From a net worth tracking and budgeting perspective, it’s a no-brainer. You’ll be hard-pressed to find other tools online that match what this one can provide. However, if you’re looking for robo-advisory for investment assets, you’ll have to weigh the pros (excellent features and intuitive dashboard) against the cons (high minimum investment and higher than average fees).
If you’re looking for an alternative to Personal Capital, consider some of the following:
There’s no perfect, one-size-fits-all solution for everyone. At the end of the day, it all comes down to your personal needs and preferences. For many, Personal Capital is a great fit. For others, Betterment may be a superior option. And for some, you may want to use Personal Capital as a net worth tracker and another platform for wealth management.
I recommend exploring different platforms, playing around with free features, and finding the one that works best for you and your needs.