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Personal Capital Review – Managing Your Financial Life in One Convenient Place

Tom
May 1, 2014
Review of: Personal Capital
Personal Capital logo

Reviewed by:
Rating:
4.5
On May 1, 2014
Last modified:November 3, 2021

Summary:

Personal Capital is designed to make sure you can see all your different financial products in one place.

We all have a huge array of financial products and it can be difficult to really keep up with what is what and where.

If you do indeed have different financial products, such as an IRA, a Section 529 plan, and a mutual fund, it is a real struggle to quickly see what your balance is. This is where Personal Capital comes in, however.

Who is Personal Capital?

bill harris ceo personal capitalPersonal Capital was founded by Bill Harris, who most know from his role as CEO of PayPal and Intuit. Through Personal Capital, he has managed to raise $28 million in venture capital.

Other executives within the company are certified personal planners and have worked in finance for many years.

What is Personal Capital for?

Personal Capital is designed to make sure you can see all your different financial products in one place. Additionally, a range of personal financial planners are employed by the company, who give you advice on how to best manage your money. As such, the system is designed to allow you to have greater financial control.

The emphasis for Personal Capital is strongly on investments and complex financial planning, including income tax planning, asset allocation and tax loss harvesting. It is less focused on credit cards and basic transactions, in that respect.

How Does Personal Capital Work?

First of all, you must open up an account, which is free. This gives you access to an online interface, where you can link all your financial accounts. Hence, you have to authorize each of these accounts as well, but this is done in an efficiency and easy to use manner. Once your accounts linked, it will remain linked, meaning you will always have access to the most up to date information on your account.

The information is then aggregated into beautiful graphs and charts, which helps you to see how your investments and savings are doing. This also allows you to see how your market performance is doing.

How Personal Capital Money Management & Financial Planning Works

 

The features offered in graphs and charts include:

  • Income reports
  • Account balances
  • Asset allocation
  • Spending reports
  • Projected investment fees
  • Investment returns

Features of Personal Capital

Because the program focuses strongly on retirement planning and investing, most of its features are designed towards that. They include:

  • The 401(K) fee analyzer, which allows you to see what your current retirement plan actually costs. Most people do not really know what the fees are they pay into these plans.
  • The investment checkup, which includes expert recommendations on the asset locations of your investments. Personal Capital will first determine your risk profile and base their advice on that.
  • The asset allocation target, which allows you to see whether you need to focus more (or less) on a certain type of equity.
  • Fund costs, which allows you to see exactly how much your different investment packages cost you each year.

Create a Free Personal Capital Account Now

What I Liked about Personal Capital

  • The system can be used across a range of devices, including mobile and tablet. Hence, you can always be up to date about your accounts.
  • It is very user friendly, with linking your accounts only taking a few minutes. The charts and graphs are also very easy to understand.
  • The service is designed to bring all your financial products together, allowing you to see everything at a glance, which also makes it easier to compare and to understand your assets.
  • You get automated emails to tell you how your weekly net worth has changed. Additionally, you can request different alerts to be sent to you, including bill alerts.
  • Advice is provided on how to reduce your taxable income and how to lower your capital gains tax.
  • It comes with a range of free analyzers, which look at such things as the fees you have paid on your various financial products. This is a particularly beneficial tool, since most people do not actually know how much they pay in fees.
  • Personal Capital also offers a performance checker, which builds on the free analyzers above. This is designed to make sure you know how your different assets are performing, which allows you to ensure your money is actually in the right place.
  • It also includes an asset allocation tool, which shows you what your difference assets actually are (bonds, foreign and domestic stocks, cash equivalents and so on). If you are not aware of the different investment classes you are reaching, this tool can be really beneficial.
  • Personal Capital is made up of a team of financial experts, which means the advice you receive is sound and tailored to your needs.

What I Didn’t Like about Personal Capital

  • It does not include a budgeting tool. Of course, this is mainly due to the fact that Personal Capital is designed to help you monitor your investment. Additionally, it does show your monthly outflow, so you do have some information available.
  • Personal Capital no longer shows annual tax costs in their reports, which is a feature they did offer in the past. You are able to see the tax costs incurred on your retirement accounts, but this report doesn’t show any potential fees.
  • You cannot customize your asset allocation reports. The model it uses is fully predetermined and although it is applicable to most people, it doesn’t leave a lot of possibilities for those who want try out different assets.
  • Some people have noticed that not all of their assets would be categorized, or that they were categorized incorrectly. Unfortunately, this cannot be manually changed.

The Final Verdict on Personal Capital

Personal Capital only offers money management services for those who have an investable asset threshold of at least $100,000. However, even those who do not reach that can still find various benefits by working with the company. Indeed, around 90% of your investment returns are known to be determined by your asset allocation, rather than by your stock selection.

Hence, the help Personal Capital offers is fantastic in terms of reaching any financial goals you have set yourself. Added to this its user friendliness and the fact that the account is free and I fully recommend this program to anybody.

Create a Free Personal Capital Account Now

Personal Capital Video

About the author 

Tom

Tom is a former accountant turned entrepreneur. He is not a financial adviser but does tend to give a lot of financial advice to his friends and colleagues. He currently runs a small online venture and blogs about his research and experiences.

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