Even with the most disciplined minds, managing finances isn’t always as easy as it appears. However, certain applications and platforms have been created by different individuals and financial management bodies to assist people in finance management. One of these management platforms is the Personal Capital financial platform. Now here’s the question: is Personal Capital a scam or robo-advisor behind it can really make you rich in the near future?
Let’s dive into my Personal Capital review and find the answer of the above question!
Product Name: Personal Capital
Official Website: https://www.personalcapital.com
Owner: Bill Harris, Rob Foregger, Louie Gasparini
Type: Financial Advice & Service
Cost to Join: Available in Both Free & Paid Versions
Summary (Read this if you have no or very limited time)
If you don’t have much time, read these few lines to know what Personal Capital is all about and how it helps people to make a financial decision. As it’s mentioned, this company provide financial advice and based on the membership you choose (Free or Paid) different types of services will be available to you.
If you think that you won’t get much if you go for Free membership, you’re completely wrong because what you have access to as Free features of Personal Capital is much more than many paid financial management tools out there.
As I’ve told you, Personal Capital is one of those few financial service platforms that mixed human and robo advisors which is a new and unique feature among financial service companies. This feature called Wealth Management and a deposit is required if you want to take advantage of it.
Although this minimum deposit is not something new and it’s requested by many similar companies when it comes to financial service but the amount of money is required as the minimum deposit is much higher than standard which makes it hard for many people to use Wealth Management feature and start investing through Personal Capital.
Although Fee analyzer, Portfolio analysis or Cash flow are some other tools offered by Personal Capital which can be used as free features or needs a little investment but Wealth Management is still the main one so it’s up to you if you’re willing to deposit that much of money or not.
Recommended? Yes, especially the free version
Overall Rating: 7 out of 10
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What Is Personal Capital All About?
Founded in 2009 with its headquarters in San Carlos, California, Personal Capital has grown to become the most prominent finance managing platform in existence. On this platform, there are two basic versions known as the Wealth Management and the Free Financial Dashboard. While over two million users utilizing the Free Financial Dashboard, over 18,000 users transact with the Wealth Management version worldwide.
I’m happy to see you here in my Personal Capital review article. This shows that you are serious to find the facts and truth about this investment company and want to know if Personal Capital is something that can you can rely on it or not. So let’s find out!
Providing financial advice through robo-suggestions is actually a new form of online advising and it’s going to get more and more famous between people who are looking for financial advice & services because it cuts the expensive cost of using real financial advisors and provide a cheaper option for people who don’t want to be charged hourly for using expensive services of financial advisors.
But making all your financial decisions based on a robo-advice does not seem to be very logical and that’s why companies like Personal Capital decided to build a platform which is a mix of both human and robo advice and let you take benefits of both sides.
This was just a short introduction for Personal Capital to give you a better overview of this investing platform which let you set your expectations logically and doing research (like what you’ve done now) helps you don’t fall into semi-good products which are waste of the time.
Before starting my review, I want to make you sure that I’m not linked to Personal Capital in any form like partnership or an affiliate and what you read in this article is all my own opinion about this online financial advisor and personal wealth management company and like all other of my reviews here, helping you to make the best logical decision.
As you know, decisions are largely emotional, not logical and this is what I want to protect you from because financial decisions are not something you can make based on emotional.
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How Does Personal Capital Work?
A minimum incipient investment sum of $100,000 is required to operate the Wealth Management version; and a minimum of $200,000 is required to receive the steady services of financial advisors.
Under the Wealth management version, data such as customers’ investment objectives, risk tolerance, and time frame are usually first collected. Then based on individual demands, portfolios are created for users and a recurrent balancing of clients’ portfolio is also done to keep up with asset allocations. The Modern Portfolio Theory then is applied in managing customers’ portfolios while their funds are invested across several classes of assets that include:
- International stocks and bonds
- U.S. stocks and bonds
- Liquidated assets
- Other investments such as energy and real estate
The data collected from customers by Personal Capital is further used as an investor profile to determine the proportion of each client’s portfolio in each class of asset. For every class, investments are made in exchange-traded funds at low cost to efficiently expose the asset to the markets at low ratio of expenses. Tax optimization, as well as tactical scaling, is then accomplished by holding the allocation of the U.S. equity in more than 70 stocks.
The Free Financial Dashboard
Often referred to as the budgeting version of Personal Capital, this version basically functions as a financial summarizer. It also provides investment help to users and enables them to bring the whole of their financial lives under one platform.
Although users who use the Wealth Management version often upgrade from the Free Financial Dashboard, the free version still has enticing and useful features such as:
Budget Making: The free version of the Personal Capital affords users the platform through which they can monitor and analyze their financial transactions. Nonetheless, it isn’t exclusive to budgeting as it does not function in bill payment and clients still need to make transfers through their bank accounts.
Cash Flow Analysis: Based on the accounts users connect to this software, the cash flow analysis tool helps them create a budget. It also monitors their income and expenditure to enable them set financial objects and also come up with a plan of action to realize them.
Other sub-tools under cash flow analysis include:
- Personal advisory platform
- Net worth estimation
- Retirement planning
- 401(k) analysis
- Investment assessment
Wealth Management Version
This is the version of this platform where users actually get to receive the services of certified financial advisors and get their funds invested in various platforms.
It is important to note that while this platform may be similar to robo-advisors – and even utilizes automated features, it is in no wise a robo-advisory platform as human advisors are usually involved.
- Account custodian (Pershing Advisor Solutions)
- Account security against broker incompetence by SIPC
- Financial Advisors
Extra Features of Personal Capital
Mobile Application: Personal Capital affords its users the convenience of carrying their financial manager around with them through the mobile application. It is available for Android and Apple devices and can be downloaded from both stores.
Customer Support: Both the Free Financial Dashboard and Wealth Management customers can get phone or email support 24 hours every day. However, only those using the Wealth Manager has access to two human financial advisors.
Impressive Security: Certain security measures are adopted to ensure user data is secured. They include continuous tracking, military-level encryption fingerprint scanning (on iOS devices), two-factor verification and read-only platform.
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Personal Capital – Pros & Cons
The Positive Points
- Invaluable Financial Advice: Users get to receive important financial pieces of advice even for free. They also get to enjoy a vast number of investment and budgeting advantages.
- Investment and Budgeting in One Page: This platform affords customers the convenience of managing both budgeting and investments on one platform.
- Optimization of Taxes: Personal Capital minimizes the taxes your investments attract by strategically optimizing tax on your investments.
- Financial Advisors: Every Wealth Management client is entitled to two financial advisors for as long as they utilize the platform.
- Socially-Accountable Investments: With Personal Capital, clients can rest assured that their assets are invested in trustworthy platforms.
The Negative Points
- Expensive Initial Investment Sum: This means that medium and small scale investors do not stand a chance in using the Wealth Management version of this platform.
- Exorbitant Fees: While this platform ranks between human and robo advisors, its fees are between 2-4 times (0.89%) more than those of robo-advisors.
- Annoying Appeal to Upgrade: Clients find the appeal to upgrade from the Free Financial Dashboard to the Wealth Management version quite irritating.
- Partial Budgeting Feature: Compared to platforms like Quicken and Mint, the budgeting feature of Personal Capital is somewhat inefficient.
Can You Make Money With Personal Capital?
As my previous articles about making money ways, I’ve explained that in platforms like Acti Labs you need to make sales in order to make money but in services like Personal Capital your financial decision is the only thing that determines if it’s a profitable opportunity for you or not.
The answer to this question is obvious. You can make money with Personal Capital in the following ways:
- The returns on the investments you make through the platform.
- Selling the service on social media.
- Creating and writing blog posts about it.
- Writing reviews on the service.
Final Word – Is Personal Capital a Scam or Legit?
No illegitimate product or service can remain and thrive in the market for up to 10 years as Personal Capital has. Also, given the various testimony of users, Personal Capital is, therefore, a legit means of budgeting and making reasonable investments.
There’s only one way to get convinced about the potency of Personal Capital – trying it yourself. As a matter of fact, you can begin with their free version; and if you’re convinced enough, you can go ahead to make an upgrade to their Wealth Management version.
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