Last Updated on May 4, 2022
Is Personal Capital a scam? Lots of micro-investing platforms, robo-advisors and personal finance management tools have been reviewed here at My Own Admin. Yet again, today, we are back again with another review from these products. A personal finance software going by the name Personal Capital has been recommended by websites specializing in reviewing tools like this.
The hype over Personal Capital piqued my interest and had me thinking what makes this personal finance software better and far more superior from its competitors. After a lot of research, the picture is finally clear!
In this Personal Capital review, I am going to reveal to you the reason why this might just be the personal finance assistant you have been looking for all along. However, depending on what we find out along the way, the flow of this review could still go the other way!
Before we start, I just want to disclose that I am not in any way affiliated with Personal Capital. All statements and opinion are coming from an unbiased and third-party point of view.
Now that we got that out of the way, let’s get right into it!
Personal Capital is a personal finance management software enabling you to manage everything regarding your finances be it money, savings, investments, or retirement accounts accessible to you in a single interface. The tools and services they offer aims to help you make smarter choices on how to spend your money wisely on every single aspect of your finances.
Bill Harris, formerly worked at Intuit, PayPal and CEO of PassMark Security, found Personal Capital Advisors Corporation back in 2009 and now has over 1.3 million users and more than $8 billion in assets under management as of 2018. It is currently based in Redwood City, California.
Is Personal Capital a scam? I know you’re already wanting to go over the answer to this question. But it is only fair to know how this personal finance software works from the inside to understand how we got to that conclusion.
What do They Offer
Personal Capital offers a lot of financial tools in the pursuit to effectively manage all your finances in one place.
- Financial Dashboard – The financial dashboard is basically your go to place to see everything concerning your finances like your net worth, cash flow, spending habits by account and category, investment returns, projected fees, and portfolio balances and allocations. You can gauge and monitor all your financial accounts in real-time.
- Cash Flow Analyzer – With this tool, you are enabled to view your income whether it be weekly, monthly or yearly. If you need to set spending goals and not diverge from your budget, you can also take a look at your spending habits which Personal Capital analyzes for you.
- Net Worth Calculator – You can have an idea of your net worth based on all of your financial accounts which includes retirement accounts, mortgages, investment accounts, savings and credit accounts.
- Retirement Planner – Personal Capital lets you set your own retirement goals. Therefore, you can track if you’re doing well on your pursuit to meet these goals. This tool takes into account your monthly income and other events in your life that may have implications on your retirement plan. You gain access to your spending goals and the projected value of your portfolio in the future.
- Investment Checkup – As the name implies, Personal Capital analyzes your investment portfolio for you and indicates how you can rebalance your porfolio for higher returns all the while minimizing the risks, as well.
- Fee Analyzer – This fee analyzer identifies all of the hidden fees that could later on accumulate to thousands of dollars and teaching you ways on how to handle these with care.
- 401(k) Analyzer – With the 401(k) analyzer, Personal Capital extracts your annual 401(k) expenses from all your financial accounts. From this information, you would see all the annual fees that are taking a toll on your retirement plan.
Personal Capital Wealth Management Service
Unlike robo-advisors in which your financial accounts are handled by a mathematical algorithm, you can gain access to Personal Capital’s real, actual, and registered advisors in charge of managing your financial portfolio.
With the wealth management service, your advisor assesses your risk tolerance, retirement, and investing goals. Plus, you will also be given investment recommendations which will enable you to meet your goals.
The service incorporates your MPT (Modern Portfolio Theory), minimizes taxes through tax loss harvesting, helps you reduce more on annual fees by directly investing in stocks, give you advice on your 401(k) and automatically rebalance your portfolio.
Another feature of this service is giving you freedom to link or create your joint accounts, trusts, taxable accounts, and traditional IRAs, be it Roth IRAs as well.
Take note, though, you can only gain access to this service once you have already invested at least $100,000. On top of this, there are recurring annual fees you would have to pay for. I’ll go over the list of fees later on.
Moreover, if you have invested over $1 million, you start gaining access to their Private Client group. Here, you will receive a certified financial planner of your own, a more comprehensive and personalized investment plan.
Other Additional Tools
Being a user of Personal Capital also gives you access to an array of additional tools and features.
- Retirement and estate planning
- Fund allocation
- Home purchases and refinancing
- College savings
- Email notifications
- Asset allocation target
- Retirement paycheck
- Upcoming bills reports
- Personal Capital Cash (a new account option Personal Capital offers which pays interest at the rate of 2.30% APY without requiring you to pay for any fees)
How Much Would You Pay
Following the freemium model, Personal Capital’s services are completely free to utilize for everyone! Yes, you don’t have to pay a single dollar to set your retirement goals, analyze your annual fees, track your cash flow, monitor your net worth from all of your financial accounts, create a budget and many more! Imagine having access to all these features for free, well, now you don’t have to!
But of course, there are features which are only accessible for a certain amount of money. Personal Capital would require you to invest a deposit of at least $100,000 to fully utilize their platform Wealth Management Services. This one has an annual fee of 0.89%
Now, these annual fees go differently depending on your investment as shown below.
- $1-3 million: 0.79% per year
- $3-5 million: 0.69% per year
- $5-10 million: 0.59% per year
- $10 million and above: 0.49% per year
Personal Capital Security Features
Personal Capital protects your account from unwanted security breaches through their two-factor authentication in which you would first have to authorize the device you are using. Afterwards, you would be asked to verify by either phone call or an email.
The data you share with Personal Capital is encrypted with AES-256 on top of a multi-layer key management. Personal Capital does not even have access to your credentials and information since it is stored by a third party company – Yodlee, the market leader in financial data aggregation.
If you opt to use Personal Capital through their app, for some devices supporting the fingerprint scanner, you can also use that to gain access to your account.
Lastly, this personal finance management software is designed in a way which you can’t perform withdrawals or transfers. You can just read the information presented on the screen, and that’s pretty much just it.
In the worst case scenario that your account is hacked, there is not much to do since money is not transferable into and outside your account.
To give you a tutorial and a sneak peak into the platform itself, refer to the video below.
Is Personal Capital a scam? I have found clues below that may piece out the answer to that question.
Can’t Pay Bills
You can get reports for your upcoming and pending bills. Unfortunately, that’s just about it. You can’t really pay bills with the platform itself. Although underwhelming, this has something to do with keeping your information a read-only interface, keeping your money safe in any case of a security breach.
Not for Everyone
Personal Capital is free to use, however, this doesn’t automatically mean that it is made for everyone. It might not suit everybody’s financial needs, especially beginners. This one has a LOT of features and some of it may be too complicated for beginners to understand. This platform actually targets high-end clients, those who can invest more than $100,000 to millions.
Since this is free, you may occasionally get sales calls from Personal Capital encouraging you to upgrade to the paid version. Of course, this could get annoying as you go on.
Can Get Pricey
Because Personal Capital does not utilize algorithms to manage your financial portfolios unlike a robo-advisor, the paid version can get more pricey compared to robo-advisors due to the presence of real human guidance. Plus, to be able to avail of the Wealth Management Services, this one would require you a minimum investment deposit of $100,000 which is undeniably higher than other competitors.
Available in App
The features of the app are the same as the desktop version. In fact, some of the features are only available in the app. What makes this significant is the fact that you can carry Personal Capital everywhere, making all your financial accounts and portfolio accessible in a single mobile interface.
Complete Picture of Your Finances
From your net worth, spending habits, investment accounts, retirement plans, college plans, and basically everything regarding your finances, becomes available to you in the cloud. This enables you to manage all of these in just one platform. Forget about searching for a software for just one specific purpose when you can have everything aggregated in one!
You can manage all your finances with Personal Capital without even spending a dollar! You can gain access to more features with the paid version, though. However, whether you avail of the free or paid version, you can be assured that you won’t be restricted and can still fully utilize the platform in your pursuit to spend money wisely.
Supports Every Financial Account
You can link all of your financial accounts whether it be your savings, credit, investment accounts, retirement accounts, trusts, joint accounts, taxable accounts, and etc. in this single software.
Personal Capital targets this platform to high-end clients and experienced investors rather than leaning towards the beginners in this niche. Taking this fact into account, you can expect to utilize lots of tools and features in your pursuit to manage all your finances with ease.
Personal Capital is definitely not a scam. This is a legit personal finance management software you can use for free to optimize and monitor all your financial assets in real-time. I’d definitely recommend Personal Capital if you want to paint a bigger picture of your money.
Even if it is free to use, you can still gain access to all the features it offers. Whether you avail of the freemium model or the paid version, Personal Capital assures you of exceptional services.
However, of course, this one is not for everyone to use. If you are a beginner in investing and managing your finances in a professional point of view, then you are better of with a much more beginner friendly personal finance software. You may not appreciate and fully utilize Personal Capital’s services if so.
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