Advantages, disadvantages and who should create an account

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Is personal capital for you?

Personal Capital is a digital platform offering wealth management, free financial tools, cash management accounts, and more. Since the lowest amount you can start with is $100,000, the platform is best for wealthy clients.

The mobile app is available on iOS and Android devices.

Personal Capital vs Merrill Guided Investing

Personal Capital and Merrill Guided Investing are both suitable for hands-off investors who don’t want to deal with the day-to-day legwork of maintaining an investment portfolio. Merrill Edge’s two accounts – Merrill Guided Investing Online and Merrill Guided Investing with an Advisor – are better options for those looking for lower minimum requirements.

Personal Capital and Merrill Guided Investing offer similar fees, but Personal Capital is the better choice for investors who want access to a wider selection of investment types. Personal Capital’s wealth management services and financial tools are also hard to beat. While Merrill Guided Investing offers the option of being guided by an advisor, two of Personal Capital’s service levels offer access to multiple dedicated advisors.

Personal Capital vs Vanguard Personal Advisor Services

When it comes to fees, you will pay less in all aspects with the Vanguard Personal Advisor Services account. But Personal Capital’s wealth management services give you access to more investment types than Vanguard’s personal advisor services.

Personal Capital customers with lower balances pay higher fees and customers with higher balances pay lower fees. The same goes for Vanguard’s wealth management account. Therefore, the maximum you will pay is 0.30% per year and the minimum you will pay is 0.05%.

Ways to invest with Personal Capital

Digital Wealth Management

Like many automated investment platforms, Personal Capital is best suited for investors who value a hands-off approach. The company separates its portfolio management offerings into three tiers:

  • Investment Services: This level is ideal for those with between $100,000 and $200,000 in assets. It offers unlimited access to financial planning and retirement advice. Plus, you’ll get a personalized portfolio of ETFs, plenty of digital planning tools, and support from human advisors.
  • Wealth management: The wealth management component goes up a notch. It gives you two financial advisors who offer ongoing advice and support, and it tops that off with a personalized portfolio and tax optimization strategies. Plus, you’ll be able to take advantage of specialists in real estate, stocks, and more. To qualify, you will need to have more than $200,000 but no more than $1 million.
  • Private customer: Reserved for those with over $1 million in investment assets, this tier offers private equity investments, specialist wealth and retirement planning support, two financial advisors and priority access to its investment committee and its specialists. Note, however, that the private equity option is only available to those who have invested $5 million or more.

Regarding investment types, the first level only offers ETFs. Personal Capital’s wealth management tier offers ETFs and stocks, while its private client services focus on ETFs, stocks, bonds and private equity investments.

Many robo-advisors primarily offer a choice of assets (such as ETFs or mutual funds), so Personal Capital’s investment selection is ahead of the competition. He also uses Personal Strategy+ to manage employer-sponsored retirement plans such as 401(k)s and 403(b)s.

Compared to other digital advisors such as Wealthfront and Fidelity Customized Planning & Advice, Personal Capital’s fees are quite high. The advantage of this, however, is that it still charges less than what most traditional consulting firms charge. While Personal Capital charges 0.89%, traditional advisors typically charge 1%.

Investors can choose between two different portfolio strategies: personal strategy and socially responsible investing.

personal strategy

With the personal strategy, Personal Capital invests your money in a globally diversified portfolio of stocks and ETFs. It relies on both its technology and advisor monitoring to build portfolios, and each includes portfolio rebalancing, tax optimization strategies such as tax loss harvesting, smart weighting and access to advisers.

Socially responsible investment

With this socially responsible investment portfolio, you can have the platform focus your portfolio on companies that have high environmental, social and corporate governance (ESG) standards. Personal Capital focuses primarily on US and international equities and with these portfolios.

Personal capital: is it trustworthy?

The Better Business Bureau gives Personal Capital a B+ rating to reflect its opinion of the investment platform’s interactions with its clients. BBB ratings range from A+ to F, so this is a pretty high score.

The BBB also considers several other factors when reviewing companies. These include business type, length of activity, customer complaint history, advertising issues, licensing, and government actions. But since its ratings do not guarantee a company’s reliability or performance, you should also do your due diligence before opening an account.

Personal Capital has closed 10 complaints in the last three years and seven complaints in the last 12 months. He has no unresolved complaints at this time, according to BBB data.

Personal Capital — Frequently Asked Questions (FAQ)

Is personal capital legitimate?

Yes. The platform offers its advisory services through Personal Capital Advisors Corporation, an SEC-registered investment adviser. All SEC-registered companies are legally required to act as fiduciaries, which means they must put the interests of clients before their own.

The investment platform has also been in operation since 2009 and offers FDIC insurance.

Is Personal Capital free?

No. The Personal Capital app Personal Capital charges an annual asset-based fee, which means the amount you pay per year depends on your account balance.

Is Personal Capital worth the fees?

Compared to other popular wealth management services, Personal Capital’s management fees are higher. Those with $1 million or less will have to pay 0.89% per year. Management fees decrease as your account balance increases, but the minimum you’ll pay per year is 0.49% (this fee is for users who hold more than $10 million).

It is best to fully examine your financial situation and weigh the pros and cons of Personal Capital before opening an account.

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