Personal Capital Review: Consolidating Money Problems With Tech-Charged Personal Finance

Personal Capital

Who doesn’t like flashy graphics and cool technology, right?

And once in a while, a service like Personal Capital comes along to remind us why eye candy and tech-powered simplicity is a groovy combo.

If you dig comprehensive reviews of personal finance tools, then boy-howdie, you’re in for a treat! I’ve done other complete reviews, like with Quicken and Mint.com through Start Investing with $100, and there’s more where that came from.

Today, I’m taking Personal Capital for a spin. But before we get started, I recommend listening to Personal Capital’s CEO, Mr. Bill Harris, explain its benefits in his Smart and Simple Matters interview.

With that housekeeping done, it’s time for the good stuff. This review is perfect for people who:

  • Are comfortable with online aggregators or have already used a service like Mint or YNAB.com.
  • Have a somewhat to totally complicated financial life.
  • Are highly visual and like complex data simplified.
  • Would rather have a human manage their money than an algorithm (e.g., Wealthfront or Betterment).
  • Focus on long-term financial health.

Use the jump links to navigate to different sections of this Personal Capital (referral link) full review and decide if their services are right for you.

(This is also a great time to download the tools that I and countless others use to simplify, organize, and be money wise).

Enter Your First Name and Email Below and Click

Jump Links

Personal Capital Free Sign Up… in 49 Seconds?

Right away, Personal Capital’s home page has a bold claim:

Making sense of your money takes only 49 seconds. Click here to sign up for our free money management software.

Turns out the claim is true as my sign up process took 47 seconds.

Personal Capital Sign Up

After confirming my user ID, password, and phone number – which a Personal Capital Registered Investment Advisor (RIA) will use to call you if you link accounts worth over $100,000 – I was done.

Personal Capital Sign Up Complete

Now it was time to get crackin’ on the first thing people normally do after signing up: linking financial accounts.

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Get Cracking: Initial Use

Personal Capital aggregates your financial accounts with credit card companies, banks, or investment companies similar to other aggregators like Mint, Yodlee, or Quicken.

Personal Capital Link Your Accounts

Here’s what their account linking process actually looks like:

1.  Click on the “+” icon in the My Accounts section of the page.

Personal Capital My Accounts

2.  Enter the financial company name or their website address.

Personal Capital Link Your Accounts

Note: consider adding your home value, investments you can’t automatically add, or your car/jewelry/art collection value for a more complete financial picture.

Personal Capital Add Other Assets

3.  Enter your log on information and click “Continue.”

Personal Capital Finish Verifying Linked Account

Note: additional security information like your challenge questions or secondary verification items may be necessary.

Personal Capital Verifying Secondary Security Info Linked Account

4.  (Optional) Click on the pencil icon in the My Accounts section and then edit any details of the imported account.

Personal Capital My Accounts Edit Pencil

In this example, I changed the Account Name field (which displays in many places) from the pre-populated text to something meaningful.

Before:

Personal Capital Linked Account Original Name

After:

Personal Capital Linked Account Modified Name

5.  Click the Save button and keep adding as many financial accounts as you like.

Profile Settings You Care About

Hover over your email address at the top of the page and click “Profile” in the drop-down to explore your settings.

I’d encourage you to check the “Weekly” box in the Profile Alerts to get a weekly email from Personal Capital about your financial activity and investment performance.

Personal Capital Peridoic Email Profile Setting

Nifty stuff is available like the change to your account balances and net worth, bills coming due, linked accounts that need attention, and more.

And now for the bread-and-butter of Personal Capital, starting with the dashboard.

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The Dashboard: Holy Interactive and Colorful, Batman!

The first thing I noticed with the Personal Capital dashboard is how visually striking it was. Once I got past being dazzled with a snapshot of my net worth, cash flow, portfolio balances, and portfolio allocation, I noticed another theme: cursor hover effects and general interactivity.

(Don’t tell anyone, but at one point I just started hovering over everything … just to see what would happen).

That’s pretty and often functional, but how does the rest of website perform?

Accounts and Transactions

There’s a lot to like in the transaction section. For example, I dig the fast transaction searching and sorting by date, financial account, category, tags, or dollar amount.

What I don’t dig is their pre-populated transaction categories which you can’t manually change. And the tags aren’t very useful because you can only assign them based on four pre-populated values (Business, Medical, Reimbursable, and Tax Related).

Personal Capital All Transactions

Bill Harris told me that this simplicity is intentional though. So prepare to be disappointed if you’re looking for Mint or Quicken-style transaction micro-management.

Taking It to the Bank

As a former Mint user and longtime Quicken power user, Personal Capital’s Banking section falls short.

Personal Capital Cash Flow

To their credit, tracking or reporting cash flow and bills isn’t Personal Capital’s focus. It’s just a value-added service so you can get your minimum needs met without using another aggregator.

But where Personal Capital really excels is at investing (which you’ll see in a moment).

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Investing: Now We’re Talking (and Acting)

I signed up for a Personal Capital account primarily to see if the reviews I read about their investing tools were accurate.

The short answer is: yep!

The long answer is: it depends.

Let’s start with the Portfolio section to see how they handle investing differently than their competitors.

Portfolio Tools

The first thing you see is the rolling performance of your linked investments – The “You Index” – versus the S&P 500 Index.

Personal Capital Portfolio

You can tweak this visual in many cool ways like:

  1. Clicking the tabs for “Dow,” “NASDAQ,” and “10-Yr (U.S. Treasury) Bond” to change the benchmark.
  2. Clicking the “All Accounts” drop-down to change which linked accounts are analyzed.
  3. Changing the date range to see your investment performance over different time frames.

I wanted to understand more about this “You Index” thing though. According to Personal Capital:

The ‘You Index’ is the performance of all of your current stock, ETF, and mutual fund holdings for which we are able to retrieve a current price on a public market, extrapolated backward. It does not include your cash, money market funds, individual bonds, options, or other alternative [investments].

Basically, it’s an incomplete (but still valuable) performance reference point.

If you scroll down to your actual holdings, you can sort by number of shares, price, value, and a few other things. Unfortunately, I’m bummed that I can’t delete columns I don’t care about or add columns of more meaningful metrics to me.

But as I played around with the Allocation tab, I found very colorful asset allocation information.

Personal Capital Asset Allocation High Level

The awesome thing is that I can drill down on each asset class for more detail.

For example, I’ll see the breakdown between developed countries like the U.S. and emerging market countries like Vietnam if I click on “Intl Stocks.”

Personal Capital Asset Allocation Detailed Level

I can drill further if I click on “Developed” to see the breakdown of developed county assets across my various mutual funds.

Personal Capital Asset Allocation Micro Level

Minor beef: Personal Capital classifies real estate assets like a Real Estate Investment Trust as an “Alternative” investment. Gold and commodities as alternative investments? Sure. But real estate? That’s standard stuff in my opinion.

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Doctor: Are My Investments Healthy?

I’ve never seen a tool like the Investment Checkup one in all my years of using personal finance systems.

The utility is contextual though as Personal Capital identified good things and bad things about my investments, along with highlighting legitimate concerns.

Personal Capital Investment Checkup

Pro tip: Personal Capital won’t have a full picture to make actionable recommendations unless you link all your financial accounts and/or manually manage them. Kudos to them though for acknowledging this limitation when you click the “Add Account” button.

Only some of my financial accounts are linked and I can see why they called out certain “risks” that are actually non-issues with the full picture.

Yet as I ran through their analysis, they told me that my asset allocation is “Mostly Unbalanced” based on my target allocation. I assume they automatically set my target allocation based on my age, retirement window, and risk tolerance… but I’m not sure.

Personal Capital Investment Checkup Allocation

What surprised me most was that I was flagged for having more than 25% of my portfolio in mutual funds.

The note tells me that mutual funds often have high fees, large embedded costs, and are highly tax inefficient (all true). But all my mutual funds are low-cost index funds that are inherently tax efficient.

Personal Capital Allocation Warning

Note to the programmers: analyze my investments deeper to know your warning isn’t valid for me. Speaking of analyzing…

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401(k) Fee Analyzer: What’s Lurking in Your Plan

I haven’t had a 401(k) since I gave up the “good life” for a great life. But my wife Melinda has one, so I linked hers to play with Personal Capital’s 401(k) Fee Analyzer.

Personal Capital 401k Fee Analyzer

I know that the threat from excessive 401(k) management fees and fees within your investments is real. But Personal Capital should present information that leads to me knowing what action(s) I might take to reduce my excessive fee risk.

Verdict: not useful until future upgrades are made.

How Personal Capital Makes Money

So you signed up for free and now wonder:

How do these guys make money?

Personal Capital’s main income stream is from having their RIAs manage your assets on a sliding scale.

Personal Capital Fee Structure

The fee structure is transparent and competitive with most RIAs (who charge 1% or more of assets every year). But I was contacted by one of their RIAs three times by phone and once by email without opting-in to their RIA service.

That bothered me.

An alternative to the Personal Capital human touch and a different fee structure are impersonal services like Betterment.

The trade-off is that Betterment won’t help me manage my deeply emotional relationship with money like a Personal Capital RIA will.

One thing’s for sure though. You can help worthy causes through Personal Capital referrals.

They give Habitat for Humanity $20 when signing up through your referral link (yep, that’s my referral link) and linking two financial accounts.

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What’s the Catch?

I don’t see any major catches with Personal Capital.

They seem to have their bases covered with data security, support, and disclaimers about partners and third party software (although you have to dig to find everything).

Most importantly, what does all this mean for your bottom line?

Is Personal Capital Worth It?

I can see Personal Capital’s non-RIA services being useful for anyone, even people outside their age 35-65 sweet spot or without $100,000 in assets.

However, a great New York Times blog post comment is worth paraphrasing. The commenter said:

Personal Capital offers a streamlined, web-based service instead of an in-person full-service experience… but there is little difference in the fee structure. If I can get the same service in-person for 1%, I’m not sure a slight fee discount would make it worth my while. Also, many people I know have a big chunk of their money tied up in 401(k)s and/or homes – things we can’t turn over to an asset manager [like Personal Capital]. [I want] someone whose focus is meshing all of the parts together vs. just managing the non-401(k) part.

Despite this valid comment, I would recommend Personal Capital if you fall into any of these categories:

  • You aren’t satisfied with Mint.com or other similar services’ investing functions.
  • You appreciate transparency and not being bombarded with upsells.
  • You like pretty things.
  • You want to stay at home and still get professional wealth management help (since RIAs are available via phone, video chat, and email).
  • You value robust data security and privacy.
  • You’re a big picture thinker with an appetite for (optional) specifics.
  • You use mobile apps a lot (since their Apple or Android apps are pretty good).

My bottom line: Personal Capital is the most visual and interactive personal finance tool I’ve ever used. I’m a black and white “put it in a spreadsheet” kind of guy, but even I was dazzled by how pretty and functional the experience was.

Even without speaking directly to Personal Capital’s CEO, the $50 million they’ve raised in funding means they’re determined to constantly improve an already solid service.

I say sign up now and give them a try.

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Now it’s your turn to review this Personal Capital run down.

How was this review helpful? Do you have experience with another product or service that could be compared to Personal Capital? Leave a comment and share your insight!

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21 Responses to Personal Capital Review: Consolidating Money Problems With Tech-Charged Personal Finance

  1. cj says:

    Thanks for such a high-quality, info filled post, Joel. I love this, but I wonder if after setting it up I’d ever look at it. Methinks our finances are far too simple for such a complex system. More money would fix everything and make it possible and necessary to use such a system. Have a marvy one!!!

    • You’d probably look at a tool like Personal Capital if you had more money, CJ. Hurry up and get more cash so your life can get so complex that you need technology to fix it and restore some simplicity. ;)

      All kidding aside, Personal Capital isn’t for everyone (like everything in life). And despite their CEO telling me that his company and their services weren’t designed for people with a simple financial life, I think a lot of folks with small amounts of money could still benefit from their free services. The Apple and Android apps are groovy too if you’d rather stare at a small screen for viewing simple dollar amounts. I’m having a marvelous day and I hope you are too!

  2. Ethan says:

    Yep, I’ll echo what CJ says. It looks really sweet, but maybe more complex then I need. I recently switched to YNAB for my budgeting and I”m really digging how simple and clear it is. It doesn’t do anything with investments though, so I could see where this could come in and do good things for me.

    • If only there was a great personal finance tool that could handle daily money management, budgeting, income and expense tracking, credit cards, investing, taxes, retirement, and real estate in one place. Oh, wait. There is one and it’s called Quicken. :)

      But Quicken’s not free and it certainly isn’t simple. At least not in the way that I use it to manage most of my personal finance needs. You Need a Budget is awesome at what it does and you should keep using it. But Personal Capital could be just the thing if you want to supplement your financial tools with something designed specifically for investing.

  3. Shanna says:

    I researched Personal Capital and Betterment when I was researching Mint and YNAB. I tend to agree with what you’ve put here. I preferred the human touch to algorithms (even if I know, logically, that algorithms tend to make better choices). Plus the interface is really amazing.

    It’s not for me right now, since we have few assets outside the house and car, but I have it tagged for future usage when we have more investments.

    • I’m glad you mentioned the human touch vs. algorithms part, Shanna. Unlike curating where human subjectivity is essential, we often need to get out of our own way when managing money and our relationship with it. It just touches too many emotional hot points that even behavioral economics can’t adjust for.

      I sleep best when my investments are passive (e.g., Vanguard index funds) and have enough financial savvy that I can manage my own money. But some people need that human touch of a CFP or Registered Investment Adviser to simply stay sane. I wish investing didn’t pit your sanity against your potential bank account balance, but it really does for a lot of people I know. That’s why I’m hopeful that a combination of technology, personal finance literacy, and algorithms can make investing in the 21st century more rewarding and simple than the chaos of the 20th century. Because even some really smart people lost far too much money investing in the past. And it doesn’t need to be that way anymore.

  4. David Delp says:

    Nice thorough review, and I listened to some of the interview as well.

    Almost all software I use, I wish did something else. I manage my money with a combination of spreadsheets, about 10% of what Quicken does and a monthly assessment I scribble out on good ol’ paper. It’s hard to imagine this tool will help me as much as a few meetings with a human could.

    I am actually looking for a fee-based (not commission-based) financial advisor. Good ones are hard to come by, especially ones with quality investment advice, so I make my investments based on another simple spreadsheet of allocations. I’m not very confident about them.

    That chart of hidden costs is really good to see. I have no idea how much I’m paying, and your review makes me wonder, is there anyone who doesn’t cost a ton of money out there to help me avoid those fees? I’m doubtful I can find them. I think the whole industry is based on them.

    The geek in me loved this. Thank you.

    • Well I won’t recommend Quicken to fill gaps in your personal finance life since you already use it and have decided most of it isn’t relevant. And I certainly won’t deter you from using spreadsheets because we all know I love a good spreadsheet!

      The wealth management world is shifting heavily from commission-based models to fee-based models, so perhaps you won’t have as hard of a time finding a pro the next time you search. You asked if anyone doesn’t cost a ton of money in fees and still offers the human touch when needed. I think a company like Vanguard might meet your needs as long as you invest mostly in mutual funds/ETFs and don’t trade often.

      There are plenty of good apples in the wealth management industry and more are popping up every day. After working for a wealth management company for over a decade, I’ve seen a lot of shady stuff and serious conflicts of interest. But I’d lump Personal Capital in with the good apples and I could recommend some other companies that might work for your unique needs.

      • Michael Moritz says:

        David may want to consider Flat Fee Portfolios http://www.flatfeeportfolios.com/. It is about 200/month and you do get a human managing your account. I have not used them but it looks intriguing.

        • David Allen says:

          Thanks for this Michael. It looks very interesting.

        • David Allen says:

          Thanks, Joel for the article. It was very educational. I am also looking into Betterment and Wealthfront.
          And I like Personal Capital for its pie charts of my expenses. I currently use an Ameriprise Investment Adviser. He’s a great guy and has been very helpful in the personal dimension. But I am reevaluating the high fee structure and exploring these more passive, low-cost options.

          • I’m intrigued about Betterment and Wealthfront, but I just haven’t been motivated enough to fully look into them. I’d love your insight on either platform once you dig in and feel like you know your way around.

            Kudos for having the awareness to reassess your financial status quo, David. I find it beneficial to re-evaluate (almost) everything from time to time (even the things that I like and are going well).

  5. Michael says:

    I’m more of a Quicken user, but I know I’m not getting everything out of it that I could. I pretty well use the bill planning feature as my method of budgeting, but I know there is a more efficient way. I just haven’t taken the time to work through tutorials for Quicken’s budgeting section.

    • Personal Capital isn’t the cavalry for budgeting, Michael. Investing… maybe. But they admit that the banking and day-to-day transactional stuff just isn’t their focus. Ethan, Shanna, and other regulars ’round these parts swear by ynab.com though, so check that out if you haven’t already. I tried budgeting with Quicken and decided I liked the flexibility of an Excel spreadsheet better. But I doubt that surprises anyone since I loves me a good spreadsheet!

  6. Erin says:

    I DO like pretty things!

    Thanks for this thorough, Joel-worthy review. This sounds more heavily weighted toward the investment side of things, though, so maybe not quite what I need.

  7. BC says:

    In the display that shows the “You Index” your shows 0% in the tab like mine. I find this really confusing so I’m confused as to what it is supposed to indicate.

    That is a complaint I have throughout the site. They have data that are not defined. Under portfolio performance, does the 30 day % column reflect the internal rate of return or does it simply show the balance change, including incoming cash flow? The site devotes a lot of its analysis to one-day numbers of which I care very little.

    • I’d ignore the “You Index” if I were you, BC. As I mentioned in the review, there’s not much practical use and you seem like me in that you’re most interested in what’s practical.

      I also agree that certain data aren’t defined well. That’s probably intentional because Personal Capital strives to simplify (which often means not providing details and manual manipulation of data). I still prefer a personal finance power-tool like Quicken, but a lot of people have told me that Personal Capital is more their speed. I hope you can get answers to your questions from an employee at the company. I don’t think you actually wanted me to try and field any, right?

  8. Cautious says:

    I am struggling with the concept of handing over my account usernames and passwords given my circumstances. I am 50 years old and have been fortunate to build up ~$2M in investable assets…so I have a lot to lose if my accounts are compromised. The recent Target compromise is an example of the reality of the threat even though it is a different situation.

    However, I could definitely benefit from this tool because I have quite a few accounts and it is difficult to have a good handle on the true asset allocation of the entire portfolio. I have established a net worth tracking spreadsheet, but it is very limited in functionality.

    What would prevent an unethical employee of Personal Capital or a hacker from stealing my info/data/money? What liability would Personal Capital incur for a security breach that led to a financial loss? Is the access that is provided to the accounts only allow them to access data and not make any transfers/withdrawals/transactions?

    • I live where Target has their HQ, Cautious, so I’m well-versed in the risks and fallout. I also worked in the investment industry for a decade and had access to over a million people’s most sensitive financial (and non-financial) information. Let’s just say I’m hyper-aware of what might happen if my information falls into the wrong hands.

      Granted, each place you give access to your sensitive data and the more you start to interlink your financial world together, the greater the risk of bad things happening to it. I just decided long ago that the upsides of using online financial tools far outweighed the downsides. A tool like Personal Capital or Quicken can run circles around an Excel spreadsheet in a lot of ways (and this is coming from a guy who loves Excel).

      I’d encourage you to read Personal Capital’s Privacy and Security Policy before signing up (I did). Although nobody can guarantee your information is 100% safe on an indefinite basis, I was impressed with their foresight and level of protection. But what’s to stop an unethical employee of theirs from stealing your money or confidential stuff? Only their internal policies and systems, which I can’t speak to. There are millions of financial industry employees and very, very few of them ever do something criminal. That’s what I remind myself every time I think about bad apples.

      • Dan says:

        I, like Cautious, have quite a few accounts that I check monthly to throw in an excel file that I track. The analysis there is only watching the total numbers, not the true asset allocation.

        A few minutes ago, I got off the phone with my Personal Capital advisor, and I must say, I was impressed. There are 2 things I like most about the idea, and 1 that I know I will miss.

        1. I like that they are able to use technology and algorithms to keep my portfolio on track. I need it with the number of funds I try to track.
        2. I like that they are so tax focused. One thing that really stood out was how they will use their algorithms to keep your tax costs down (which I have a big problem with having primarily taxable accounts)

        My dislike is that there isn’t a real person that I can go chat with. I am trying to convince myself that at the end of the day, I would rather see better returns than a real person, but we’ll see where it takes me.

        I’m leaning towards the fee based system with them, but am unsure still.

        Great review, by the way!! I was smiling and nodding the whole time. Thanks!!!

  9. We just did a Personal Capital Review too and I wish I would have found it sooner. It’s amazing how they can break everything down and analyze your 401 (k) funds.

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