Do You Know What All Your Investments Are? – Personal Capital Review

It’s tough keeping track of all of your money and investing accounts.

There’s your savings, checking, Roth IRA, Traditional IRA, 529 plans, investing accounts, 401(k) plans… it can go on and on.  If you’re lucky some of those accounts are with the same company so you can see a few of your accounts in one place.  But odds are you’re still going to need to jump around to get a complete picture of your finances.

It’s not impossible to track everything, for sure, but it can be a pain switching between accounts to see exactly what you are invested in for which account.

Wouldn’t it be great if you had one place that can give you a snapshot of your money?

And then wouldn’t it be awesome if you could get a better idea of your allocations to better make sure you are diversified  in the right places?  Oh, and if you could see what your fund fees were costing you in one spot that would be nice too, right?

Some objective financial advice based on your accounts would be a sweet thing to have access to as well, wouldn’t it?

Enter Personal Capital.

Personal Capital describes itself as “Your Next Generation Financial Advisor”, and it may be just that.

Not only does the application allow you to combine your various financial accounts in one place, but it also provides expert, personal investment management with low fees.

How Personal Capital Makes Your Life Easier


According to the Personal Capital website, the program provides “comprehensive and objective wealth management solutions for people with complex financial lives.”

The system allows you to track your total net worth in all of your accounts in real time.

That includes your checking, savings, investment, and retirement accounts, as well as any loan accounts including mortgages.  You can get the big picture on all of your financial accounts as though they were a single account.

They can also set you up with a personal financial advisor who will help guide you through the investing process with the company.

Personal capital uses “military-grade encrypted algorithms” that enable you to quickly and easily identify suspicious transactions in your accounts.

The program has various applications that not only allow you to track your investment performance, but also to make projections as far as both long- and short-term investment performance, as well as potential tax consequences.

What You Get With Personal Capital

You can sign-up for Personal Capital and link your accounts for free.  Really.  You can go try it out with an account or two and see how you like it.  If it’s great then add your other accounts and really see your finances as one.

This places all of your accounts under a single account where you get real-time information and know at all times exactly what your financial position is.

And it’s not just investing and banking accounts.  You can also track things like mortgages and loans.  It’s important to not only know what you have but also what you owe.

Why Do I Need to See All of My Accounts In One Place?

That’s a good question.  Imagine you have investment accounts in a number of places — 401(k), Roth IRA, taxable investing accounts, etc…  It’s probably not that much of a stretch of the imagination (I have accounts all over the place).

How do you go about tracking all of your investments together?  Do you even look at all of your investments as a whole?  Every time you make an investment decision, like deciding to buy a fund for example, it affects the whole picture of your finances.  You want to be able to keep to your allocation plan when you add more investments.  You also need to re-balance your investments from time to time.

But this gets cumbersome across a number of accounts, doesn’t it?

With Personal Capital you can check the performance of your entire portfolio in one place.  Take a look at how diversified your investments are.  With one click you see get exact percentages of each asset class in your portfolio.  This is so powerful for your investing plan.  Being able to look at everything to make sure that next investment doesn’t over-allocate you or even duplicate an investment is very helpful.

Personal CapitalPersonal Capital considers this to be a “holistic” approach to finance and investing.  And with this approach they can give advice and help manage your investment accounts.

How Personal Capital Analyzes Your Investments

The company bases your investment portfolio primarily on exchange traded funds (ETF’s).  They have lower fees than many mutual funds and certain advantages when it comes to income tax.

However, in using ETF’s as a base Personal Capital will also include various stock holdings in addition.  This is part of their approach of using Tactical Weighted Portfolios.  This helps to offset index funds that may be too heavily weighed in favor of certain stocks.  Their analysis has shown that this investment strategy produces better long-term results.

The strategy also uses global multi-asset class diversification, which includes a 70% to 75% mix of US equities, and 25% to 30% in foreign equities, most of which is from emerging markets.

As to the fixed income position, Personal Capital uses FDIC insured accounts at EverBank (here’s our review of EverBank).  In these accounts, you’re guaranteed to earn rates that are in the top 5% of competitive accounts from leading banks.  With a minimum of $1,500, you can invest in money markets, savings, and certificates of deposit (CDs).

The fixed income position also includes a mix of Treasuries, Treasury Inflation Protected Securities (TIPs), Agencies, Corporate Bonds and International Debt.

To serve as an inflation hedge, Personal Capital use investment alternatives, including real estate, gold and other commodities.

Basically their software will look at your investments and let you know about potential risks in your portfolio.  You’ll be able to also check the fees on your investments to see how they compare with industry standards.  This is important since high fees can drain your potential returns.

Keep in mind that these services are FREE.

You also have Personal Capital’s mobile apps at your disposal so you can check in on your accounts anywhere.

Open an account with Personal Capital.

personal capital dashboard

Personal Capital gives you access to all of your investments in one convenient place.

What’s Personal Capital Gonna Cost Me, Really?

As indicated above, you can sign up for a Personal Capital account and begin linking your accounts for free.  This includes getting recommendations for your portfolio based on their software.

But what if you want something more hands on and personal?

Personal Capital also offers a wealth management service with a team that has decades of experience handling billions of dollars for clients.  You can have this team at your disposal without having a portfolio that’s considered “ultra-high net worth.”

“So what does this cost,” you ask?  Great question.

Personal Capital uses a single fee to keep investing simple.  The fees are reasonable when compared to the typical fees charged by personal investment advisors.  Like most investment services, the fees you pay are tiered based on the amount of money under management:

  • First $250,000, 0.95%
  • Next $250,000, 0.90%
  • Next $500,000, 0.85%
  • Next $4,000,000, 0.80%
  • Remaining, 0.75%

Fees for 401(k) plan management start at .50%.

Their fees include management costs as well as any trading fees.  You get charged a flat fee for managing your portfolio where you won’t pay any trading commissions.

Is Personal Capital worth checking out?

What’s impressive about Personal Capital is their strategy of using a holistic approach to investing.

This takes your entire financial situation into account when deciding on asset allocations.  This is important as you probably have more than one investment account, including retirement accounts, that should be synchronized.  This will enable you to achieve true balance and diversification in your holdings.

The company also has a strong emphasis on real diversification.

They take the approach that you should “own some things that zig as others zag.”  This can be especially important during bull markets when there is a strong human tendency to load up on the winners.  Should the market turn, you’ll be better prepared with solid alternative investments.

Ever try to keep track of multiple investment accounts?  It can be a pain following what funds are in each account to make sure you don’t over-allocate in any one sector.  With Personal Capital you have all of your accounts under one umbrella so it’s easier to manage.

The low management fees, and absence of transaction fees, aren’t hard to take either.  The single fee for their wealth management services enables you to better project what impact fees will truly have on your long-term investing results.  You also aren’t getting hit with a barrage of trading fees every time you make a trade.

The company has no ties to large investing firms that may lead to pushing the sale of certain investment products that may not be the best for your portfolio.  The investment advisers are not compensated differently based on your holdings.  That allows for true objectivity in a way that doesn’t always happen with investment management companies.

True story – back in the day when I was starting to get more involved in my finances I looked into starting an investment account.  I went to my brick and mortar bank that also had a major investment firm attached.  What did their representative sitting across from me suggest?  A number of loaded funds from their firm that would net him and the firm some nice commissions.  My point is he couldn’t objectively suggest good places to put my money because he had an incentive to sell his firm’s products.

Final Word on Personal Capital

Personal Capital is a great tool to keep track of your investment and banking accounts as well as your loans.  Having access to all of your accounts at once helps you make better investing decisions.  And that it’s free doesn’t hurt either ;)

Personal Capital’s wealth management is worth checking out, especially if you move into the intermediate investor range of $100,000 and up.  This is where investing, and finances in general, often start to get complicated and unnecessary fees begin piling up.

Get Started With a Free Personal Capital Account now.

Have you had any experience with Personal Capital?

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Published or updated October 1, 2014.

Comments

  1. This is just one of the best thing on Personal Capital because it’s totally free! This is a great review, we just did a review of Personal Capital on our site too and I couldn’t believe how much information they give you for free. Almost seems too good to be true

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