Personal Capital is a wealth management company that offers a powerful suite of tools for tracking your finances. They are available to anybody, allowing you to see a complete picture of your financial situation all in one place. Here’s the best part: They are completely free to use.
We’ve been using these tools for several years, so we wanted to share our experience with you in this Personal Capital review.
In our opinion, Personal Capital provides the best free money tools you’ll find. There are no gimmicks or fine print to worry about, which makes them our favorite alternative to Quicken and other “pay to play” tools. Signing up for an account is easy, and you are under no obligation to purchase anything from the company. Use of the tools is always free.
If you’re interested in how they can help you track your finances, you’re in the right place. The following Personal Capital review – which has been completely updated for 2018 – provides a detailed explanation of each tool, describes how we personally use them, and offers tips for how you can make the most of the free tools that are available.
So, let’s get started, shall we?!?
Personal Capital at a Glance
- Founded in 2009
- 6 million registered users
- $500 billion in tracked accounts
- $6.5 billion in assets under management
Personal Capital Top Features
- Net Worth Tracker
- Cash Flow Tool
- Investment Checkup Tool
- Retirement Planner
- 401(k) Fee Analyzer
- AES-256 Bank Level Encryption
What Is Personal Capital?
While reading this Personal Capital review, it helps to think of the company as two separate services – free financial tools and wealth management services.
Personal Capital offers a robust suite of free financial tools to anybody who registers with a free account. In addition to a budget management solution, these tools provide various insights into your investments and overall financial standing. We’ll cover each of these tools in more depth below.
Additionally, Personal Capital offers fee-based wealth management services to investors. You are under no obligation to sign up for these services, even if you use their free tools.
The company was founded in 2009 and now claims $6.5 billion in assets under management. More than 1.6 million users have registered with Personal Capital, tracking over $500 billion across those accounts. They also use AES-256 encryption and require you to register each device you plan to use with your account.
For more information about Personal Capital and its mission, here’s an introductory video from CEO Bill Harris:
Personal Capital Free Financial Tools
If you haven’t started using Personal Capital’s free money tools, I think you’re missing out. This free financial software helps you track your spending, analyze your retirement portfolio, track your net worth, and more.
Frankly, these are the best free financial tools around. Best of all, there’s no obligation for you to buy anything. Simply link your information and track all your accounts in one place.
We have used Personal Capital for years. We love it and we think you will too. So, let’s look at the tools themselves.
Personal Capital has a super sweet dashboard which provides a snapshot of your complete financial picture. Whether you’re a newbie or an old pro, the dashboard is easy to use, allowing you to view all your accounts in one place.
On the Personal Capital dashboard, you’ll find balances for all of your linked bank accounts, a list of your current investments and their balances, as well as a quick peek at your monthly cash flow. You’ll also be able to check out your current net worth on an easy to read graph.
Here’s a peek at the dashboard:
How We Use It: Of course, the dashboard is the first thing we see each time we log into our account. It allows us to quickly see if there’s been any major changes to our financial standing. We simply check out what’s been happening on the dashboard, then move on to the other tools for more in-depth info.
Net Worth Tracker
Your net worth measures the worth of your assets versus the amount of debt you owe at any given time. Tracking and comparing your net worth over time is the best way to know whether your financial situation is moving in the right direction. It’s the best metric for measuring whether you’re winning with money, and it’s something that everybody should know.
The free financial tools at Personal Capital makes tracking your net worth a breeze. Just link all your asset accounts (banks, investments, etc.) with your liabilities (mortgage, student loans, car loans, credit card debt, etc.) and – voila! – Personal Capital does the math for you. You can even see your number directly from the dashboard.
By using the software, you can easily track your financial progress from month to month. Once you link your accounts, transactions are recorded on your Personal Capital account almost instantaneously. So, you can even track your numbers daily, if you’d like.
Here’s a screenshot of what this looks like:
How We Use It: Personally, we’d drive ourselves crazy if we checked our net worth every day. Since our investments and retirement accounts are part of the equation, net worth can vary greatly from day to day. Instead of riding the emotional highs and lows of the market, we look at our net worth about once a month or so, just to make sure we are staying on track. For us, building wealth is a marathon, not a sprint.
Cash Flow Tool
Personal Capital’s Cash Flow Tool is probably my favorite feature of all. This tool helps you create a simple budget through automatically tracking your deposits and your spending.
To get ahead (and stay ahead) with money, it’s important to know how much you have coming and going. Unfortunately, tracking this stuff can be a total PIA, especially if you’re doing it manually. That’s where Personal Capital can give you an advantage.
The Cash Flow Tool makes it easy to see exactly where you stand by automating the process. Once you link all your accounts, every transaction is recorded in real time. Personal Capital even tracks and categorizes each transaction for you. You can view each transaction by category, merchant, or date, making it super simple to see exactly where your money is going.
Frankly, the Cash Flow Tool is a huge time saver…and quite possibly the most valuable free tool you’ll ever use. Here’s an idea of what the overview looks like:
How We Use It: We use the Cash Flow Tool all the time. Since we rarely use cash, it’s a terrific way for us to track how much we’re spending. In fact, one of our favorite money management tricks involves the Cash Flow Tool. After creating your budget, check in with the cash flow tool a few times a week. Compare the amount of money you budgeted to spend with the Cash Flow Tool showing the actual amount. This helps you track where you stand and keeps you “on budget” throughout the month.
Investment Checkup Tool
The Investment Checkup Tool is another powerful addition to the Personal Capital lineup. After linking your accounts, this tool performs an analysis on the success of your investments. Then, it generates ideas for how they could do even better. You’ll even get a customized investment plan based on your current portfolio holdings and stated goals.
Specifically, the tool creates a target portfolio allocation that’s ideal for your financial situation. It then compares that target allocation to your current portfolio and makes general suggestions regarding your level of risk and potential for returns.
Now, if you’re a beginner, this isn’t as overwhelming as it might sound. Essentially, the Investment Checkup Tool helps ensure that you have the proper amount of exposure and diversification in your investments. Here’s a quick look at what you might see:
How We Use It: This is another valuable tool that we use on a semi-regular basis. As DIY investors, we consider the suggestions offered about our ideal asset allocation mix. Before making any changes, we always compare Personal Capital’s suggestions with those provided by our brokerage account. When they are both telling us to rebalance our holdings in a certain manner (which is almost always the case), we go ahead and make the change.
401(k) Fee Analyzer
While you’re going to incur costs with any investment, one of the keys to long-term growth is keeping those costs down. If you want to find out how much your current retirement accounts are costing you, this is the tool for you.
Personal Capital’s Fee Analyzer searches for hidden fees and shows you how much they’re costing you over time. It clearly exposes how much each investment is costing you and explains how those fees affect your retirement savings.
Here’s what the Fee Analyzer looks like:
How We Use It: This tool is super valuable if you have work-sponsored retirement accounts or you use a financial advisor. Rather than blindly shoving money into your retirement accounts, this tool plainly lays out what those investments are costing you. You can use that information to adjust your retirement savings strategy as needed.
Personal Capital also offers a fantastic retirement planning calculator. With this tool you can set your retirement goals and measure whether your financial plan is on track to meet them. It’s a pretty cool feature, and – again – it is completely free!
The Retirement Planner isn’t just a simple calculator, though. It also helps you plan for big expenses (like college, weddings, etc.), income events (like raises and social security payments), as well as analyze your spending and savings habits. So yeah, it’s pretty powerful.
Here’s a sneak peek at how it looks:
How We Use It: The Retirement Planner is another tool that we use on a regular basis. It’s a great “big picture” tool that is perfect for comparing your current level of savings with your stated goals. As I mentioned, you can also use this to ensure your savings is on track for other big expenses, as well.
Personal Capital Wealth Management
So, how does Personal Capital make money?
Simple. They provide wealth management services.
Personal Capital offers 3 different levels of investment services based on the amount of money you have to invest. You must link at least $25,000 in portable assets to be eligible for these services.
Investors with $200,000 to $1 million in investable assets qualify to have two dedicated financial advisors working on their account. Those with more than $1 million in investable assets are eligible for Personal Capital’s “Private Client” program. At each level, fees are based on a percentage of the total amount of money you have managed.
Again, it’s completely your choice whether you join Personal Capital’s wealth management program. You make the call. Even if you don’t join, you can still use the tools for free, no questions asked.
Personal Capital Wealth Management Fees
If you participate in the Personal Capital wealth management program, you’ll be charged a fee based on a percentage of the total balance you have invested through them. As of March 2018, the fees are as follows:
- Up to $1 Million Invested: 0.89% annually
- $1M to $3M Invested: 0.79% annually
- $3M to $5M Invested: 0.69% annually
- $5M to $10M Invested: 0.59% annually
- Over $10M Invested: 0.49% annually
Once again, this is an optional service. Using their financial tools is completely free, regardless of whether you choose to invest with them.
Benefits of Using Personal Capital
- Free Financial Software – As I’ve already said, the financial tools at Personal Capital are as powerful as any tools you’ll find. Best of all, they are completely free.
- Complete Financial Picture – With the Personal Capital dashboard, you can see all of your most important financial information in one place. This is great for tracking your financial health. For a more detailed analysis, simply click on the individual tools.
- Automatic Tracking – By linking your accounts, Personal Capital automatically tracks the most important aspects of your financial life. In addition to being convenient and saving you time, it’s also improve the accuracy of your tracking.
- Simple to Use – Linking your accounts couldn’t be any easier, and you can get started in minutes. Additionally, the graphs and charts within each tool are exceptionally easy to read and understand, even for novice investors.
- Variety of Apps Available – In addition to its desktop apps, Personal Capital is also available through a number of different apps – including apps for iPhone, iPad, Android, and Apple Watch.
- Socially Responsible Investing (new) – For those utilizing Personal Capital’s investment services, the company recently released their new “Socially Responsible Personal Strategy.” This service is designed to help clients wanting to invest in companies that are deemed to be “socially responsible.”
Disadvantages of Personal Capital
To be perfectly honest, there isn’t a lot about Personal Capital that I dislike. When it comes to the free tools, I’ve really got no complaints. The tools really are free, and you’re under no obligation to purchase anything.
With that said, you may be contacted about investing with the company. I’ve never found the calls to be overbearing, and a simple no is all it takes if you’re not interested.
When it comes to the investment services side of the equation, Personal Capital’s fees are higher than you’ll find with a robo-advisor but on par with other fee-based advisors. They are also all-inclusive, so you don’t have to worry about any hidden fees.
In my opinion, those with less than $200,000 in investments may be better off with a robo-advisor like Betterment. However, if you have more than $200K in investments and want more personal interaction, getting 2 dedicated financial advisors for a relatively low fee is pretty darn good.
Personal Capital Review: The Verdict
Here’s a shocker: We absolutely love Personal Capital’s free financial software.
I’m not kidding when I say that Personal Capital has the best free money tools around. They do. The tools are simple to use, easy to understand, and they are completely free!
Since you’re under no obligation to use their wealth management services, I don’t see any reason why you shouldn’t open a free account right away.
We use them. We love them. We think you will too.