Personal Capital review 2021

Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more.

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Personal Capital Logo

Best For

  • Higher-net-worth clients
  • Tax-loss harvesting
  • Portfolio construction

Personal Capital transforms the experience of a human financial advisor into the digital world, melding together some of the top features of each. The robo-advisor provides unlimited access to human advisors who can customize a portfolio to your financial needs while providing the advantages of automated tax-loss harvesting, for example. To access this level of service, you’ll pay one of the highest management fees among robo-advisors, though you’ll still likely beat the costs of a traditional human advisor and maybe get other better features, to boot. 

Those looking for access to human advisors should also check out Schwab Intelligent Portfolios and Betterment, both of which offer unlimited access to advisors as part of their packages. 

Personal Capital at a glance

Star Rating

  • Cost: 3.5 of 5
  • Investments and Portfolios: 3 of 5
  • Account Types: 4 of 5
  • Features and Tools: 5 of 5
  • Customer Experience: 3.5 of 5
  • Account Minimum:
  • Management Fee:
    First $1 million: 0.89 percent; Private clients: Up to $3 million: 0.79 percent, next $2 million: 0.69 percent, next $5 million: 0.59 percent, over $10 million: 0.49 percent
  • Account fees:
  • Portfolio Mix:
    Customizable by client. Accounts may hold at least 70 individual stocks to take advantage of tax-loss harvesting.
  • Fund Expense Ratio:
    0.08 percent
  • Account Types:
    Individual and joint taxable; plus Roth IRA, traditional IRA, SEP IRA and rollover IRAs; trusts
  • Cash Management Account:
    Basic deposit account that offers interest with no account minimum
  • Customer service:
    Phone from Monday-Friday 11 a.m. - 9 p.m. ET, email
  • Tax Strategy:
    Tax-loss harvesting, stock-level loss harvesting and optimized asset location
  • Rebalancing:
  • Tools:
    Net worth calculator, savings planner, budgeting tool, retirement planning, education expenses, mutual fund fees, and many more
  • Promotion:

Pros: Where Personal Capital stands out

Three tiers of high-touch service

Personal Capital offers three (somewhat confusingly named) tiers of service, depending on how much you bring to the table, with a lower management fee and more perks at each level. Here are some of the highlights at each tier: 

  • Investment Services – The entry-level plan includes access to a team of financial advisors that can aid with financial planning and review your investments. You’ll receive a personalized portfolio using only ETFs, tax optimization (more below) and rebalancing. Accounts from $100,000-$200,000. 
  • Wealth Management – In addition to the features in the first tier, the middle tier substitutes two dedicated advisors for the team of advisors and gives you access to specialists who can help with further decisions (such as insurance, stock options and compensation). Your portfolio can also include some individual stocks in place of ETFs. Accounts from $200,000-$1 million. 
  • Private Client – Besides the features in prior tiers, you’ll have access to further wealth planning services (such as for estate and tax issues), access to private banking, and may have your portfolio constructed with individual bonds and private equity investments, subject to enough assets. Accounts from $1 million and up. 

This range of services, especially at the high end, is typically not offered at other robo-advisors. In fact, not very many robo-advisors offer access to human advisors as part of their standard package. But that’s part of the reason they’re called robo-advisors. They also don’t usually have such a large minimum to get started, and more typically require zero or just a few hundred dollars.

Sophisticated portfolio construction

Personal Capital constructs portfolios using ETFs, its own selection of individual stocks, and at higher services tiers, bonds and private equity investments. The access to private equity is restricted to portfolios with more than $5 million in them, however, and it’s a novel feature among robo-advisors. 

Regardless of which tier you’re in, you’ll get access to what Personal Capital calls Smart Weighting. Think of this feature as a way to re-weight the holdings in your portfolio so that they deliver more return without taking on more risk. For example, in many traditional ETFs, the largest companies are weighted heavily, while small or medium companies are weighted less. This means you may be “over-indexed” (i.e. overexposed) to the largest stocks in the fund. 

So Personal Capital re-weights your portfolio to eliminate some of this overexposure that may not drive higher returns. It looks at your holdings by industry, style (growth vs. value investing, for example) and the size of the companies in the portfolio. Smart Weighting more equally weights these three factors to deliver better risk-adjusted returns, says Personal Capital.

Personal Capital creates socially responsible portfolios using the same methodology, too, and avoids the relatively pricey ETFs offering similar products. To create them, the robo-advisor analyzes rankings on ESG factors (environmental, social and governance) from third-party evaluator Sustainalytics. It picks the top scorers and then weights them according to its proprietary methodology, and then this basket is used for a portion of the U.S. stocks allocation. 

A range of useful tools

Personal Capital offers a large selection of tools to help you analyze your portfolio, see how much you might need in the future for a given expense, figure your net worth and many more. It’s great for anyone to check out, because even if you don’t become a client, you can use many of the tools, though Personal Capital does offer other tools exclusively to clients. 

Some tools available to everyone include the net worth calculator, which pulls in data from your linked financial accounts. You’ll also have access to a savings planner and a budgeting tool. You’ll have tools for retirement planning, education expenses, fees on your mutual funds.

If you’re a client, you’ll have a few extras, including a financial roadmap and personal strategy tools. You’ll also be able to analyze your employer-sponsored plan such as a 401(k) to see how it aligns with your personal strategy developed by the robo-advisor.

Detailed returns data

Personal Capital provides detailed information on the returns on some of its portfolios, at least in the aggregate. It’s rare to see returns data publicized, and it’s taking a chance here. While the returns data overall is good, it shows the robo-advisor falling just short of its benchmarks. 

For example, in its “full growth” portfolio, the robo-advisor returned an average of 12 percent annually to investors (net of its fees) in the five-year period ending March 31, 2021. Viewed in the absolute, that’s not bad for a broadly diversified portfolio. But compared to its benchmark, which returned 12.5 percent over the same time period, it looks a little less impressive.

And it’s the same for the other composite portfolios presented, with narrow underperformance ranging from 0.1 to 0.3 percent annually. 

It’s also worth noting that Personal Capital provides the after-fee returns, so you really can have a fair comparison to a benchmark portfolio that you could have otherwise purchased.

Access to human financial advisors

One of Personal Capital’s strongest selling points is the access to financial advisors, and here you’ll have a team or two dedicated advisors (depending on your service tier). With the advisor you’ll develop your personalized financial plan, and the advisor acts as your ongoing point of contact, answering your routine and not-so-routine questions.

A financial advisor is valuable, in particular, for two major reasons: the ability to answer those non-routine questions and concerns, and the ability to get you to stick to your financial plan when times get tough in the market. And these are the issues that Personal Capital focuses on. In fact, its advisors are trained in behavioral coaching to help you maintain your discipline. 

If a real coach can keep you to your plan during the hard times – when many investors sell their investments to avoid further loss and ultimately cost themselves gains later – then you may make back Personal Capital’s hefty management fee and then some. 

Multi-pronged tax strategy

Personal Capital uses three strategies to maximize your total returns: asset location, tax-loss harvesting and using tax-efficient securities. 

By placing assets in the most tax-efficient location – taxable accounts versus tax-advantaged accounts such as an IRA – Personal Capital estimates that it might increase returns about 0.3 percent annually through this strategy. 

Tax-loss harvesting is the practice of selling losing investments to offset the gains in others. It’s a smart way to lower your tax bill, and Personal Capital estimates that you could add 0.2 - 0.4 percent to your annual returns. 

Personal Capital also uses more tax-efficient securities, with ETFs instead of mutual funds. That’s not novel among robo-advisors, but what is notable is that Personal Capital may use at least 70 individual stocks in portfolios at its higher service tiers. The use of stocks allows tax-loss harvesting to generate more savings, or what’s called stock-level tax-loss harvesting. 

Stock-level tax-loss harvesting is a prominent feature of Wealthfront’s robo-advisor service, too. 

Quick comparison of Robo-Advisor options:
Robo-Advisor Overall Rating Cost Rating Investments and Portfolios
Personal Capital logo
3.5 3 of 5
Betterment review 2021 logo Read Our Review
5 5 of 5
Wealthfront review 2021 logo Read Our Review
5 5 of 5
Schwab Intelligent Portfolios review 2021 logo Read Our Review
5 4.5 of 5

Cons: Where Personal Capital could improve

Fee structure

There’s just no two ways about it: Personal Capital is expensive relative to the rest of the robo-advisor industry. Whereas the rest of the industry has rushed to make their services cheaper – even free in some cases – Personal Capital seems comfortable charging more. 

Now, to be sure, Personal Capital charges less than a typical human financial advisor, where about one percent of your assets is a standard fee for service. And you’ll get that level of perks at Personal Capital. And the fee structure does decline as you bring more to the relationship. 

If you’re in the robo-advisor’s first two service tiers, you’ll be charged an annual 0.89 percent of assets up to $1 million. So your first $100,000 will cost you about $890 annually, as will each subsequent $100,000 in your account, up to $1 million. 

If you move up to the private client tier with assets above $1 million, your fees will begin to decline: 

  • Your first $3 million will be charged 0.79 percent annually
  • The next $2 million are charged 0.69 percent annually
  • The next $5 million are charged 0.59 percent annually
  • Any amounts over $10 million are charged 0.49 percent annually

This tiered structure means that you’re paying the corresponding level of fees at each level until your assets surpass the next threshold. For example, if you brought $4 million, you’d pay 0.79 percent on the first $3 million and then 0.69 percent on the next million.

Personal Capital’s management fee is all-inclusive, so you won’t be paying extra for ETFs as you would at other robo-advisors. Even still, the all-in cost is still significantly more expensive. At the entry-level tier, you’d still pay an advisory fee that’s more than twice that at a standard robo, where much of the industry sits at 0.25 percent (plus ETF fees of around 0.1 percent). 

So you’ll have to decide whether the key benefits are worth the extra price you’d pay for them.

Cash management account

For such a high-end service, Personal Capital’s cash management account – called Personal Capital Cash – seems downright low end, at least for now. The account pays a modest level of interest that’s in line with what’s offered by the major banks, and is FDIC-insured up to $1.5 million through the robo-advisor’s partner banks. And that’s about the extent of it. 

The account has no minimum balance and you can make an unlimited number of transfers each month. You won’t get a debit card, though Personal Capital says they’re working on it. The cash account is available to those who aren’t clients of the investing service, so you don’t need to meet the $100,000 minimum to start doing business with Personal Capital.

This cash management account may be a nice adjunct to your investing account. However, with feature-rich cash management accounts at Betterment and Wealthfront, which also don’t require you to be an investing client to open one, it’s tough to recommend Personal Capital’s account. 

High account minimum

Perhaps the most obvious – and negative – way that Personal Capital stands out from the robo-advisor pack is its high account minimum. It’s $100,000 just to get in the door. That minimum applies only to the investing account, not the cash management account. 

For any investor just starting out, it’s going to be much more advantageous to begin with a lower-cost service with a lower minimum, and see how that works for you. You may well find that the cost-competitive option fits your needs just as well as Personal Capital. 

Bottom line

Personal Capital brings a lot to investors – sophisticated portfolio construction, optimized tax-loss harvesting, and high-touch access to advisors. The question is whether the fees are worth those benefits. One of the biggest differentiators here is the access to qualified human advisors, so if that’s a real perk for you, Personal Capital may be a good fit.

But if you’re looking for access to advisors, you should also look at Schwab Intelligent Portfolios, which offers unlimited access to human advisors for a flat monthly fee. Betterment offers access to advisors as part of its premium tier of service, or you can buy à la carte access when you need it. Ellevest also offers a flat monthly rate with à la carte pricing for human advisors. 

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