Advertiser Disclosure

Personal Capital Review: Is Bill Harris’ Software The Future of Money Management?

July 10, 2013
Advisors, Investing
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.

Personal Capital’s wealth management platform aims to create a next-generation, highly integrated financial planning website rivaling and perhaps surpassing the more well known ones such as Mint and Wealthfront. Launched in 2011 by former PayPal CEO and finance veteran Bill Harris, the company has grown into a legitimate competitor, managing more than $500 million in assets for some 2,000 clients.

NerdWallet here provides an overview of the company’s offerings and breaks down the pros and cons. Our takeaway: it’s like “ on steroids,” and Personal Capital is a great option for an investor with assets looking to ramp up their investing know-how by getting professional advice online.

Interested investors can learn more and sign up for Personal Capital here.

Overview: What Personal Capital offers

Personal Capital offers an integrated investment platform with multiple options and levels of involvement, from free analysis software to financial advisor services (for those with more than $100,000 in investable assets). It provides account linking so you can monitor your finances all in one place, giving you live updates on all of your transactions. This helps you track everyday spending, plus your monthly debts and your income, to give you a better understanding of your overall financial picture.

However, where Personal Capital stands out is in its several free tools and integrated dashboard features, where users can:

  • Monitor asset allocation and track portfolio performance against major indices
  • Identify potential portfolio risks
  • Calculate their mutual fund fees over time
  • Understand how 401(k) fees may affect their retirement goals
  • Check a mutual fund fee calculator, which tells them how much fees could eat into investment gains over time
  • Use award-winning mobile and iPad apps to manage their money from anywhere

And there’s no cost, unless you later want to purchase premium advisory services.

NerdWallet spoke with Harris to get a sense of why he started Personal Capital:

“I’ve spent twenty-plus years in the business, building pieces of financial technology to improve the financial lives of consumers. Personal Capital is my opportunity to bring the entire puzzle together. Our technology enhances the personal financial experience, and it is necessary to also have personal attention from an objective financial advisor to provide a human touch so they can build and maintain a strategy that works for them.”

Personal Capital has tried to combine the best of both worlds when it comes to merging online money management with personalized, case-by-case guidance.

Personal Capital vs. Mint vs. Wealthfront

While similar to Mint in that its integrated dashboard allows users to link all of their accounts to see their entire financial picture, Personal Capital goes a step further to help investors navigate their personal financial data to make more informed decisions. Mint is well known for helping people learn how to save, budget and track their consumption, but it is less robust when it comes to providing useful investing advice. Personal Capital, however, comes with free tools like a 401(k) fee analyzer, which tells you if you are paying too much in fees, plus tools to help you track your net worth and manage your investments.

There are online advisors out there like Wealthfront, FutureAdvisor, Betterment and Jemstep, but these sites forgo the financial advisor in favor of technology and algorithms.

Advantages and benefits of Personal Capital:

  • It offers top-tier and highly personalized service at a fraction of the cost of most big banks’ financial advisors.
  • It provides many of the benefits to investors at a much lower price than you would typically see at a high-end broker—it’s OK if you don’t have millions to spare. In fact, the median net worth of a Personal Capital client is roughly $457,000.
  • Personal Capital says its advisors have decades of experience managing billions of dollars for individuals and large institutions. Personal Capital is not a broker, so it doesn’t push products; instead, the company works as a Registered Investment Advisor (RIA) with the SEC.
  • Even if you do not yet have $100,000, its free software and dashboard are available for users of all levels of investment expertise to monitor their progress.
  • Personal Capital adds a personalized element, rather than relying entirely upon a predetermined equation to tell people how to invest.
  • It’s free and easy to try. Setup takes only minutes, and there’s no obligation to continue or to purchase advisory services.

Downsides of Personal Capital:

  • To get one-on-one guidance from an advisor in crafting a personalized strategy, investors must be willing to commit $100,000 in investable assets, at which point there is one all-inclusive fee.
  • Many of the investment planning tools offered by Personal Capital are available elsewhere for free.

Is this the future of financial management?

Since 2011, Personal Capital has grown at a tremendous pace: the company currently manages more than $500 million in assets for roughly 2,000 clients, and is growing 10% month over month. At this pace, Personal Capital could surpass widely used apps like Mint in popularity.

Note: Personal Capital is not a broker; rather it is a Registered Investment Advisor (RIA) with the SEC, and offers users with at least $100,000 in investable assets the opportunity to work with personal financial advisors.