I write this Personal Capital review as a long-time user. I’ve used Personal Capital for several years to track our income, expenses, and net worth. I hope this review will help readers better understand the service.
Personal Capital is best described as a “financial account aggregator.” After connecting your bank account, credit cards, mortgage or auto loans, investment accounts, and any other financial accounts, the free service will summarize your financial situation and offer personal financial planning guidance.
Personal Capital is similar to Mint’s online budgeting service, but much more comprehensive. Like Mint, Personal Capital provides a comprehensive budgeting solution. Unlike Mint, Personal Capital provides a robust set of tools and resources to help you manage your investment portfolio, asset allocation, taxes, and retirement planning. All of these services are provided free of charge.
More than 1,400,000 users are now using the free Personal Capital platform to track more than $350 Billion in assets. In addition to the excellent free financial tools, Personal Capital is a Registered Investment Adviser (RIA) managing nearly $5 Billion in assets under management.
Here is a brief introduction by the founder, Bill Harris, on the purpose of Personal Capital:
After opening a free account, you first link your financial accounts to the online interface. This involves authorizing each account within Personal Capital. I found this to be extremely easy and efficient on the desktop version of the program. You simply click a small plus arrow, specify the type of account, and fill in the online credentials.
After linking your accounts, they remain linked until you unlink them or change any of the account information (password, login info, etc.). Each day, your account information is automatically updated in real time.
The site then aggregates all of your financial information into a colorful series of charts and graphs to help you make sense of your income, expenses, and investments, allowing you to better understand your financial situation.
The online interface provides information about your:
Within each category, you can explore all of the nitty, gritty details.
Personal Capital Budgeting
Personal Capital allows you to easily create a budget, set a monthly spending target, and view your progress in real time.
If you select your income profile within the Personal Capital dashboard, you can see all forms of income broken down by date and source. If you have multiple bank accounts, you can see the deposit information for each account, as well as the aggregate total income.
Similarly, you can track your spending down to the penny. Every credit card swipe. Every debit card swipe. Every bank transaction. All can be viewed in your account dashboard in real time.
You can also analyze each purchase and categorize spending by date, merchant, and category.
Personal Capital also allows you to stay on track of bill payments. You can view previous payments made and upcoming bills that are due, as well as the minimum payment required and the total balance outstanding.
These different features all blend seamlessly for an excellent user experience. Because of the robust features, I now prefer the Personal Capital interface to Mint’s online interface.
Retirement Planner and Investment Checkup Tools
Personal Capital recently released their retirement planning tool, which allows you to know exactly where you stand relative to your retirement goals. Now you can build, manage, and forecast your retirement savings in one convenient location. The tool pulls in your actual financial data from the accounts you’ve linked to Personal Capital and lets you add your personal information and expected life events. The tool can help assess the following information for you:
Your Retirement Readiness – Using your actual financial data from the accounts you’ve linked to the Personal Capital Dashboard, you’ll see how prepared you are for retirement based on your target retirement date.
Expected Income – The Retirement Planner automatically calculates your expected monthly income and projected Social Security benefits. You can easily add in other sources of income such as rental income, pensions, inheritances or other windfalls.
Upcoming Goals – Planning for college? Buying a new home? Getting married? Adopting a child? Input these events into the Retirement Planner, and the tool will evaluate if you can afford these large expenses and still stay on track for retirement.
The “Investment Checkup” tool is also worth mentioning. You must complete a basic risk profiling questionnaire, along with a few other basic questions about your investment goals. Upon completion, Personal Capital presents a graph showing their recommended portfolio and asset allocation.
The tool explains the risk and return characteristics associated with your portfolio. You can compare the recommended portfolio to your current investments to see the differences in asset allocation, performance, and overall risk. In addition, Personal Capital includes a fee analyzer that will list the fees that you currently pay on your investments. This feature is supposed to calculate hidden fees that are often overlooked, as well as management fees and expenses.
In addition, Personal Capital includes a fee analyzer that will list the fees that you currently pay on your investments. This feature is supposed to calculate hidden fees that are often overlooked, as well as management fees and expenses.
Personal Capital Fees
The services I’ve just described are completely free, but Personal Capital does offer an optional asset management service.
Personal Capital is a registered investment advisor providing the free services to attract more affluent site users – particularly those with investable assets of at least $100,000. If a user has $100,000 or more, Personal Capital offers professional financial advice and the ability to work with a financial advisor (typically well trained with credentials). Personal Capital makes money by taking a percentage of the assets under management, or AUM.
The annual fees for their investment services are as follows:
The security is very good overall, with numerous protections in place to protect your financial accounts.
Personal Capital requires you to register each electronic device that you use. They will send you an email or call your cell phone to register each device. After registering a device, there is another layer of security that is used when linking financial accounts to your Personal Capital account. You must sign in and verify the original online account in addition to your Personal Capital login. Data is encrypted with AES-256 with multi-layer key management, including rotating user-specific keys and salts.
There are also strict internal access controls. The account information you enter within Personal Capital isn’t stored in plain text, and no individual at Personal Capital has access to your credentials. Your bank and brokerage credentials are encrypted and stored at Yodlee (a financial technology veteran), not in Personal Capital’s database. All information is encrypted as read-only, which prevents anyone from accessing your full accounts and initiating any withdrawals or transfers from within Personal Capital’s service.
Personal Capital operates under SEC (Securities and Exchange Commission) jurisdiction and is audited for compliance with SEC cybersecurity regulations. Furthermore, Personal Capital’s website encryption is rated “A” by the independent Qualys SSL Labs (a stronger rating than most major banks or brokerages).
Comprehensive Service – Personal Capital allows you easily manage your entire financial life using one secure interface. You can calculate your net worth, set a budget, manage investment accounts, and plan for retirement.
Friendly Reminders – Personal Capital includes an automated email feature that summarizes weekly changes in your net worth. You can choose to receive other alerts and bill payments reminders as well.
Valuable Tools – At no additional cost, Personal Capital provides numerous tools to help you make better financial decisions. These tools can help reduce your taxable income, improve your asset allocation, lower your investment fees, and track your investment performance over time.
Technology – The interface is very intuitive and Personal Capital can be used on a computer, tablet, or smartphone. The Personal Capital app integrates seamlessly, making it easy to check your accounts on the go.
Ease of Use – Getting started and syncing accounts is incredibly easy with Personal Capital. In addition, the graphs and charts provide valuable financial information that is easy to read and understand.
Investment Management Fees – Their investment management service isn’t horribly priced, but it’s higher than other online competitors.
Bugs and Glitches – Early on, Personal Capital had some technical issues on the site that made the user experience a little bit irritating. However, over the last 2-3 years, they have improved the interface and usability. Since ironing out the early bugs, I have not witnessed technical issues when linking or managing my accounts. Some users still report issues when linking certain financial accounts, but this is becoming increasingly rare with each update.
Personal Capital Review Summary
I love the free services provided by Personal Capital. There is nothing else on the market that offers comparable value for the low price of $0.00.
I don’t pay for their investment advice, but I know many readers are happy with the service. The management fees are comparable to many financial advisors, so I’ll leave that decision up to you.