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Impression of Personal Capital’s wealth management app after 9 months

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Personal Capital is a free online wealth management app and it is one of the most useful tools for investors on the internet. I first signed up with them about 9 months ago to see if they can help me manage our various financial accounts. I thought it would be a good time to give an updated impression and introduce new readers to this great tool.

Personal Capital’s goal is to bring wealth management to individual investors like you and me. I have over 20 accounts with various financial institutions and I was able to link most of them so I can get a top down view of my finances at a glance. They also have many investment tools that help you manage and grow your wealth. That’s what really differentiates them from competitors like Mint, another online company that also allows you to review all your financial accounts in one place.

After 9 months

When I first signed up with Personal Capital, there were a few hiccups, but they have improved quite a bit over the last 9 months. Let’s go over what I like and how they improved.

Linking Accounts

When I first signed up with Personal Capital, I couldn’t link some accounts. They improved quite a bit in this area and I can now link almost all of our accounts. It’s great to be able to look them over quickly to make sure everything is still running smoothly. I’m quite impressed that they were able to link to so many accounts. Here is a list of my accounts:

  • 8 banking accounts. Checking, savings, personal and business. I probably should consolidate these at some point.
  • 12 investment accounts. IRAs, 401(k), 529, Prosper.com (peer to peer lending), and other brokerage accounts. This is where Personal Capital is especially useful – don’t miss the asset allocation section below.
  • 2 credit cards.
  • Exception –Treasury Direct. They couldn’t link to Treasury Direct so I couldn’t see my I bonds. Direct Treasury takes their security very seriously and they will email you a temporary passcode every time you try to log in.

Net Worth

I like having all our accounts in one place because that makes it easy to see our net worth. However, there is a little problem with real estate. I have to update the value of each property manually to get an accurate picture of our net worth. It would be nice if Personal Capital could hook up to Zillow and get the estimated value that way. I guess they are focusing on “investible assets” so they don’t really want to go into real estate too much. It’s not a big deal, but it sure would be nice to have.

Weekly Net Worth Update

In the default setting, Personal Capital will send you a net worth update in an email once a week. I really like this because I can quickly see the changes in our net worth and it’s a reminder to check my investment accounts. You can configure it to send out an email daily, weekly, or not at all.

Personal Capital update weekly email

Tools for Investors

Portfolio

Keeping track of your portfolio with Personal Capital is much more than just seeing the balance. This is where Personal Capital is much more impressive than Mint. You can see how your investment is doing against the market index, check your asset allocation, and much more. They have added quite a few things since I joined so let’s take a quick overview.

RB40 Index VS the World

I can see how our portfolio is doing VS the S&P 500, NASDAQ, DOW, and 10 year bonds. Investing is a bit of an isolationist activity and it’s nice to see how we’re doing against the market. You can select which accounts you would like to compare against the indexes and also change the time frame to 30 days, 90 days, 6 months, or the current year. This is a pretty nice tool that lets me see how our investments are doing VS the world.

Personal Capital wealth management tools you index vs SP500

There is a limitation here, though. They don’t really keep the history of your account. The tool just takes a snap shot of your portfolio and constructs a historical graph with the current holdings. If you have been active in your accounts, this graph won’t be accurate.

For example, this graph above is Mrs. RB40’s IRA VS the SP500. She hasn’t made any trades this year so this graph is accurate. I, on the other hand, have been very active in my IRA and I made quite a few trades this year. I sold my Apple holdings earlier this year but the profit I made isn’t reflected in this graph since the stock isn’t in my account anymore.

It would be much nicer if this graph could track our real portfolio instead. Hopefully, they’ll be able to improve it at some point. Right now, it’s just not an accurate depiction of performance if you have been trading recently.

Asset Allocation tool

This is another great graphical tool that can show your asset allocation in its entirety at a glance. At the high level, you’ll see Cash, U.S. Bonds, International Bonds, U.S. Stocks, International Stocks, Alternatives, and Unclassified. You can click down to each asset class and see what holdings you have. I’m very impressed with this tool and it’s really cool to see it in action. Check out some pictures here, but I think you really should try it out with your own account. Sign up with Personal Capital through this link.

Top view

Personal Capital Asset Allocation  wealth management tool

Click down into U.S. Stocks

Personal Capital Asset Allocation

Click down into Mid Cap Core

Personal Capital Asset Allocation

Personal Capital Asset Allocation

This is why I love Personal Capital. A stock like LEG is classified as Mid Cap Core and it’s easy to place it in your asset allocation chart. On the other hand, mutual Funds and ETFs are made up of many companies and it’s hard to keep track of our asset allocation manually. VB for example is Vanguard’s Small Cap ETF, but the investment is actually spread out into Mid and Small Cap. Here is VB’s allocation according to Morningstar Xray.

Personal Capital made it a lot easier to check our asset allocation and rebalance. Previously, I kept track of our asset allocation in a spreadsheet and it was very painful to rebalance the portfolio. This alone is worth the price of admission (free!) so you really should sign up if you don’t have an account yet.

Investment checkup

In the Investment checkup section, we can get a checkup on our asset allocation, risks, and costs.

Personal Capital Asset Allocation investment checkup

Allocation

You can configure your age, retirement target, and risk tolerance in this section. Personal Capital will crank out a Target allocation plan for you and keep track of how it compares to your investment. This is somewhat useful if your target allocation aligns with Personal Capital’s recommendation. It’s good for a gross check up and you’ll have to fine tune your asset allocation yourself.

Currently our allocation is way out of whack because I got scared and pulled back quite a bit on stock investing.

Risks

According to Personal Capital, I have two big risks right now.

  1. Lack of exposure to small caps.
  2. High mutual fund allocation. I guess I have too much investment in mutual funds. Personal Capital said mutual funds are expensive and investors could do better.

This is temporary and once I rebalance later this year, these warnings should go away.

Costs

Personal Capital will go over all your mutual funds/ETF and determine how much you’re paying per year. It’s good to see the total of how much I’m paying per year because it can take a while to figure out manually. Most of my funds have low expense ratios, but nothing brings the point home like seeing the $$$ on the screen. The figure 0.8% doesn’t quite make the same impact as $864 per year. This is much better than the $1,754 I was paying in fee before I started using Personal Capital though.

Free financial consultation

Another thing that I really like about Personal Capital is their free financial consultation upon initial sign up. If your net worth is over $100,000, then their financial advisor will contact you to help review your portfolio. I thought it was quite useful when they went through it with me. They probably are just using a software program to analyze this because I heard from a reader that his recommended asset allocation was quite similar to mine.

Not covered in this article

Cash flow – Personal Capital also keeps track of your income and expense. I don’t use it though because I’m doing this manually on a spreadsheet. Yes, it takes more time, but it also makes it more real. Too much automation can make spending money too abstract for me.

Thanks for the free tools

All in all, I am very happy with Personal Capital. It’s free! What’s not to like? I’m not using them to actually manage my portfolio, though. I’m too cheap to pay 1% off the top and I still enjoy managing our portfolio on my own for now. Their investment management tools are quite useful and are making life easier for me.

Have you used Personal Capital? How do you like it? Is there a better site out there for investors?

Sign up with Personal Capital through this link.

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Disclosure: If you sign up with Personal Capital, I may receive a referral fee depending on the size of your portfolio.

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{ 30 comments… add one }
  • The Stoic June 10, 2013, 5:07 am

    Thanks for the review on Personal Capital. I’m always looking for new ways of tracking my finances. I don’t have near the number of accounts as you do so tracking those is not as challenging. Sounds like Personal Capital has several investment tools that would be very useful. I’ve used Microsoft Money and Mint in the past. Now a days I use a few spreadsheets that I have designed and seem to give me the info. I’m looking for. I think I will take a closer look at Personal Capital. Thanks again!

    The Stoic

    • retirebyforty June 10, 2013, 10:08 pm

      No problem! I really like them and don’t mind recommending them at all. Mint was good for budgeting, but Personal Capital is much better for managing your investments.

  • SMB June 10, 2013, 6:16 am

    You pointed out the two reasons I don’t like to use Personal Capital: Real Estate and bonds. Right now I’m happier with Mint since it does link to Zillow. One thing I wish both would do is link to Treasury Direct or at least allow you to manually enter bonds. I have a LOT of paper bonds that my parents bought me as I was growing up. I’d love to have an easy way to track them instead of manually entering everything into my own spreadsheet. Personal Capital said I could manually enter them into the website as a lump sum so that they’d be included in my snapshot (which Mint won’t do), but that’s not really useful for me.

    • retirebyforty June 10, 2013, 10:10 pm

      I don’t really mind real estate too much because Zillow is so inaccurate anyway.
      It would be nice to link to Treasury Direct though. I think the government made it super secure so it’s harder to link.
      I don’t know what you can do about paper bonds… 🙂

  • David @my2centopinion June 10, 2013, 6:48 am

    I hadn’t heard of personal capital, so thanks for the review. I do most of my tracking with mint, but this does seem to have some advantages for people that are more active in their investment.

    • retirebyforty June 10, 2013, 10:11 pm

      I used Mint previously too, but Personal Capital is so much better for investors. It’s no contest.

  • Pretired Nick June 10, 2013, 9:56 am

    Thanks for the good overview. I’ve been thinking about giving Mint a go, but I might try this first based on your thoughts. Kind of troubling about no Zillow connection, though, since much of my assets are in real estate.

    • retirebyforty June 10, 2013, 10:13 pm

      Zillow is so inaccurate anyway. 🙂 Mint is good for budgeting, but if you have stocks and other investments, I would go with Personal Capital instead.

  • krantcents June 10, 2013, 1:16 pm

    Nice review! I know there are a lot of convenient apps for tracking your finances, but I never felt the need for it. I track my portfolio and still check my bank account as needed. 8 bank accounts and 12 investment accounts are way too many! I have one checking and one savings account. In addition, my wife and I have just 5 investment accounts. Do you really need that many accounts?

    • retirebyforty June 10, 2013, 10:13 pm

      I really need to consolidate.

  • BocaEli June 10, 2013, 5:28 pm

    What is the policy on privacy and data that is collected. Do they have the right to sell you data, or use it for their financial benefit? What is their business model? How do they make money?

  • Prasun Choudhury June 10, 2013, 6:00 pm

    On a slightly unrelated question, what do you think of the current price of AAPL stocks (since you sold it this year); over priced, under priced? Assuming you got it much cheaper 2 – 3 years back, you must have still made reasonable gain with AAPL stocks.

    • retirebyforty June 10, 2013, 10:15 pm

      I actually just purchased when it dipped below 400 and stopped out at 430 or so.

  • bill June 10, 2013, 7:06 pm

    Different than Mint?

    • retirebyforty June 10, 2013, 10:16 pm

      It’s a lot nicer for investors. I used Mint previously, but now I prefer Personal Capital. Mint is good for budgeting, but I don’t really need help with that.

      • Anton Ivanov June 11, 2013, 10:54 am

        I use Mint for my personal finances now, because Personal Capital couldn’t connect to my brokerage (TradeKing). I heard that it’s not as good as Mint as far as tracking your spending and personal finance goals, but they may have gotten better…

        • retirebyforty June 11, 2013, 10:28 pm

          Hopefully they’ll resolve the issue with TradeKing soon. Just keep checking back every month or so.

  • Sounds great. It’s always good to see that an app is committed to improving through beta testing and real user testing. Thanks for your feedback!

  • busymofo June 11, 2013, 11:32 pm

    I signed up after reading about personal capitals in your earlier post. It’s very similar to Mint.com which I really like very well however I do not invest heavily but will continue to do so. I haven’t touched the app in over 5 months but with your detailed review it showed me things I hadn’t known about before. It’s a real eye opener thanks. Been reading your blog for awhile keep at it!

    • retirebyforty June 12, 2013, 11:11 pm

      You’re welcome. Hope you get a bit more use out of it. Thanks for following us.

  • kwendy July 21, 2013, 4:06 pm

    What are the credentials of their financial advisors ? Appreciate your info

    • retirebyforty July 22, 2013, 8:47 am

      I think they have quite a few financial advisors so you’d need to ask that one they assign you. Michelle was really nice and responsive so I’m sure they would answer your question personally.

    • awakeinwa January 2, 2014, 4:48 am

      I asked if they were willing to sign on as one of my financial fiduciaries, which is a high legal bar. The advisor said yes though we never got around to the paperwork to officiate the matter. I left Personal Capital after a month’s trial. I have an aggressive investing style, and it didn’t seem designed for someone like me.

  • Joel Zaslofsky September 12, 2013, 7:16 am

    I’m not easily impressed, especially with fancy graphics and bells or whistles, but Personal Capital got my attention as well. Although I think Personal Capital’s goal is to make money off of people with $100,000 in existing assets, the side benefit is their free tools are awesome for someone with $1.

    Kudos on pointing out the value in their high-value weekly email update. It’s like getting a financial dashboard without having to log into their website or app (although it lacks the drill-down nature of the website, which is pretty groovy).

    I believe that Personal Capital still has some serious work to do on their 401k fee analyzer and investment checkup tools though. The information they present with these isn’t actionable right now. Overall, nice write-up! If you’re looking for a great supplement to what you have here, check out my review for other angles and more depth on certain facets: http://valueofsimple.com/personal-capital-review/

    • retirebyforty September 12, 2013, 4:54 pm

      They are making improvements to their tools and hopefully they can address your concerns soon.
      Thanks for you comment.

  • Steve November 14, 2013, 4:24 pm

    “If you have been active in your accounts, this graph won’t be accurate.”
    It seems this would apply to anyone with a 401(k) getting regular contributions, or who contributes to their account, ever. I don’t quite see why they bother showing a “historical net worth” chart when it’s not based in reality to a meaningful degree.

  • awakeinwa January 2, 2014, 4:43 am

    Personal Capital has one of their financial advisors call you after a week you sign up particularly if you’re over a certain net worth it seems. I was subject to one of those calls. We had a friendly conversation. But since I was an aggressive investor, our investing philosophies sort of diverged.

    The advisor sold ETFs very hard. We chat about volatility, how the market reverts to mean, and the compounded value of low cost passive funds vs. active ones. They also provided a very nice report detailing my asset allocation and what they would recommend albeit without specific funds attached, just asset categories.

    I ended up not using Personal Capital because my aggressive investing style did not lend itself well to the tool nor their financial advisory service. It really is for folks who don’t have much time and/or experience or comfort level with personal investing.

    As of December 31st, my portfolio yielded 49.81%. I have a focused basket of stocks. Just 3-5 stocks form the bulk of my investments. I’ve another 3-5 smaller more forward looking investments. I am now bridging to a high dividend yield current income strategy taking a chunk of my total money, investing it in a near 10% dividend yield stock with an interesting profile. It consists of 20% as tax-free return of capital and 80% qualified dividends which lowers taxes a bit while yielding me north of $2,000 of income monthly.

    So for a tactical view of my cash flow, asset allocation, and the like, I have the Mint app loaded on my Mac. A quick keyboard shortcut pops-down a screen showing me the state of my money. For more advanced modeling, I spin up spreadsheets and do the tracking and calculations that way.

    I would recommend Personal Capital for those that want to ride the market and get some helpful investment advice that gives them peace of mind. But it’s fair to say their tools are not terribly accurate and may provide a false sense of where your portfolio stands. I daresay nothing beats a spreadsheet sometimes, and once in a while digging into the numbers to see how your money is making money for you and doing a little comparison shopping with Google Finance.

    • retirebyforty January 3, 2014, 8:58 am

      Thanks for your input. Personal capital is also a little too conservative for me. I like investing in individual stocks as well so I don’t use their investment service. I think their asset allocation tool is very useful because it gives you a quick overview of all your investment.
      I wouldn’t be comfortable with 3-5 stocks as the bulk of my investment. It only take one wrong move and your portfolio can be in a world of hurt. Good luck in 2014.

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