Robo-Advisor Personal Capital: What Funds Does It Invest In?

Personal Capital is a robo-advisor that offers a hybrid human-digital service, setting it apart from competitors like Wealthfront and Betterment, which are strictly robo-advisors. Personal Capital's robo-investing services are only available to those with a minimum of $100,000 to invest. The company uses Smart Weighting to minimise risk and maximise returns by investing across asset classes based on sector, style, and size. Personal Capital also offers tax-loss harvesting and socially responsible investing (SRI) opportunities.

Personal Capital's free financial tools

Personal Capital is a leading robo-advisor with free financial tools for everyone to use. The company has been around since 2009 and was acquired in 2020 by Empower Retirement, America's second-largest retirement services provider. Personal Capital offers cutting-edge financial tracking, a cash management account, and investing services, all on one convenient platform.

Personal Capital caters to individuals who want an easy, no-cost way to track their personal finances and well-heeled technophiles who seek the robo-advisor experience combined with personalized advice from a human financial advisor. The company also offers unique features to investors with a lot of capital, such as tax optimization strategies and socially responsible investing (SRI) options.

Personal Capital's free financial tracking and planning tools allow users to track all of their accounts in one place, including checking and savings accounts, certificates of deposit (CDs), retirement accounts, mortgages, and taxable investment accounts. The platform also offers powerful tools to help users optimize their money and investing strategies to build wealth simply and efficiently for the future.

• Retirement Planner: Monitors your retirement savings progress and lets you know if you're saving enough to reach your financial goals.
• Investment Checkup: Keeps tabs on your portfolio performance and suggests opportunities for improvement as needed.
• Fee Analyzer: Checks your investment fees on linked accounts and lets you know if you're paying too much. It also assesses the impact of fees on your retirement savings.
• Net Worth Tracker: Lets you see your net worth across all linked accounts in real time on your Personal Capital dashboard.
• Cash Flow Monitoring: Keeps tabs on cash coming in and out of all your linked accounts.
• Cash Account: This high-yield savings account offers a 0.05% annual percentage yield (APY), no balance requirements, and no monthly fees. Funds are FDIC-insured up to $1.5 million.

Personal Capital's Wealth Management services

Personal Capital is a versatile robo-advisor that offers cutting-edge financial tracking, a cash management account, and investing services, all on one convenient platform. The company has been around since 2009 and was acquired in 2020 by Empower Retirement, America's second-largest retirement services provider. Personal Capital offers a one-two combo of free personal money management tools and fee-based investment management services.

Personal Capital offers three tiers of Wealth Management Services, depending on the assets you hold with them:

Investment Service

• Clients with assets of $100,000 to $200,000 get access to the company's investing tools and support from Personal Capital's financial advisors when needed.
• Assets are invested in a portfolio of tax-efficient exchange-traded funds (ETFs) with a weighted average expense ratio of 0.08%, and that portfolio is professionally managed by the company's robo-advisor.

Wealth Management

Clients with assets of $200,000 to $1 million enjoy all of the benefits above, plus access to two dedicated financial advisors and the flexibility to customize a portfolio with individual stocks and ETFs.

Private Client

Clients with $1 million or more in assets get all of the services above, plus more in-depth financial planning and advice, access to alternative investments like private equity and hedge funds, exclusive private banking services, and the ability to invest in individual bonds, in addition to stocks and ETFs.

Personal Capital uses “Smart Weighting” to minimize risks and maximize returns by investing across asset classes based on sector, style, and size, rather than simply mirroring an index like the S&P 500. The company also uses dynamic portfolio management to adjust your asset allocation to accommodate shifts in your financial situation.

Personal Capital offers a copious array of financial planning and investment analysis tools, including a spending tracker, retirement planner, investment checkup, fee analyzer, net worth tracker, and cash flow monitoring. The company's cash management account, Personal Capital Cash, offers a 0.05% annual percentage yield (APY), no balance requirements, and no monthly fees. Funds are FDIC-insured up to $1.5 million.

Personal Capital's financial tracking and planning tools are free. Customers with account balances of at least $100,000 may opt in to Personal Capital’s Wealth Management services. All clients get access to financial advisors; the level of service depends on investable assets. Management fees range from 0.89% to 0.49%, depending on account balance.

Personal Capital's high account minimum

However, it is important to note that Personal Capital offers a hybrid robo-advisory service, providing access to a team of financial advisors, which non-hybrid robo advisors do not. For those with accounts below $200,000, Personal Capital's fees may seem high compared to competitors, ranging from 0.89% on the first million to 0.49% for accounts over $10 million.

Nevertheless, Personal Capital's fees are still lower than those of traditional financial advisors, who typically charge 1% or more for asset management. The company's all-inclusive fees, socially responsible investing strategies, tax-loss harvesting features, and customizable portfolios are also compelling perks.

In summary, while Personal Capital's high account minimum may be a deterrent for some, its hybrid robo-advisory model, lower fees compared to traditional advisors, and additional features make it a solid option for those seeking a more personalized investment experience.

Personal Capital's fees

• Wealth management clients with up to $1 million in balances: 0.89% fee
• Private clients with up to $3 million: 0.79% fee
• Up to $5 million: 0.69%
• Up to $10 million: 0.59%
• More than $10 million: 0.49%

The average expense ratio charged for ETFs comprising your investment portfolios is 0.08%.

Personal Capital's unique features

Personal Capital is a robo-advisor with a human side. It offers a unique hybrid robo-advisory service, geared towards high-net-worth investors, that combines automated investment portfolio management with access to a team of financial advisors.

Personal Capital's robo-advisory service has the following unique features:

• Smart Weighting: Personal Capital uses "Smart Weighting" to minimize risks and maximize returns by investing across asset classes based on sector, style, and size, rather than simply mirroring an index like the S&P 500. This approach helps to diversify your portfolio and protect it from potential market volatility.
• Dynamic Portfolio Management: Personal Capital adjusts your asset allocation to accommodate shifts in your financial situation.
• Tax Optimization Strategies: Personal Capital takes advantage of tax optimization strategies, such as tax-loss harvesting, to minimize taxes. As Personal Capital invests your money in individual securities, it can easily target losers and sell them to offset gains.
• Automatic Portfolio Rebalancing: Personal Capital's automatic portfolio rebalancing feature periodically realigns your investment allocations to ensure your portfolio stays on track with your goals.
• Socially Responsible Investing (SRI): Personal Capital offers SRI opportunities, allowing you to personalize your strategy based on environmental, social, and governance (ESG) criteria.

In addition to its robo-advisory service, Personal Capital also offers a range of free financial tracking and planning tools, such as a retirement planner, investment checkup, fee analyzer, net worth tracker, and cash flow monitoring.

Frequently asked questions