Investing is an important component of a successful financial strategy, whether you’re aiming for retirement or just want to increase your wealth. Beginner investors are often timid with their money since they don’t know a lot about the market. In 2019, 35% of investors in the U.S. claimed they wish they’d invested more.
Investing can be intimidating but with the help of a simple investment platform, users may feel more comfortable developing a solid investment strategy and managing their money properly. Personal Capital is an investment platform that solves this problem for many beginner or experienced investors. Weighing the pros and cons of the platform and reviewing its features will help you determine if it’s the right investment platform for you.
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Personal Capital Services and Features
Personal Capital offers many wealth management tools and features for investors who want to build wealth and focus on retirement. The company focuses on helping investors build their investment portfolio with services that include:
- Portfolio rebalancing and allocation: When the market moves, investors tend to make emotional investments that can negatively impact their portfolio. Personal Capital helps by rebalancing and reallocating investments automatically when the market changes.
- Tax liability optimization: Personal Capital uses tax-loss harvesting strategies and different account types to minimize your tax liability on capital gains.
- Financial advisor advice: As a Personal Capital investor, you have a financial advisor to help you make investment decisions and develop successful strategies.
- Retirement planning: In addition to discussing retirement goals with your financial advisor, you can also use the automated online retirement planning tool to figure out if you’re on track with your goals. Provide your retirement date and current investments and the system shows how much fixed income you would receive so you know if you need to adhere to a more aggressive saving strategy.
- Net worth calculation: Your net worth is the money you have minus the money you owe. Personal Capital includes an online tool to help you accurately calculate and keep track of your net worth.
Personal Capital offers three different wealth management tiers based on the amount you want to invest and the level of assistance you want from a financial advisor. The three tiers are as follows:
- Investment services: With $100,000 to $200,000 in investments, you have access to financial and retirement advice from a team of advisors, as well as a professionally managed exchange-traded fund (ETF) portfolio.
- Wealth management: When you invest over $200,000 to $1 million with Personal Capital, you have two dedicated financial advisors who regularly review your customized portfolio. Dedicated real estate, investment bond, and stock specialists help you make trade decisions and consult with you to develop a solid investment strategy and minimize tax liability.
- Private client: With over $1 million in investments, you receive all the wealth management services and in-depth support for your retirement and financial goals. You also have private equity investment options and priority access to Personal Capital specialists.
All Personal Capital investors create an account with the company that allows them access to educational resources and investment trading options through the website and mobile app.
Who Is Personal Capital for?
Personal Capital has an account minimum of $100,000, so it’s best for wealthy investors. Since the company provides financial advisor assistance, portfolio rebalancing, and allocation, it’s a good platform for investors who don’t want to be too involved in their investment strategy.
Tax optimization is an important part of Personal Capital’s services, which is comforting to investors who are worried about high tax liability. It also offers free financial management tools and access to human financial advisors, making it a good investment platform for users who want to revamp their entire financial situation and make sure they’re on the right track toward retirement.
Pros and Cons of Personal Capital
As with all investment platforms, users have experienced both benefits and drawbacks to investing with Personal Capital.
Pros
Online Management Tools
Through the Personal Capital mobile app or website, you can analyze your retirement savings plan fees, check on your investments, and link outside accounts to see your entire financial picture. Your account dashboard provides a quick glance at your investment performance and shows changes to your net worth or portfolio.
Financial Advisor Advice
In addition to online research tools, Personal Capital provides financial advisors to assist with your investment strategies. Depending on your tier of service, you may have complete access to these advisors to ask tax, investment, or retirement planning questions.
Different Wealth Management Plans
Your investment amount determines the wealth management plan you qualify for. This allows you to choose how hands-on you want the Personal Capital financial advisors to be with your portfolio. While there are many free tools on the site, expert advice and in-depth support are only provided for plans in higher tiers.
Cons
High Minimum and Fees
To invest with Personal Capital, you must provide at least $100,000, which is a higher minimum than many other competing investment platforms. The first $1 million you invest is susceptible to a 0.89% annual management fee.
Automated Asset Allocation Models
The Personal Capital online system automatically implements an asset allocation model on every investor’s account. This model is based on research and data but isn’t customizable for investors.
No Account Reconciliation
You can link your external accounts to your Personal Capital investments for free to see a comprehensive dashboard of your finances. However, the digital tool doesn’t allow you to reconcile these external accounts to ensure all transactions have synced properly.
Is Personal Capital Right for You?
If you have substantial wealth to invest and prefer an automated investment platform that provides assistance from financial advisors, Personal Capital may be right for you. The amount of assistance you receive from financial advisors depends on the size of your investment but you also have access to many free financial planning tools through your account.
The platform focuses on lowering your tax liability and automatically rebalancing your portfolio to increase growth. However, before deciding if Personal Capital is right for you, it’s important to review the fees associated with your account and the tools available to you.
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