For people new to investing, finding the right companies that align with your values can be tricky. We here at The Impact Investor believe in investing in the future. We want to help build a better world for future generations.
To do that, we want to invest in Environmental, Social, and Governance (ESG) companies that have the power to change the world and potentially even help save our environment. Personal Capital can help you manage your funds with tools that help you focus your investments on ESG companies. This tool is considered one of the best Robo-advisors on the market today.
What is Personal Capital?
Personal Capital is an online money management platform that offers free and paid-for services for those who want personal advisors to manage their money. Personal Capital’s free tools include some of the best products to help manage your money.
They focus on investment and retirement strategies rather than offering tools for financial tracking. These free tools are open for anyone to use.
Personal Capital isn’t new to the game; they’ve been providing financial services for people since 2009. For those wondering, “Is Personal Capital legit?” the answer is a resounding yes. Thanks to their reputation, they’ve grown so much they were acquired by Empower Retirement in 2020.
This merging between the two financial companies is good news for people that want a personal money management platform that focuses on investments and retirement rather than short-term goals. However, Personal Capital does provide users with limited transaction options, where they can access their money now.
You can sign up for a free personal capital cash account. This account lets you do everything, from accepting direct deposits from your employer to transferring money to and from your checking account, and even helps you track large purchases. This is an excellent account that can help you manage your cash, which is separate from your investment portfolio.
Personal Capital Product Offerings
Personal Capital’s free tools can help you better understand where your money is going, whether or not you’re saving enough for retirement, and help you understand how to make better investment decisions. Some of Personal Capital’s best product offerings are the budgeting and savings tools, which are easily viewed on your personal dashboard.
Budgeting is tricky enough as it is without needing to be frustrated about how to best use your money, figure out where it goes, and feel confident that you’re budgeting enough. Personal Capital’s dashboard helps you evaluate your budget and savings and provides valuable information about your investments and cash flow.
You can even link it to your accounts, including your bank account, mortgage account, and any debts you have, including credit cards and loans. Of course, it also links to your varied investment portfolio.
Your personal finance dashboard is easy to set up. All you have to do is create an account by inserting your email and password.
Once you do that, you’ll be asked to provide authentication, and after that’s done, you can link to your bank accounts or other investment accounts. Most users will link around six different accounts to start with.
Imagine being able to view all six of your accounts on a single platform. Your personal finance dashboard lets you do just that.
See Related: Personal Capital SRI Review: Is It Trustworthy?
How Does Personal Capital Work?
In addition to the free savings, budgeting, and cash flow tools available on Personal Capital, they also provide people with real-life dedicated financial advisors. Keep in mind that these advisors are only available to people with an investment portfolio of around $100,000 or more.
These dedicated financial advisors provide sound advice on which investments to make as well as to reduce your tax burden. People with investment accounts of over $200,000 are provided with an extra advisor, and those with even bigger accounts are provided with a team of advisors to help manage their wealth.
The combination of their Robo-advisory and the personal touch of a trained financial advisor makes Personal Capital a big deal for people with a lot of money as well as those who need extra help managing their funds. If you have an account of over $100,000, these financial advisors can help provide you with information on 401k status, different stock options, and insights into spending habits. Planning for college savings is also included in their services.
Is Personal Capital Trustworthy?
Personal Capital requires two-factor authentication when you log on. This ensures your money and information stay secure.
Personal Capital also allows you to enable a “Foreign login attempt’ feature from your settings. This keeps you informed if anyone is trying to log in to your account using your personal information.
Personal Capital also has over 3.3 million users and currently manages over 22.7 billion assets. Personal Capital provides security to all of those accounts. Their website’s encryption is rated A+ by the world-renowned Qualys SSL Labs, which means that they have a better rating than most banks and brokerages.
Personal Capital never sells your information. You can obtain a privacy report from the past 12 months with a simple online request. In addition, Personal Capital has its data encrypted with AES-256 multilayer key management.
They partner with some of the biggest names in online security, including Norton, Envestnet, and Verisign. It would be hard to find another platform as big as Personal Capital with as many tools that also works as diligently to protect your information.
See Related: Betterment vs Personal Capital: Which One Is Better?
Pros and Cons of Using Personal Capital
Pros
The biggest pro of using Personal Capital is that their tools are free, and you can easily create an account and set up your personal finance dashboard. It might take a little bit of work to link all of your accounts after passing through their authentication process, but it’s worth it to get all of your finances in a single, easy-to-read, and follow format.
Another pro is that Personal Capital offers socially responsible portfolios, where they have done the hard work for you and created a Socially Responsible Personal Strategy, known as SRI. By doing this, they help you know which companies are actively engaged in managing environmental, social, and corporate governance issues (ESG).
Their free financial tools selection is also a pro. There’s even a retirement savings calculator where you can adjust your savings goals to meet your life expectancy.
Their free tools also include looking over your investment strategies and telling you whether they are winners or losers. There are even options for reviewing spending on groceries, bills, mortgage payments, car loans, and other debts.
Another pro is the wide range of accounts that Personal Capital can manage. These include accounts like your Roth IRA, traditional IRA, rollover, SEP IRAs, and trusts. While they won’t be able to manage your 401k account or a 529 college savings account directly, they can also help advise you on how much to allocate to those accounts.
Cons
One of the biggest cons of Personal Capital is their $100,000 minimum to access their full scope of wealth management tools. Access to financial advisors and using Dynamic Smart Weighting tools to help you create a varied portfolio of investments make all the difference. Unfortunately, this high minimum makes access to these Personal Capital benefits inaccessible to most budding investors.
Another con is that even if you open an account with Personal Capital using their minimum, their planning fee is 0.89% of assets managed for those between $100,000 and $1,000,000 in their portfolio. That’s quite high compared to other similar online financial advisors.
Conclusion
The good news is that Personal Capital are experts in their field, helping you to invest in ETFs and individual stocks designed to help lower your tax burden. This is just one of many ways that Personal Capital takes a holistic approach to your wealth.
They understand that your wealth and money are much more than cash and assets. All these assets are going towards something, whether that’s saving up to buy a new home, trying to pay off debt, or saving enough to plan for retirement so you can enjoy time with your family.
If you want to take advantage of their personal wealth management tools and free financial tracking tools, there’s no better time than now to create your free account and start getting valuable insights into your spending habits.
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