When I first started managing my own money, I did everything manually.
Every month, I'd log into each of my accounts and record the balance in my Net Worth Record. I'd go into my bank accounts, my investment accounts, my mutual fund account, my credit cards accounts…
It would take me a solid hour to get every account. It was so bad that I started consolidating and closing accounts just to shorten the process.
For a very brief moment, many years ago, I tried Quicken and subsequently Mint. They were all OK — but they didn't play nicely with my brokerage accounts. Eventually, I abandoned them and went back to manually logging in. (if you are looking to quit Quicken, keep reading, you'll see why I list it as one of the best alternatives to Quicken)
Fast forward to today and I spend just 15 minutes each month managing my money.
Just 15 minutes each month plus another five each week is enough to get everything right… and the cornerstone of that system is a tool called Personal Capital. It's free, it's well designed and what started as a test run in Fall 2015 has become my permanent solution (it's my favorite of the Mint alternatives).
I use Personal Capital as a way to quickly collect brokerage investing and banking data for my Net Worth Record, a spreadsheet I use to track our family's net worth. Personal Capital will pull the data from each account so I don't need to manually log in. It separates itself from other services because the investment management portion is not an afterthought and fully integrated into the system.
Many other tools started as a budgeting tool that added on an investment component. Personal Capital started as an investment tool that added in budgeting.
About Personal Capital
Personal Capital was founded in mid-2009 with the mission of “better financial lives through technology and people.” They serve 165 million registered users (I am one of them!) with over $312+ billion in tracked accounts – that's some serious cash.
They manage $6 billion in assets for clients with at least $25,000 to invest – which is itself an even more astounding feat (that's what pays for the service, fees on those managed investment assets).
The business has two components: a free personal finance aggregation tool and a paid advisory service. This review will look only at the aggregation tool side as I haven't used the paid advisory service.
Located in California, it was founded by Rob Foregger, Bill Harris, and Louis Gasparini. Bill Harris is the CEO of Personal Capital and was formerly CEO of Intuit, Paypal, and several other financial services and security companies.
They've been the beneficiary of quite a bit of capital investment. As of August 2017 (their last funding round), they've raised over $225.3 million in funding (per Crunchbase). Their latest round was a third Series E round of $40 million from IGM Financial (to join a May 2016 investment of $50 million and December 2016 of $25 million).
Here's CEO Bill Harris giving an overview of Personal Capital:
The Sign Up Process
Signing up was fast and they had every one of my accounts available for linking, including my Maryland 529 plans. Take that Quicken!
The Transactions menu item is where you'll find the budgeting tools that Personal Capital recently added. If you've used Mint or other budgeting tools, it'll look familiar.
You have a list of transactions categorized into Income and Spending, followed by Bills.
Here's a shot of the All Income Cash Flow chart:
Like any tool there are a few hiccups to adjust post-transaction, especially when you transfer between accounts, but it's a quick adjustment. Until you do that, you sometimes get wildly crazy numbers. 🙂
As I mentioned earlier, Personal Capital started on the investment side and only recently added the budgeting toolset… so the portfolio tools are better. There's no debating that.
Here's what I see under Portfolio -> Holdings:
This snapshot was taken in the afternoon on January 12th, 2016 (other screenshots are more recent, this one hadn't changed so I left the original) and the market had been crushed the last 30 days the first few days of 2016). Looks like I've been a little more fortunate, having lost only 3.21% vs. the -4.77% of the S&P500 and -5.4% of the Dow. The Balances and Performance tabs are less interesting than the Allocation tab:
Personal Capital is collecting data from all of my brokerage accounts, granted it's just at Vanguard and TradeKing, and giving me a full breakdown of my allocation. I can click on one of the boxes and it can give me an even granular breakdown:
If you click down one more level, it starts telling you the actual holding and the amounts you have.
The last fun chart we have is US Sectors:
Can't Find Your Institution?
If you are having trouble finding your financial institution, it's possible that Personal Capital has not added support for them yet. For the longest time, TradeKing wasn't supported. There are two potential solutions to this.
First, you can check if perhaps your institution is actually named something else. The best example is a Fidelity 401(k) – it turns out that it's run through NetBenefits. If you have a Fidelity 401(k) then you won't actually find “Fidelity 401k” in the account listings – it actually says Fidelity (All accounts except 401k). For an actual Fidelity 401k you will need the NetBenefits one.
If you work at Textron and want to find your 401k for them, it's Fidelity NetBenefits Textron. Confusing but at least it's there!
Next, you can manually add publicly traded securities into a portfolio that Personal Capital will track on your behalf. So previously with TradeKing, I just put in all my holdings. 100 shares of Company Y, 150 shares of Company Z, etc. It's cumbersome the first time but then it tracks as normal.
Tracking Other Non-Investment Assets
You can track “other assets” like art, cars, etc – there just isn't any updating functionality because there's on central database of pricing for those types of things.
One exception is real estate, which you can track to Zillow's Zestimate:
I'm not sure how I feel about Zillow's Zestimates as an accurate measure (here are some other free home appraisal tools) but I include my home price because I need something to offset my mortgage. The Zillow information for our house is wrong (it thinks it's a — beds, 1.5 bath house — it has more than 0 bedrooms and 1.5 baths) but I don't care enough to go through the process of updating it.
The other key thing is I don't want my perspective on our net worth affected by this unknown. I just assume it has held the value we assigned at purchase, it now offsets the mortgage, and I'm happy with that. They have a feature where you can tie in a Zillow estimate (Zestimate), but we don't do that.
If you invest in real estate, for rental or otherwise, I can see the Zestimate being a little more valuable because you'll be interested in marking it's value to the market (even if it's a somewhat fictitious one).
Their Advisory Tools
The Advisory tools section offers the following:
- Investment Checkup: Given what you've shared in your enrollment, they would recommend an allocation. I'll expand on this below.
- Retirement Planner: This looks at whether or not your current pace of savings will be enough to support your retirement. It's a really fun tool I'll have to play with some more. (can you tell I'm a forecasting/stats nerd yet?))
- 401k Fee Analyzer: This takes a look at all the expense ratios in your various accounts and tell you if you're paying too much. The vast majority of our holdings are in Vanguard funds so there's not much to see here.
- Advisor: This is a page where you can schedule a call with a fee only financial advisor. The fee is an annual fee and based on assets under management.
- Invest Now: This is where you'd go if you wanted to enroll in their service.
- Research & Insights: The name for their blog.
So more on the Investment Checkup tab, this will take your investment profile and recommend a target allocation. Here's mine:
Here's where rebalancing comes into play. If things are out of whack, it's important to rebalance each year. This is a good reminder.
They also offer an Advisory Service:
The tiers of financial plans:
- Investment Service (up to $200K in investable assets) – Access to free online tools and dashboard plus Financial Advisory Team, Tax Efficient ETF Portfolio, Dynamic Tactical Weighting, 401k Advice, Cash Flow & Spending Insights, 24/7 call access including weekends and after-hours
- Wealth Management ($200K – $1M in investable assets) – Everything in Investment Service plus Two Dedicated Financial Advisors, Customizable Individual Stocks & ETFs, Full Financial & Retirement Plan, College Savings & 529 Planning, Tax Loss Harvesting & Tax Location, Financial Decisions Support (Insurance, Home Financing, Stock Options and Compensation)
- Private Client (over $1M in investable assets) – Everything in Wealth Management plus Priority Access to CFP®, Advisors, Investment Committee & Support, Investment Portfolio Mix of ETFs, Individual Stocks & Individual Bonds (in certain situations), Family Tiered Billing, Private Banking Services, Estate, Tax & Legacy Portfolio Construction; Donor Advised Funds, Private Equity & Hedge Fund Review; Deferred Compensation Strategy, Estate Attorney & CPA Collaboration.
Once you hit $100,000 in investable assets, an advisor will start calling you. If you pick up and tell them you're not interested, they will stop. If you don't answer, they will keep trying for a while and leave polite messages.
Personal Capital has managed to hire advisors from other firms with significant pedigree. My “assigned” Advisor is someone who was formerly at Wells Fargo Advisors – Private Client Group. He served as a Board Member of a non profit, graduated from a prestigious university, and his entire profile is available under Advice -> Advisors.
You don't have to work with their advisors (I don't) but one of these days I plan on chatting with an advisor to see what their pitch is. If/when I do, I'll be sure to update this review.
I want to dive into the Retirement Planner a little bit because it offers a benefit that few other personal finance tools do well – it's a replacement for Quicken's Lifetime Planner tool. Many people use Quicken's Lifetime Planner to help forecast retirement and beyond, so it's nice to see some of those features replicated in Personal Capital.
With the Retirement Planner, you set your income events – how much you're saving today, plus how much you will receive in retirement from various sources like a pension, Social Security, spouse's Social Security (if applicable), etc. Then you set your Spending Goals, which can be recurring like “retirement spending” or can be one time events, like paying for education. Finally, you can edit their assumptions – withdrawal tax rate, inflation rate, plus your life expectancy.
Then Personal Capital will tell you whether you're on track to save for this, including a detailed cash flow table that will explain how it should all play out. It's a good way to look at the whole picture forecasted out.
Click on “How can I improve this?” and you'll be given a series of suggestions including adjusting your asset allocation, investing more money, selling losers to offset winners, etc.
Personal Capital Fees
Personal Capital is free. The website is free, the mobile app is free, and the tools are all included.
It follows the “freemium” model where the tools are completely free but you can pay if you want tailored investment advice. You only pay a fee if you use their advisors and wealth management services.
The annual fee is based on the assets they are managing:
|Assets Managed||Annual Fee|
|$1 Million or Less||0.89%|
|$1 – $3 Million||0.79%|
|$3 – $5 Million||0.69%|
|$5 – 10 Million||0.59%|
Personal Capital vs. Mint: Is Personal Capital better than Mint?
Personal Capital gets compared with Mint.com a lot.
Mint is a very popular budgeting and money management tool that is owned by Intuit, the creators of Quicken and TurboTax (Quicken is now owned by a private equity firm). In its day, as far as personal finance management went, Mint was the gold standard for aggregation. It's easy to use, incorporates all of your accounts, and can give you a big picture of your finances pretty quickly.
The budgeting tools are great for someone looking to track their expenses and get a better handle on where their money is going. I used it for years and watched it mature from a cool free tool that pulled your data to what it is today.
The big difference is that Mint is coming at the question of management from the income and expenses side. It's primarily a budgeting tool with a robust suite of tools to help you get on top of your spending and servicing of debt. It's less sophisticated in the investing department so its tools are limited in that regard.
So, is Personal Capital better than Mint? Personal Capital is better than Mint if you are focused more on investing than budgeting. If you're looking for a budgeting tool, Mint is better. (and if you're looking to change your budget, You Need a Budget is even better but it has a $6.99 per month fee)
Mint was built to be a budgeting tool, so it's investing tools aren't even close. Personal Capital was built as a tool to facilitate long term planning and investing, with budgeting tools added later. The big knock against Mint is that there's very limited customer service… but it's free (heavily ad supported) so you can't expect 24/7 phone support. That's unreasonable.
If you're at the point where you're looking at your investments and need a portfolio management tool (AND a decent budgeting app), Personal Capital would be a better fit. It's also free so there's no harm in giving it a try.
Is Personal Capital Safe?
As you'd expect, security is extremely important and should be with any software that even has a peek into your money. Personal Capital uses AES-256 bank-level encryption and has two-factor authentication.
Personal Capital will require you to register each device you use and will periodically request you to re-register them in a bid to keep you as secure as possible.
Internal controls are another strong suit – no employee has access to your information and it's your account information is encrypted and stored at Yodlee. Yodlee has powered a lot of other company's data for this purpose (they were the ones that supported Mint's data for a long time) and they have strong encryption as well.
No system is 100% safe but this one is pretty close. We take a much deeper dive into safety and data security at Personal Capital and feel confident in their systems and processes.
What Needs Work?
In the first edition of this review, I had issues connecting with TradeKing because TradeKing had a different authentication system. My original solution was to put all of my holdings in a portfolio and Personal Capital tracked them separately. Ally Bank acquired TradeKing, turning it into Ally Invest, and now everything tracks automatically without my workaround.
The budgeting tools need more work but it's relatively new so I expect growing pains. It'll improve but it still gives me the knowledge I need, monthly income and expense values, even if the categorization needs more hands-on help.
Right now, Personal Capital is my tool of choice when it comes to managing money and investments. At this stage in my life, investments are becoming a more significant part of our finances and so having visibility into that area is crucial.
Have you been using Personal Capital? If so, I'd love to hear your experiences with it.