Personal Capital Review: Software

A few months ago, Kyle and I signed up for Personal Capital after reading positive reviews from other bloggers. We linked up all our accounts and have been using the free software periodically. We also went through a series of meetings with a Personal Capital advisor to see if we wanted to use them as our investment advisors. In this post, I will share how I like using Personal Capital’s software, which they provide for free. (All the photos in this post are screenshots from our account.) In my next post, I will share our process of interviewing the advisor and our decision of whether or not to invest through Personal Capital (the for-fee aspect of their service).

 

 

Personal Capital Software

 

I actually talked with a Personal Capital representative when I went to FinCon14. I jumped in right away with “What do you do?” and his answer was to think of what Mint does, but with more capabilities in visualizing and analyzing investments. And that really is the quickest way to understand the free software that they offer!

 

Like Mint, you link up all your accounts to Personal Capital and it downloads and agglomerates all your data. You can track your spending and income and so forth and organize it (though not budget). However, there is a much better and more interesting visualization of our current investment holdings and how they have changed over time. If you are a Mint user, you know that Mint’s Investments section leaves a lot to be desired, and Personal Capital is trying to fill that gap. Kyle has actually been on a search for the last five years to find a service that easily gives him exactly the information he wants about our investments (so far to no avail, though he does use SigFig).

 

dashboard

 

Adding Accounts

 

I found it quite easy and quick to link up our accounts to Personal Capital. There was a slight glitch with their software in the process. Kyle and I have separate Vanguard accounts with separate IRAs (obviously), but we also jointly hold a Vanguard brokerage account for out taxable investments. Because this joint account shows up in each of our Vanguard accounts, Personal Capital duplicated these accounts when I added both logins. It was an easy fix, though – I just deleted one of the two copies of each account.

 

This error was so minor that I might not have mentioned it except that it propagated somewhat and led to part two of this review. Without the duplication, Kyle and I had less than $100,000 in our investments, but with the duplication we had above $100,000 listed as investable assets. Because Personal Capital thought we had over $100,000 invested, they pitched us their investment services. (I did correct the duplication before our meetings started, and we just agreed that we would consider increasing our investments to $100,000 if we were to use Personal Capital’s investment services.)

 

Investment Visualization

 

Since the big advantage to Personal Capital is supposed to be the investment analysis, that is where I will focus this review. In the Investing section, your analysis options are: Portfolio, Investment Checkup, Retirement Fee Analyzer, and How to Invest.

 

Under Portfolio, you can view your Holdings, Balances, Performance, Allocation, and US Sectors.

 

‘Holdings’ shows you how your investments (what they call the “You Index”) have performed over time against various benchmarks (the most relevant for us is the S&P 500). You can also visualize just one of your accounts at a time against the “You Index” and a benchmark. ‘Balances’ shows you how your own account balances have changed over time. ‘Performance’ is basically just the “You Index,” but not compared to anything else. It just shows you by what percentage your account balances have changed over time.

 

you_index

 

‘Allocation’ is by far my favorite section and I think the one that most bloggers have been impressed by. For all of your accounts together or each one separately, Personal Capital creates a color-coded diagram to show you which asset classes you are invested in. The high-level classifications (at least for our investments) are US stocks, international stocks, US bonds, international bonds, alternatives, and cash.

 

allocation_overall

 

You can also drill down into each of these categories. For example, US stocks can be broken down into the 9 sub-asset classes of small-cap/mid-cap/large-cap vs. growth/value/core. This is one of the drill-downs that helped me realize that I really want to make some changes in my asset allocation.

 

allocation_USstocks

 

The visualization that surprised me the most was the alternatives one. I mostly think of investments as stocks and bonds, but Personal Capital showed me that we actually have money in real estate, which was shocking! I don’t know why I didn’t know this before!

 

allocation_alternatives

 

The Investment Checkup option asks you a few questions about your goals for you’re your investments and then assesses whether you are on track for your goals.

 

checkup_high

 

It makes some suggestions about how to better align your allocation with Personal Capital’s investing philosophy. It was nice for us to see that we are first-pass on the right track (according to Personal Capital), but you have to keep in mind that their investment philosophy may not be precisely the same as yours.

 

checkup_low

 

The Retirement Fee Analyzer shows you what percentage of your portfolio you are paying in annual fees (your combined expense ratio) and what dollar amount that will add up to by the time you retire. I didn’t find my own result very insightful because we only own one retirement mutual fund Vanguard tells me the expense ratio very explicitly, but I can see how this could be a very eye-opening tool for people who own multiple funds that may be less transparent. It might even spur some people to action so it’s definitely worth checking out if you aren’t 100% sure what you’re paying.

 

retirement_fee_analyzer

 

How to Invest is a pitch for Personal Capital’s investment services, which I will get into more in my next review post.

 

My Verdict

 

I think Personal Capital is offering a quality service with this software and the visualizations and analysis of your investments. I think this can be a very powerful tool, especially if your brokerage firm or workplace-based account is not super transparent about the allocation and fees. However, keep in mind that no companies truly offer anything for free. It is clear that Personal Capital wants to get more clients for its investment services, and it uses the information you give its software to identify people to pitch to. Hey, there’s nothing wrong with that in my opinion, but you just have to take their recommendations with a grain of salt.

 

I am going to continue using Personal Capital’s software to visualize our investments because I believe it helps me understand some aspects of our money in a way that I’m not currently getting from our brokerage firms and Mint. It will be even more useful to us over the next months and years as we change our investing strategy and add workplace-based retirement accounts. For that reason, I think it’s definitely worth signing up for. However, as of now Personal Capital will not replace Mint for us in terms of tracking everyday spending. It has the capability, but we have too much history with Mint. Just being honest, here! 🙂

 

I recommend that you sign up for Personal Capital (if you are open to services like this having your account information) if you have investments. You may be surprised by what you learn from the asset allocation visualization or the fee analyzer and I think it will help you make good investing decisions. However, if you have over $100,000 in investments now or will in the future, you should be prepared to be approached by their investment services arm. More on the pitch we received from Personal Capital’s investment services next time!

 

If you decide to sign up for Personal Capital, will you please do so through one of the banners or text links in this post? I may receive a commission if you do so. Thank you! Free Financial Tools at PersonalCapital.com

 

 

How familiar are you with your investment asset allocation? Do you like to use tools like Personal Capital to pull all your information together? Do you often give your information away to get something for free?

 

Written by

Filed under: investing · Tags:

13 Responses to "Personal Capital Review: Software"

  1. I use Mint to get a high-level view and check it almost every day to make sure nothing untoward has happened (like people making charges on my credit card or something.) I do have a Personal Capital account but haven’t spent much time playing with/exploring its capabilities; I have a very simple investment strategy right now, and not all that much invested, so it’s on the back burner.
    [email protected] recently posted..Why I Don’t Percentage-Budget

    1. Emily says:

      I like Mint quite a bit for tracking but we don’t use the investment tab too much except just to know the current balances. However, another piece of software would have to be ultra amazing to get us to switch away from Mint! I think PC is helpful even with a simple investment strategy, though more so if there are a lot of moving parts just for being able to keep track and compare brokerage firms against one another.

  2. Fiby says:

    I tried Personal Capital. I linked it to all my accounts, and liked the visualizations, but at the end of the day, my paranoia about handing over my passwords to Personal Capital won out – I unlinked all my accounts and changed all my passwords. I think it’s a great service for those who don’t have this fear though. And I would use it if they would let me manually enter my investments.

    1. Emily says:

      That is an unusual level of paranoia. 🙂 I would also like it if I could get all the visualizations for any fund I enter without needing a linked account – then I could look at ones I’m considering buying!

  3. Leigh says:

    My boyfriend uses Mint, so in late 2013, I set it up on my accounts to make it easier to compare our spending and also partially because it was the only way to see the transactions on my Fidelity American Express from my phone. I started trying out Personal Capital recently and I like it so much more! I use my own homegrown software though that I love and have almost 11 years of data in it.
    Leigh recently posted..December 2014 net worth update (+0.5%)

    1. Emily says:

      That’s interesting that you like PC more than Mint. I’m definitely biased toward Mint because we’ve been using it so long, but I did find PC easy to use in terms of re-categorizing transactions and such. I’m sure it would take a lot for you to switch away from your own software!

  4. Jenna says:

    We’ve used Mint forever, and we’re not making big investments right now with a limited income so I haven’t tried Personal Capital yet. I still want to check out at some point.
    Jenna recently posted..Checking In With What Really Matters When Setting Goals for the New Year

    1. Emily says:

      It’s worth checking out for sure, no matter what amount of money you have invested (> $0).

  5. Waiting for them to be able to link up with Canadian accounts. So jealous!
    Emily @ Simple Cheap Mom recently posted..2015 Budget for a Family with a Toddler

    1. Emily says:

      Hmmm, do you know if that is in the works? I would think they would have to start a whole other arm for Canadian investing to justify the software.

  6. That’s good to know Emily your experiences and that you shared your review on Personal Capital as well as Mint. I have signed up and am hoping it can make a difference in my financial journey 2015. Yay! I’m so excited!

    1. Emily says:

      I hope you like what they have to offer and it helps you make some good decisions!

  7. […] high commissions to bloggers for leads). If you sign up for free and link your account information, Personal Capital provides a tool for visualizing investments as well as tracking your spending. It is similar to Mint but way better on the investment displays […]

Leave a Reply

*

CommentLuv badge