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).

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.

‘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.

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.

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!

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.

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.

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.

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?