Personal Capital offers free budgeting, investment tracking, and retirement forecasting
- Personal Capital offers a free investment tracking and analysis app.
- Free tools include cash flow tracking, portfolio visualization, and a retirement planner.
- Personal Capital also provides affordable wealth management for a fee — but only if you want it.
Personal Capital is a free personal finance app that combines account aggregation and budgeting with investment tracking and retirement planning tools.
The app tracks your spending and net worth like many other apps, but stands out from competitors with its ability to track your investment portfolio’s performance and allocation. Find out if this app could help you manage your finances in our comprehensive Personal Capital review.
The Personal Capital app is free to use and free of ads; their business model is to convert a small percentage of users to their full-service wealth management business.
Personal Capital is available as a desktop app but also includes award-winning mobile apps for iOS and Android.
I discovered Personal Capital several years ago after years of using and testing various personal finance apps like Quicken and Mint. Those budgeting apps aggregated multiple bank and credit accounts to provide budgeting and spend tracking tools. The apps were useful, if somewhat clunky, but they offered few insights into my investment accounts other than updating account balances to calculate net worth.
Personal Capital launched as an investment app above all else. Although it does an excellent job tracking your income and spending, Personal Capital provides tools for tracking investment accounts, visualizing asset allocation, and planning for retirement that are hard to find anywhere else.
In this Personal Capital review, we’ll give you an overview of what the app does and how you can use it to make more informed investment decisions and better prepare for retirement. We’ll also tell you a bit about Personal Capital’s affordable wealth management service so you understand how they’re able to offer such robust tools at no cost.
What is Personal Capital?
Personal Capital is a financial technology (fintech) startup founded in 2009 to deliver high-tech personal finance analysis tools and independent financial advice. The free Personal Capital app provides account aggregation and cash flow tracking, investment portfolio analysis, and retirement planning tools.
As the company evolved, it launched a nationwide, online investment advisory business to compete with traditional office-based financial advisors. If you want, Personal Capital will manage your assets for an annual fee.
In 2018, Personal Capital claimed over $8 billion in assets under management. But even if you’re not in the market for an investment manager, Personal Capital provides its app and tools for free as a lead generation tool for their paid advisory business.
What does the Personal Capital app do?
With a free account, Personal Capital can provide a unified view of most—if not all—of your financial accounts, including bank accounts, credit cards, brokerage accounts, retirement accounts including IRAs and 401(k)s, and more. Personal Capital’s free features cover three main areas:
- Budgeting and cash flow tracking
- Portfolio visualization
- Retirement planning
Cash flow tracking
If you've ever used any budgeting application such as Mint, Quicken, YNAB or others, the cash flow tracking feature within Personal Capital will look familiar.
If you link your checking account and credit cards to Personal Capital, the app will automatically download and categorize your transactions to provide an integrated view of your income, expenses, and net expenditures. You can easily compare spending between periods (for example, how this month is trending compared to last month).
Although Personal Capital's cash flow tracking is helpful, the app's investment analysis tools are the real reason to sign up for a free account. When you link one or more brokerage or other investment accounts to Personal Capital, you'll have access to a variety of tools that can be incredibly helpful for managing your portfolio and planning for retirement.
Personal Capital's allocation view shows you the allocation of your portfolio across seven categories: Cash, international stocks, U.S. stocks, international bonds, U.S. bonds, alternatives and unclassified. You can view the allocation across all of your investment accounts or filter by account or account type (retirement only, for example).
The holdings view not only gives you performance data for each of your individual investments, but also shows you how your portfolio is performing compared to major stock market indices. In the following screenshot, you can see how Personal Capital's You Index® for a selected stock/bond portfolio compares against the S&P 500, DOW, foreign stock, and U.S. bond indices. As with the allocation view, you can filter performance by individual account or account type and customize the time period.
A free Personal Capital account gets even more powerful when you tap into its retirement planner. The free retirement planner replicates the kind of projection you might receive after meeting with a personal financial advisor at a cost of several thousands of dollars—or more if you're paying them a percentage of your investable assets every year.
When you enter your desired retirement date, desired retirement expenses, and other spending goals (such as college tuition, vacations, or other major purchases), Personal Capital provides an estimate of how your investments will perform throughout retirement. If you're off-track, you can easily adjust parameters (such as spending less, saving more, retiring later, or adjusting your portfolio allocation) to see how your projection changes.
Once set, Personal Capital's retirement planner will automatically adjust for your portfolio's performance every time you log in.
Retirement fee analyzer
Finally, Personal Capital's retirement fee analyzer can help you identify cost savings opportunities within your retirement portfolio. This is especially helpful for giving yourself a 401(k) check-up, as employer-sponsored retirement accounts like 401(k)s tend to hide high-fee investments relative to funds you might select yourself in other kinds of accounts like an IRA.
How to sign up for a free Personal Capital account
If you're interested in trying Personal Capital's suite of free investment tools, head over to Personal Capital and create a free account.
Although it takes just a minute or two to create an account, plan on spending about 10 or 15 minutes linking your investment accounts. Personal Capital makes this as easy as possible: For most accounts, you'll simply need to enter your username and password within Personal Capital or login to your investment account in another browser window while leaving Personal Capital open.
Is Personal Capital secure?
In a word, yes. Personal Capital uses similar security protocols to the bank and investment accounts you'll be linking.
Personal Capital also requires you to authorize each computer, phone, or tablet you use to access the app by receiving a text-message, phone call, or email the first time you log in from that device. (It will also re-prompt you for a code if you clear your browser cache or use a private browser tab). This isn't exactly full two-factor authentication, which would require a one-time code in addition to your password at each login, but it's close.
Finally, while the risk of a data compromise is small, you can also be assured that your account links to Personal Capital are read-only. That's to say that if your Personal Capital account were to be hacked, nobody can use that access to then make any changes to your linked investment accounts (or steal any money). Account numbers are not displayed anywhere within Personal Capital.
Personal Capital: Affordable wealth management
How is Personal Capital free? Personal Capital's investment tracking tools are, in fact, free. Personal Capital is also totally free of outside advertisements unlike other free financial tools like the free credit score tracking apps CreditKarma and Credit Sesame. That's because Personal Capital is primary business is not consumer-facing tools but a premium but affordable wealth management service
For investors with at least $100,000 who don't want to take the time to learn how to manage a portfolio year-in year-out or who would be more comfortable with professional investment managers on their side, Personal Capital will manage all of your investments for you for an annual advisory fee.
Personal Capital competes with traditional financial advisors by providing essentially the same service for a much lower fee. Because Personal Capital's annual wealth management fee incorporates trade commissions and custody-fees, there are no surprises.
As a Personal Capital wealth management client, you'll have a dedicated advisor who handles 200 clients, give or take. You can schedule consultations with your advisor online. Obviously, working with a Personal Capital advisor is slightly less personal than hiring a local wealth manager with whom you can meet in person. As Personal Capital advisors' client loads are on the higher side, it's reasonable to say “you get what you pay for” in terms of advisor availability and dedication to your account. However, if you want professional oversight of your investments, Personal Capital might provide the perfect balance of lower cost and individual attention.
Compared to traditional financial advisors, many of whom charge 1.0% of your invested assets per year, Personal Capital's advisory fees are arguably more affordable:
- 0.89%/yr. for balances up to $1 million
- 0.79%/yr. for balances between $1 and $3 million
- 0.69%/yr. for balances between $3 and $5 million
- 0.59%/yr. for balances between $5 and $10 million
- 0.49%/yr. for balances above $10 million
Personal Capital's fees slot in between individual financial advisors on the higher end and robo-advisors on the lower-end. Robo-advisors like Betterment, Wealthfront, and Wealthsimple charge fees ranging between 0.15% and 0.50% per year for automated investment management with either no or limited access to an individual advisor.
Where to learn more
Hopefully this Personal Capital review has given you a helpful overview of how a free Personal Capital account can help you track your finances and analyze your investments. Visit Personal Capital to learn more or try their investment tools with a totally free account. Although there is no obligation to use any of Personal Capital's premium services, users of the free account will have the opportunity to schedule a free consultation with a financial advisor if desired. If you try Personal Capital's free tools and decide they're not for you, then you can simply unlink your investments accounts and delete your Personal Capital login.