Personal Capital Review – Forbes Advisor


If you have $ 100,000 in assets to manage and are willing to pay higher fees, you’ll have access to Personal Capital’s robo-advisor wealth management features.

Perhaps the most interesting thing for you is access to live finance professionals. These trustees answer your investment and retirement questions, build a comprehensive financial plan, and assess how well you are achieving your goals. This can bring tremendous relief to those who are firmly entered into middle age and want to make sure they are saving enough for their children’s college education as well as for their own golden years.

When it comes to the investments themselves, Personal Capital employs a team of strategists and big hitters to help you create tax-efficient portfolios that will contribute to your wealth over the long term. While Ellevest has Sallie Krawcheck and Wealthfront has Burton Malkiel, Personal Capital has figures such as Harry Markowitz of modern portfolio theory fame and Shlomo Benartzi, a leading behavioral economist, as key contributors.

Part of the appeal of Personal Capital is its so-called personal strategy, which creates a specific investment portfolio for you based on your needs and long-term goals. It uses Monte Carlo simulations to test the likelihood of you meeting your retirement needs and employs a combination of low-cost exchange-traded funds (ETFs) and potentially certain individual stocks and bonds to create a portfolio that aims to maximize your savings. returns based on the timing and level of risk you say you are prepared to take on a questionnaire.

Those looking for an advantage over a purely passive indexing approach – keeping your money in an ETF that tracks a broad index like the S&P 500 – may appreciate Personal Capital’s “smart weight” approach, which allows you to ” have access to smaller values ​​and potentially higher growth investments than what you might get from competing robo-advisers.

This approach adds an advantage of active investing, especially in the equity portion of your portfolio, which may involve buying individual stocks. It also helps explain why Personal Capital charges higher fees than many of its robo-advisor competitors. The careful addition of individual actions requires more than a simple algorithmic approach on his part.

Personal Capital’s hybrid approach to robotic investing – mostly passive investing, some active investing – may make sense if you’re the type of person who’s willing to pay higher fees in the hope of getting higher returns. But keep in mind that these higher costs do not guarantee better results and you run the risk of underperformance.

Personal Capital will also help your portfolio be tax-advantaged through tax-loss harvesting, a more standard robotic advisor function, as well as reviewing your asset allocation to your taxable and tax-advantaged retirement accounts. This allows Personal Capital to place securities that pay regular income, like bonds, into tax-efficient accounts, such as an Individual Retirement Account (IRA), so they don’t increase your taxes. This can help you feel more comfortable increasing the exposure to stocks in your taxable brokerage account.


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