Personal Capital Review: The Best Portfolio Management Software?

After one year of using Personal Capital, I am writing a review to help readers understand more about how to use Personal Capital to manage, track, and understand their financial portfolios.

If you aren’t already tracking your accounts or net worth, check out Personal Capital! It’s an amazing online tool that provides great visualizations and is easy to use!

What Is Personal Capital?

Taken from Personal Capital website, Personal Capital is an online web application geared to “build a better money management experience for consumers” by “blending cutting edge technology with objective financial advice to empower individuals and their money”.

As of today (June 4, 2017) Personal Capital serves a total of 1.4 million registered users, is tracking a total of $350 billion dollars among all accounts, and is managing $4.5 billion assets.

What’s cool is that they are growing everyday! New user, more tracked accounts, and more assets under their management!

Sign-Up Process

The sign-up process is pretty simple.

All you would have to do is head to Personal Capital’s website, press the sign up button, fill in your details (name, email, and phone number, submit it, and you’ll have an account!

The Web Tool

After signing up, you’ll have access to an empty dashboard and this will be the default page every time you log on.

Your dashboard is empty because you haven’t linked any of your accounts (bank, credit, brokerage, etc) to it yet.

To those who are paranoid, Personal Capital encrypts your data in AES-256 with multi-layer key management and are partnered with Yodlee, a financial technology industry veteran, for an increased layer of security.

To put it in less technical terms, if your Personal Capital account is ever compromised, the hackers will be unable to move your money in, out, or between any accounts you link to Personal Capital as they never send your credentials to your browser and are only ever sent to your financial institution to gather data.

After linking all of your accounts, your dashboard will populate with details at least three months of the link date (this depends on how long your financial institution stores their data). You can see an example of my dashboard below.

If you are wondering why I blurred out the value amounts on the image even though I’m open about my Net Worth Reports, it’s because I don’t want to spoil the next edition of my Net Worth Reports.

Note: There were some accounts that encountered some syncing or connection issues when I tried to link them. It turns out that Personal Capital does not work well with 2-Factored Authorization Accounts or institutions that they have not built a connection with. For your accounts with 2-Factored Authentication, I recommend keeping it on and not linking it with Personal Capital as it would be more secure.

If you look at the top navigation bar on the front page when you log in, you will see the following items: Overview, Banking, Investing, Planning, and Advice.

When you hover over Overview, you will see the following items drop down: Dashboard, Net Worth, and Transactions.

The Dashboard Tab shows you a high-level report of your portfolio and is the main thing you see when you login to your account. You can see an image of my dashboard above.

The Net Worth Tab shows you a graph of all of your accounts values and gives you a various amount of options to sort on. I mainly use this when I want to see how much my net worth has increased last month or during the current year.

The Transactions Tab shows you all of the transactions you made. Not all transactions will be shown and only transactions gathered from the data that Personal Capital pulled in from your financial institution will be shown. Furthermore, the transactions that you made are organized into separate categories that Personal Capital thinks is correct. If it is, by any chance, incorrect, which it usually is, you can change it by expanding in on the transaction.

In Banking, you will see the options: Cash Flow and Bills.

The Cash Flow and Bills tabs are pretty self-explanatory as it shows you the amount of available cash flow and the bills that are upcoming that you’ll need to pay for.

I’ll have to admit that I don’t use these tabs quite often and I don’t expect any to actually use them when you have most of your finances automated and set on auto-pay, but nevertheless, this is very helpful for newcomers who are just beginning to learn about how to manage their finances.

In Investing, you will see the options: Holdings, Balances, Performance, Allocation, and US Sectors.

The Investing tab primarily shows you details about the investments you hold. It gives you a good amount of detail of what you hold, how it’s performing, and even the sectors you currently hold within the US. It’s pretty helpful and I use it about once a month to see if I need to rebalance my portfolio.

Note: If you took a look at my Investment Information from the Investment Options of Holdings, Balances, Performance, Allocation, and US Sectors, you will see that I blurred a lot of information out. The reason is because some of the funds I currently hold are company specific index funds and can identify who I am in real life. Additionally, Personal Capital doesn’t have a good time recognizing these funds, so you will see them pop up as “Unknown” when you analyze them in the US Sector Tab.

In Planning, you will see the options: Retirement Planner, Investment Checkup, and Retirement Fee Analyzer.

The planning options are fairly useful as they have a retirement planner simulator to help calculate whether or not you have enough to retire as your desired age. Additionally, the Investment Checkup will analyze your current investment holdings and costs and give you advice on whether or not you are too aggressive or too conservative. And finally, the Retirement Fee Analyzer will let you know how much money you are essentially “losing” per year due to your fund’s fees.

I don’t quite use any of the planning options as they are better alternatives out there on the internet.

For example, for the Retirement Planning Simulator, you could use cFireSim or FireCalc to do some financial simulations on your portfolio with your expected withdrawal rate.

For the Investment Checkup, it would be better to analyze your investments risk yourself and decide whether or not you are too aggressive or too conservative. I wouldn’t let someone else decide for me when I can decide for myself, as I do know myself best.

For beginners, however, it might be useful to get started with the Investment Checkup Tool, move on towards some investing books, and adjust from there.

Typically, you wouldn’t need a Retirement Fee Analyzer, but I can see the helpfulness when it comes to beginners. The typical advice people on Personal Finance or Financial Independence blogs are to invest in funds that have expense ratios or fees lower than 0.20%, so any fund above that percentage is pretty high in fees and deserves a second look at.

Note: For the Retirement Planning Simulator, I suggest looking into alternatives like cFireSim and FireCalc. For the Investment Checkup, it is useful for beginners to start learning about their investments, but I don’t quite see much use as your investment knowledge grows. The same applies to the Retirement Fee Analyzer.

And finally, in Advice, you will see the options: Financial Advisor, Resources, Schedule a Call, and Enroll.

As I don’t have much experience in the “Advice” tabs, I can’t say much about it. But from what I do know, I believe it is a part of Personal Capital’s Wealth Management program, where they will manage your portfolio for you for a certain fee.

I don’t quite like this option because I believe finances are supposed to be managed personally because, well, it’s supposed to be personal. By doing it yourself, it puts the Personal into Personal Finance (haha, you get it?).

Verdict

I like to use Personal Capital as a budget management tool.

There are some cool features like the dashboard, net worth graphs, and transactions details… but those are the only things I use. The other features aren’t really for me as I’ve found better alternatives or would rather do the checkups and analysis myself.

One gripe I have is the sync time that Personal Capital has with the financial institutions.

Usually, I’m a person who likes to pick things up and just go instantly. But with Personal Capital, it takes a few minute to refresh the data as it has to update its database by “communicating with the financial institution”, so I spend a few minutes waiting instead of just getting the updated information instantly.

Another thing that I feel like Personal Capital should have is the ability to create a budget and monitor it. Currently, there is no way to do it, but this isn’t much of a hindrance to me as I have migrated my budgeting needs over to You Need A Budget and plain old Microsoft Excel spreadsheets.

In the end, I would recommend beginners to use Personal Capital as a way to start learning about their finances. For advanced users, it might not be as helpful and may be better to just use good old fashioned Microsoft Excel sheets as there would be much more power in customizing your own sheets with beautiful graphs. The only thing that would be difficult for advanced users would be the automated syncing between accounts, but that can be bypassed if you like entering your transactions manually (hopefully you don’t spend a lot every month or that would be a pain to do!).

If you aren’t already tracking your accounts or net worth, check out Personal Capital! It’s an amazing online tool that provides great visualizations and is easy to use!

Have you used Personal Capital before? What are your thoughts about it? If you haven’t, would you start using it to learn more about your finances? Why or why not? Let me know in the comments section below!

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4 thoughts on “Personal Capital Review: The Best Portfolio Management Software?

  • June 5, 2017 at 8:53 am
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    I gave PF a go as well a few months ago, just to see what all the fuss was about. We’re Picky about how we track our money, but I do like monitoring how our net worth slowly gets out of the red each month. πŸ™‚ It would take forever and a day for me to track my own net worth. I do have syncing issues with my bank accounts, so I have to re-authorize them each time. If I didn’t have to do that I’d probably enjoy PF more. But that’s more of an issue with my bank than anything.

    Reply
    • June 12, 2017 at 5:37 am
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      I agree that syncing is a problem that I dislike with PF.

      I typically use Mint for the syncing because it’s faster and shows me it faster than PF.

      Reply
  • June 7, 2017 at 5:21 pm
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    I use PF to get a snapshot of overall net worth and quickly see if transactions between financial institutions went thru to one another. This way I don’t have to separately log onto banking sites to check transactions. I also use it to see portfolio allocation.

    Reply
    • June 12, 2017 at 5:39 am
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      I agree with you, SMM. That’s typically what I do as well.

      I have been considering on just moving to a spreadsheet as that will make me more proactive in terms of understanding all of my line-items, but that’s still a work in progress.

      Reply

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