Close

The Personal Capital Experience

Personal Capital

Frustration wells as it becomes increasingly clear your accounts will not be updating as an endless sea of red exclamation points stare back at you. No matter what you try the accounts will not budge taunting you with stale information. Despite these frustrations I’ve found Personal Capital to be a useful addition as a tool for managing my personal finances.

In Personal Capital’s defense I don’t think the challenges I’ve faced are primarily due to a shortcoming on their part. It appears to be an issue with certain financial services providers I use not playing nice in terms of sharing account data. As some accounts update seamlessly while others seem to border on the impossible in terms of getting them updated in the interface.

I began using Personal Capital as a potential replacement for a spreadsheet I was updating manually. Given the challenges with updating the accounts I’ve continued to use my spreadsheet. The process of updating the spreadsheet is easier because of Personal Capital though.

As standards evolve to make data sharing between financial services providers more seamless, Personal Capital’s value proposition should continue to strengthen.

What I like

  • Great Interface as you’d expect from a former founder of Intuit
  • Consolidated Reporting across all of my accounts
  • Real Time Investment Updates (this is a nice feature if you have investments spread across multiple accounts because it allows you to see updated pricing on all of your investments in one place)
  • Free
  • Respectful salesmanship

 

Their business model is to offer wealth management advisory services to users. After signing up I received a few emails and a call from the advisor assigned to my relationship. After mentioning most of my assets were in my company’s 401(k) plan. Meaning I was not in a position to leverage much of Personal Capital’s offering. The advisor amicably ended the call and I have not been contacted since.

What I Don’t Like

  • Challenges with Updating Accounts
  • Mislabeling of Investments
  • Lack of Override Capability for Mislabeled Investments

 

The allocation reporting is not as granular as my customized spreadsheet and appears to misclassify assets. For example an Emerging Markets Equity Fund I’m invested in is classified as cash. So I do continue using my spreadsheet to evaluate my investments. As I don’t feel I can rely on Personal Capital exclusively to evaluate them.

Getting Started

To get started you input all of your various financial accounts (401(k), IRAs, mortgage, credit cards, student loans, etc…) Personal Capital combines saving vehicles to report assets and combines debts to report liabilities. Assets – liabilities = net worth which is the focus of Personal Capital’s reporting.

From there they have a variety reporting you can use to breakdown the net worth figure. Including:

  • Cash flows
  • Portfolio Balances
  • Portfolio Allocation

 

The net worth reporting is done via graphs and the graphs are interactive so you can scroll through them for additional details. Along with the net worth reporting they also consolidate all of your transactions for review. To assist with identifying patterns on how you are spending money versus how you are making it. Transactions are broken out into categories you can conduct a more detailed review on.

Along with the net worth and transaction reporting there is a menu of investment reports including:

  • Holdings
  • Balances
  • Performance
  • Allocation
  • US Sectors

 

As I mentioned I really like the holdings report because it consolidates all of your investments in one place. My wife and I have 6 investment accounts from various jobs and for various purposes so having everything update in one place is helpful. This is the report I use to update my customized spreadsheet which is much more efficiently done in one place versus having to visit multiple sites previously.

Balances tracks movements in your investment accounts over time and shows how they’ve changed on both a percentage and dollar basis.

Performance is the other report I think is really helpful. Determining your overall performance when you have multiple investment accounts can be a challenge. In the past I’ve combined things back of the envelope to try and estimate how my portfolio has performed. The performance report eliminated this challenge by providing a total return on my investment accounts on a consolidated basis.

I do not use the Allocation or US Sector reports much. I rely on my customized spreadsheet instead of these reports.

Personal Capital also has some advisor tools for you to leverage. I have not used these much as I am not an optimal client for their advisory services. They are worth checking out though. The Retirement Fee Analyzer is particularly useful to help you identify investments charging you excessive fees versus comparable alternatives.

If this article has peaked your interest in Personal Capital I think it’s worth taking a look at. I prefer it to Mint for example. It takes a more holistic approach to personal financial management by incorporating assets and I find the reporting available to be superior to Mint’s. Hopefully you don’t encounter the same challenges I did with account updates and can use it more seamlessly to monitor your progress towards achieving your financial goals.

Steve Miller
Follow Me

Steve Miller

Is a CFA® Charterholder and founder of DebtMD.com. A site devoted to helping people discern insights into their finances. The CFA designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

Steve recently authored Escaping Student Loan Debt to assist student loan holders with developing and implementing strategies to minimize their repayments.

Visit DebtMD.com
for a free debt elimination analysis and subscribe to the newsletter for a free copy of the Snowball Effect, an 8000 word report on strategies for eliminating debt.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
Steve Miller
Follow Me

Latest posts by Steve Miller (see all)