Best Robo-Advisor for High Net-Worth (2020)

Best Robo-Advisor for High Net Worth Individuals

Personal Capital’s range of tools, dedicated financial advisor, accounts, and fees all benefit high-net-worth clients.

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Our writers nor our editors receive direct compensation of any kind to publish information on TheTokenist.io. Our company, Tokenist Media, is community supported and may receive a small commission when you purchase products or services through links on our website. See more information here about how we make money.

Personal Capital is our top pick for the best robo-advisor for high-net-worth for many reasons that we’ll get into soon.

Personal Capital is one of the most popular fintech products out there. The company was founded in 2009 with the aim of meeting the needs of clients who wanted quick, and smart advice, without the hassle of speaking to customers, through cutting-edge technology.

Since then, it has grown and evolved into an $8 billion company in assets under management. There are whispers of the company going public but that is mere speculation right now.

Below, we’re going to discuss why Personal Capital is good for your capital, personally. We’ll go through it’s highlights, as well as it’s downfalls including, taking into account its services, products, fees and customer services.

To finish, we’ll do a run-through of the highlights, and why we think Personal Capital is the best broker for high-net-worth clients. First, we’ll start by outlining who Personal Capital is best for.

ProsCons
Personal financial planner available to clientsA high minimum of $100,000 for investing account customers
Strategies to optimize tax help keep tax burdens relatively lowMobile app is not as advanced as the desktop platform
Private Client services are particularly valuable for high-net worth clientsClients might be plagued with calls with no opt-out option visible when signing up
Retirement planning is excellentRobo-advisor fees are high

Overview and Summary

  1. Personal Capital does not identify solely as a robo-advisor, but a digital asset management service as it also offers Private Client service, a personal financial advisor to clients that can be contacted as much as you need them.
  2. Just under two million people use Personal Capital in one of those two ways. The robo-advisor’s tools, collates data from your available accounts and analyses it before recommending the best options moving forward to increase returns. These tools are useful for traders at all levels, no matter your chosen bank or investments.
  3. The asset management offers on-call private financial advisors to clients with a high account minimum of $100,000 to start.
  4. Personal Capital offers a wide range of unique tools and features that help set them apart from competitors, including a Retirement Planner, Retirement PayCheck, Cash Flow Analyzer, and an Educational Planner.
  5. Personal Capital is safe to use and has good security features.
  6. Personal Capital fees are lower than traditional financial advisors. The company does not charge trade commissions and wealth management, trade costs and custody fees are all included in the annual fee.
  7. Personal Capital provides the customer support that you’d expect from a ‘robo-advisor’. Clients can contact support by phone and email, 24 hours a day throughout the week and weekend. The support team is helpful and informative and the phones are answered relatively quickly.

What is Personal Capital?

Although we’ve given a brief outline of Personal Capital above, let’s get a little more specific.

First, a clarification is needed that although Personal Capital has placed top in our robo-advisor ‘award’, the company does not identify solely as a robo-advisor, but a digital asset management service. This is because the firm also provides a Private Client service; a personal financial advisor to clients that can be contacted as much as you need them.

Personal Capital Homepage ScreenshotThat being said, Personal Capital was also one of the first to lead the way for automated elements and putting tools directly into the hands of customers. Which is why it falls into the Robo-advisor category too.

Just under two million people use Personal Capital in one of these two ways. The robo-advisor tools, collates data from your available accounts and analyses it before recommending the best options moving forward to increase returns. These tools are useful for traders at all levels, no matter your chosen bank or investments.

The company’s Asset Management Service offers an on-call private financial advisor for clients with a high account minimum of $100,000 to start. While this does have the potential to put a lot of investors outside of the company’s audience, anyone who can meet this target will reap the benefits.

Most clients do primarily use the free version, although the Wealth Management Service is growing and now has over 18,000 clients, with a combined total of $8 billion in assets under management.

More and more, clients are upgrading to the Wealth Management Service to get some well-needed assistance and guidance. The company was founded in 2009, only 11 years ago and is based in San Carlos, California.

Personal Capital is Best For

Although this article will be more focused on high-net-worth investors, if you categorize yourself as one of the following types of traders, or with the following needs, then read on. This review is applicable to you, too.

  • High-net-worth investors
  • Investors that prefer to be hands-off
  • Looking for tax optimization
  • Quality financial management tools
  • Personal financial advisor

Now listen. The sheer nature of Personal Capital is more unique than other easily categorized advisors. But, that’s not all that makes them stand out.

Their services, tools, and features are also unique in their own right and might just be perfect for your individual needs. You might even find some features you never knew you needed until now.

What Makes Personal Capital Unique

Retirement Planner: This feature helps you discover if you’re on your way towards a good retirement plan. This feature is now currently available on mobile

Retirement Paycheck: Helps guide you on how to take out your retirement savings during your retirement in the most tax-friendly way.

Cash Flow Analyzer: This tool helps you budget by tracking your spending habits by week, month or year. Available on mobile, you can track your spending throughout the day to find out where you might be going wrong.

Exclude From Advice: Maybe you don’t want any investment advice, and would like to make your own decisions. The company doesn’t want to offer any unsolicited advice, and lets you choose whether or not you would like to get some.

Education Planner: This is ideal for helping students figure out which colleges best suit their financial needs by comparing and contrasting fees.

401 Fee Analyzer: Unsure how much exactly your retirement plan is adding up to? Hidden fees can catch a lot of people off guard and really add up. The 401 Fee Analyzer breaks down the costs for you.

Investment Checkup: Your investment might be going downhill and you might not even know it. Personal Capital will determine the health of your investment allocation by looking at the risks.

Personal Capital Investment CheckupOnce a diagnosis is determined, a recommendation is given for a suitable asset allocation.

Asset Allocation Target: This will help you discover whether you are over or under any major equity categories.

Upcoming Bills: Allows you to see a report of all bills due and upcoming bills

Email Summaries: Receive an email that summarises your investment portfolio and spending.

Personal Capital Cash:This is a cash account that pays interest of around 2.30% APY with no fees. This varies from a traditional savings account because there are no transaction limits, and no minimum balance is needed.

Free Personal Finance Software: Is it Really Free?

“The tools are free. Our advice is honest, The future of wealth management is here.” This is on Personal Capital’s main page. But, how true is it? Are the advisor’s tools completely free?

Yep, totally.

While it might be difficult to believe for those skeptical of hidden charges, Personal Capital’s Finance Software is completely free.

personal capital financial tools

You’ll get the standard of customer support that is expected from a robo advisor, in addition to consultations with real, human advisors, and there are plenty of tools to utilize with the free version, too. So, you won’t feel like you’re missing out if you don’t upgrade.

That means, there’s no need to pay a cent. You can go ahead and link your accounts, track and budget your spending, stay on track of your retirement plan, discover your net worth, as well as analyzing your fees.

All these first-class features will help you really get in control of your finances, and they’re all completely free ($0). Anyone eager so far can create an account now, but for everyone else, read on.

Personal Capital’s Retirement Planner

Personal Capital’s Retirement Planner can help you figure out where you’re at with your retirement plan, and if you’re heading in the right direction, or not. This advanced feature enables you to create and track your spending goals and project portfolio valuations for the future. Once you’ve inserted all the information, the tool will collate it all and analyze it before telling you how everything is looking – pretty neat!

Another cool thing about this is: there aren’t many of its kind. And, its features far outshine and outnumber the ones that are similar, including the many paid tools available.

Personal Capital Retirement PlannerThis tool is detailed, comprehensive and informative. It includes a variety of variables, and allows you to create alternative scenarios so you can see how different plans would play out.

Another thing, you don’t even need to enter any of the information manually; all the stats are automatically populated. This simple feature immediately saves time and energy.

401(k) Analyzer

The 401(k) analyzer tool works similarly to the Retirement planner tool in that expenses are derived from any accounts links to the service. After that, the tools begin making some assumptions that you can customize, and you’ll see a list of any ghost fees that may have been slowly, or quickly, gnawing into your plan.

Annual fees that add up to a lot more than you are expecting. It makes sense to keep an eye on things and pay attention to any unexpected deviations as time goes on.

Will Your Money Be Safe With Personal Capital?

Yes, Personal Capital is safe to use and has good security features. You must register and authorize each platform before you can use it. You’ll have the option to select whether you want to verify by phone or email.

Personal Capital Financial Software SecurityIt’s a good, quick way to identify the user and keep your information safe. It would be even better if all financial institutions had this feature – We can dream.

Dreams aside, Personal Capital’s security measures are a one stop job. Once you register your device you won’t need to do it again.

iOS devices that have finger recognition can use the finger scanner on Personal Capital’s app. This isn’t first class security, we know, but it is an extra coat of protection, at the same time.

Any information entered into the platform is locked in a one-way encryption token to access your account at some point in the future.

If you’re thinking about withdrawing a little from your account now and then. Think again.

Personal Capital doesn’t allow you to make withdrawals or transfers. Anything you can see is from a screen only.

To finish, as long as you don’t enter your account information (highly do not recommend doing) then your account information won’t be visible.

Personal Capital’s Wealth Management Service

The website is fee free, and you are never under any obligation to pay for the advisor service.

However, Personal Capital Advisors might be able to help you get where you need to go, for a price. The latest information available states that Personal Capital manages over $8.5 billion in assets. Here is a breakdown of their annual fees:

Personal Capital Commissions & Fees

Minimum DepositPersonal Capital Fees & Charges
$100,000 to $1 million0.89% per year
$1 - 3 million 0.79% per year
$3 - 5 million 0.69% per year
$5 - 10 million 0.59% per year
$10 million or over0.49% per year

A minimum of $100,000 is needed to begin using the wealth management service. As we can see, the higher the investment, the lower the fees. Which means that high-net-worth clients will benefit the most from Personal Capital.

Management fee

Personal Capital fees are determined by the value of the assets held in their account. The company offers tiered asset management. Those with $100,000 to $200,000 in assets qualify for the first tier, Investment Service.

These portfolios include ETFs and priority support services is provided. Those with $200,000 to $,00,000 qualify for the Wealth Management tier; clients receive a personal financial advisor and a more varied portfolio consisting of stocks, tax-loss harvesting, and more.

Those with a really high-net-worth of $1,000,000 or more, will really appreciate Personal Capitals Private Client. This portfolio is extremely flexible and includes individual bonds along with private equity investments.

The Private Client tier is trying to directly compete with established wealth management firms, like Edward Jones. Fees can go as low as 0.49% and average about 0.79% per year for assets under management – For assets over $10 million. High-net-worth clients would usually have to pay much higher fees than these with traditional wealth management firms.

Average advisors can cost 1% and up, a significant increase on Personal Capitals fee. Traders with $200,000 and up will have access to a dedicated advisor and more flexible, customized portfolios.

However, when Personal Capital is compared with other robo-advisors, the firm comes in with higher fees. Any clients with less than $1 million will be charged 0.89% of assets managed. This is in comparison with other robo-advisors charging fees of around 0.25%.

Even when looking at online financial advisors like Vanguard’s Personal Advisor Services, Personal Capital charges higher fees: Vanguard has fees of 0.30% (up to $5 million), though a dedicated advisor is only provided once you meet the $500,000 investment minimum.

Account minimum: Personal Capital has an account minimum of $100,000. This immediately positions the company’s target audience towards those with a very high-net-worth.

Are Personal Capital’s Fees Worth It?

Overall, Yes. Personal Capital fees are lower than traditional financial advisors. The company does not charge trade commissions and wealth management, trade costs and custody fees are all included in the annual fee.

A personal advisor is also included, whether you use the wealth management service or not. An appointment can be easily scheduled through the app and you can get assistance from your advisor as much or as little as you feel is necessary.

What features exactly are included in this service? Let’s take a quick look.

Wealth Management Features for High-Net-Worth Clients

  • Smart Indexing: This feature provides indexing by combining Modern Portfolio Theory with equal size weighting.
  • Direct Investing: Minimize your fees by investing in stocks directly as opposed to ETFs
  • Account Options: Personal Capital offers several account options to choose from; Traditional IRA, Roth IRA, Joint Accounts, Trusts, and last but not least, a potential high-net-worth traders favourite, taxable accounts.
  • Automatic Rebalancing: Your portfolio will be automatically rebalanced once your portfolio varies passes the asset allocation.
  • Tax Loss Harvesting: This feature helps to minimize taxes in the previously mentioned, taxable account.
  • Advice offered for 401(k) and 525 Plans: Financial advisors can offer you support and advice on your 401(k) and 525 Plans.

The asset allocation deserves to be discussed in more detail. Personal Capital uses a wide variety of individual securities and ETFs to create a portfolio.

Personal Capital wants to help increase clients portfolio performance and of course, annual fees will not help this in the long run. Index funds in addition to annual fees can really bring up your costs when put on top of the management fee Personal Capital charges.

This means that index funds would decrease your returns over the year, which is why Personal Capital chooses to invest in individual stocks in a variety of funds instead.

To elaborate, individual securities will create a more tax efficient portfolio (as long as you have a taxable account, that said). Therefore, while a variety of funds will not be a complete replica of index funds, you can count that it will be almost there, and you will benefit from lower fees and taxes.

Not to mention, your taxes will be managed better with Personal Capital’s tax-loss harvesting.

Additional Personal Capital Features

Personal Capital Mobile

Personal Capital’s app is available on both iOS and Android devices. It has a clear design that customers acknowledge in their shining reviews of both the iOS and Android versions.

That said, not all features are available on the app, such as the performance statistics and the Investment Checkup. The app is probably handiest for it’s dashboard where you can see your finances on one screen – and this is most likely what you’ll be looking out for most of the time.

Personal Capital Customer Support

As we briefly mentioned above, Personal Capital provides the customer support that you’d expect from a ‘robo-advisor’. Clients can contact support by phone and email, 24 hours a day throughout the week and weekend.

The support team is helpful and informative and the phones are answered relatively quickly. This is the same for both versions of the company, although Wealth Management clients will also have access to their assigned dedicated advisor.

There’s also an FAQs section where you might find answers to more common questions, in addition to a Support Portal with sections on Getting Started, a How To, Investments, and Troubleshooting.

Clients in the Wealth Management tier can contact their advisor as soon as their account is set up.

How To Create A Personal Capital Account

You can sign up for Personal Capital through the website. You start by providing your email and phone number, then creating a password.

Signing up to Personal Capital is quick and simple. Just visit the website and provide your email and phone number while creating a password.

After this, you’ll be asked some personal information including your name, age and the age you expect to retire at. Personal Capital does focus strongly on retirement planning and services.

Personal Capital Signup PageOnce you’ve provided the information necessary, you can begin adding accounts. Personal Capital access over 12,000 financial institutions, or alternatively, just add the name and address of your institution/s.

Firstly, Personal Capital will look at your financial accounts for the past three months and begin to analyse them. This analysis will set the foundation for Free Dashboard, and the recommendations that Personal Capital offers.

To upgrade to the Wealth Management Services you’ll need to get in touch with a financial advisor to kick start things. Or, if you wait a bit, a financial advisor will get in touch with you.

This process will require more information than the original set-up, such as documentation that confirms your identity. Then, you will be asked to link your accounts to transfer funds into your Pershing account; where your investments will be held.

In order to determine your risk tolerance, goals and timeline you’ll be asked to complete a questionnaire. On top of this, you’ll be asked to take a call with a financial advisor where you’ll hash out all the specifics.

Finally, a portfolio will be created based on all of the information gathered, including from the questionnaire and your call with the financial advisor.

A Summary: Why Personal Capital is the Best Robo-Advisor for High-Net-Worth

Personal Capital has been chosen as the top pick for high-net-worth clients for their services, tools, security and strong features. Unfortunately, this does mean that it may not be the best option for anyone that doesn’t meet the company’s high minimum deposit.

However, anyone considering Personal Capital can check out the app to get a quick analysis of where they would fit into the three tiered structure. It might be a great option for a retirement savings account, as this is a strong focus for the company.

You can also go ahead and set up an initial call with a dedicated advisor for free which will surely give you a better picture of how Personal Capital can help you, personally.

Overall, this is an excellent platform with great feedback from its users.

All you high-net-worth investors, who are more than likely the majority here, can really benefit from Personal Capital’s managed accounts.

A quick summary of the fees charged; they are higher than typical robo-advisory fees, but lower than the majority of financial advisors.

Lastly, and more importantly, Personal Capital has a structurally sounder methodology that really utilizes MPT and creates true diversification beyond a standard blend of ETFs.

If you have the money, and are looking for the best, then Personal Capital might be the right way to move forward with investing.

About Author

Tim Fries Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim is also the co-founder of Protective Technologies Capital (protechcap.com).