Personal Capital vs Wealthfront – Does A High Price Tag Mean Higher Returns?

Personal Capital vs Wealthfront Compared

With high-net-worth investors in mind, Personal Capital has created a hybrid advisor service very different from Wealthfront’s fully-digital, low-cost platform.

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.

With the markets jumping up and down and inflation rates rising, simply saving your money for retirement isn’t as effective as it used to be. That’s why so many people are turning towards robo-advisors – companies that use new technologies to invest your money at a much lower price than a traditional financial advisor.

Not all of these robotic money-makers are cheap though, nor are they all devoid of human touch. Personal Capital is a perfect example of such a robo-advisor, while Wealthfornt is opposite, with its low fees and fully automated service. So, which one is better for you?

There are a few important things to consider like security, accessibility, and the rate of returns. Luckily, this article is here to answer these quickly and precisely, because your time would be better spent investing than reading about investing advisors.

Are you better suited for a higher-cost service with a personal advisor, or a low-cost platform that can help you manage your retirement, college fund, and more from the device in your pocket? Which robo-advisor is better and how profitable are they? It’s better if these questions are answered sooner rather than later.

So, let’s get straight to it.

FeaturesPersonal CapitalWealthfront
Minimum Deposit$100,000$500
Annual FeesSome tools are free, Robo-advisor is 0.89% - 0.49% 0.25% annually
Tax Loss HarvestingYesYes
Provision of 401(k) AssistanceYesNo
Ideal ForInvestors with large starting capital, Investors who want a human advisor, Investors looking for a free set of comprehensive financial management tools Beginning investors, Intermediate investors, Young investors, Smartphone users, IRA investors, and Goal-oriented investors
PromotionsFree financial management software$5,000 in assets managed for free

Personal Capital Overview

Personal Capital Logo BannerFast Facts and Features

  • Account Minimum: $100,000
  • Fees: 0.89% – 0.49% annually
  • Ideal for: High-Net-Worth Investors
  • Automatic rebalancing: Yes
  • Tax-loss harvesting: Yes
  • Advice: Dedicated human advisor

Personal Capital, formerly known as SafeCorp, is a California-based wealth management firm known for its mix of robo-advisor and human expert services. After its founding in 2009, the company started its steady rise, reaching a milestone of over 800,000 paid and free users.

The company offers a free set of tools for self-directed wealth management and planning, as well as a paid hybrid robo-advisor service best suited for high-income investors. With more than $12.3 billion in assets under management at the moment, Personal Capital is among the most popular automated wealth management services in the US.

Wealthfront Overview

Wealthfront Logo Banner

Fast Facts and Features

  • Account Minimum: $500
  • Fees: 0.25% annually
  • Ideal for: New investors
  • Automatic rebalancing: Yes
  • Tax-loss harvesting: Yes
  • Advice: No human-assisted consultations

Wealthfront is currently one of the most well-known robo-advisors in the industry with over $20 billion in assets under management. Founded in 2014, this California-based wealth management firm offers an innovative, fully-digital advisory service with a competitive price tag.

The easy-to-use automated approach of Wealthfront’s platform combined with its low fees has made the company very popular with new, millennial investors with limited starting capital, as well as a more experienced clientele looking for a no-hassle advisory service.

Planning and Portfolio Strategy

Investing all of your money without a plan isn’t the soundest financial decision. But even if you don’t know how to set up plans and investment goals, don’t worry. Modern investing services have planning systems that enable even beginner investors to create a profitable, diversified portfolio without much effort.

Some companies like Personal Capital provide expert human advisors to help clients with every detail of their investment strategy. On the other hand, a fully-digital service like Wealthfront offers a very easy-to-use platform that can recommend strategies and help you create a suitable portfolio quickly, easily, and for a much lower price.

These are two very different methods, but judging by the success of both companies, they seem to be working. Choosing between a human and a program to help plan your financial future is in part a matter of preference, but there are many more things to consider. Let’s compare these two systems and see which one best suits your plans.

Personal Capital – Hybrid Platform for High-Net Clients

There are essentially two services to choose from – a free service and a paid service. The free service includes a powerful set of tools for goal-setting, budgeting, managing your investments, and making financial reports.

This $0 service is already being used by numerous clients and is a good way to test the waters before trusting this company with your money. You can also link all your financial accounts to the platform’s dashboard, giving you a holistic view of all your finances.

Monitoring your net worth, profits, and expenses is easy with this software, which is why this free service is so popular. There’s even a feature called “The You Index” that lets you compare the progress of your portfolio to indexes like the S&P 500, which can be a good indicator if you’re making good investments. However, if you want a professional to manage your money, Personal Capital does that as well. Although, for a price.

The starting point for Personal Capital’s investment service is $100,000. This doesn’t provide you with the full suite of features, but you get unlimited advice from a team of experts. They will then help you decide which of the 5 expert-made portfolios you should choose.

These range from the most conservative to the most aggressive. The aggressive portfolio is the riskiest one, consisting of roughly 57.3% in US Equities (VTI) and 28.7% in International Equities (VEU). A small part of it is in bonds and 10% is always invested in alternatives like gold.

According to Personal Capital’s data, this portfolio has a good track record, yielding an average annual return of 9.3% for the period between 2011 and 2018. However, if you’re interested in preserving your money without much risk there are better options than a stock-heavy portfolio.

The conservative portfolio holds 42.5% in US Bonds (AGG) and 7.5% International Bonds (IGOV), while the rest is mostly in US stocks and alternative assets like precious metals. This portfolio did the job it was meant to do in the past, yielding 4.7% per year on average in the same 7-year period.

There are 3 more portfolios to choose from if you’re looking for something in between and you can customize them to a certain extent. Your advisor will buy stocks that are looking good the moment but you can tell them to get specific assets if you want.

Speaking of advisors, you get two when your portfolio hits the $200,000 mark. These dedicated human advisors will manage your portfolio with more care than a team, make recommendations, and help your portfolio adapt to the market.

So basically, the robo-advisor algorithm will automatically make trades, making the advisors’ job easier, driving down costs. Meanwhile, human experts will help you improve your investment strategy. This is a good combination and a human advisor is especially valuable when markets are unstable since a robot doesn’t have enough experience to adapt to an unexpected event like a financial crisis on its own.

Personal Capital’s planning system is very simple but can also be customized to a certain extent. The 5 portfolios have shown very good returns in the past and the human advisors you get are always good to have close by.

The portfolio planning tools are comprehensive and free, but other services come at a hefty price. However, if you are looking for a well-rounded robo and want to invest $100,000 or more, Personal Capital might be worth checking out. There’s a bit more to say about this company, so take a look at the full Personal Capital review if you want to make sure they tick all the boxes for you.

Wealthfront – Quick, Easy, And Fully-Digital

The beginning of your investment journey with Wealthfront will start with a unique goal-setting system called “Path”. The first thing it will ask you to do is fill out a simple questionnaire. You’ll need to input information like your age, desired retirement age, monthly income, expected monthly deposits, etc.

The questionnaire is quite comprehensive, as you can even add events like a sabbatical which will be taken into consideration. The platform will then give you a suggested strategy and a projection of how your portfolio should look like, let’s say, 30 years down the line. If the prediction isn’t what you were hoping for, you can tweak your data until you get a financial projection you like.

If you want your college and retirement savings held as separate investments, you can do just that. Unlike most robos, Wealthfront allows users to invest in multiple individual financial goals, which makes this system very organized and keeps things simple for the investor.

Speaking of organized, Wealthfront also allows you to link all your financial accounts to its platform, same as Personal Capital. This feature is called account aggregation and is one of the most sought-after features by investors who want to have all their important data in one place.

Also, if there’s a shift in the markets and one or more of your goals isn’t progressing as planned, the app will notify you. Wealthfront will recommend a solution on how to solve the issue, be it depositing more money, changing up your portfolio, or moving cash from one goal to another.

Since portfolios are made to suit your preferences, it’s possible to customize them to a certain extent, which is always good to have. Although there’s no human assistance available with Wealthfront, the platform is very intuitive and easy to get used to, which is suitable for the fast-paced lives of young investors.

With this straightforward, fully-digital planning system, it’s not hard to put your portfolio on autopilot, and see your assets grow with time. Path is one of many reasons why Wealthfront is among the most popular robos in the country today. That popularity is well-deserved, though, which is why this company has made it to our 7 “Best” Robo-Advisors list, same as Personal Capital.

WINNER: Personal Capital. Both platforms have comprehensive planning systems that make investing through your mobile device easy. However, Personal capital has a major advantage – its expert human advisors. Wealthfront’s fully-digital approach might be more convenient for some, but it’s always a good idea to have a professional to help you and personally manage your money.

Pricing & Fees

The introduction of robo-advisors has disrupted the wealth management industry because of their low prices, among other things. After all, algorithms don’t get paychecks and there are no robot unions to worry about (at least not yet…🤖).

Fully-digital services like Wealthfront tend to have the most competitive pricing, while hybrid advisor services like Personal capital usually have additional costs. Whatever option you pick, though, it is still likely going to be cheaper than a traditional advisor service. Let’s see how much these two charge for their services, and if the fees are worth their weight in assets.

Personal Capital – Made For High-Net-Worth Investors

If you want Personal Capital’s experts to manage and invest your money, they can do it, but it isn’t cheap. The minimum initial deposit is $100,000, which is quite high as it is, and you only get a dedicated advisor at $200,000. OK, that’s quite a sum, but maybe the management fees are low? Not really.

The yearly management fee is 0.89% for clients with less than $1 million on their accounts, but luckily, higher balances get discounted fees. Personal Capital clients with $10 million or more have a management fee of 0.49%, which is the lowest you can get.

Personal Capital Management Fees

Personal Capital’s fees are certainly low compared to traditional financial advisors, which usually charge between 1% and 2%. However, many competing robos cost a lot less. For example, another popular hybrid advisor, Vanguard charges annual fees from 0.3% to 0.05%, which is far more alluring. If you’re looking for a human advisor at lower cost, check out how Wealthfront and Vanguard look when pitted against each other.

In addition to the great average returns of Personal Capital’s portfolio, which we mentioned in the previous section, there is one more way this company can grow your money – tax optimization. This includes multiple methods to reduce your expenses come taxing season.

One of these methods is using ETFs instead of mutual funds in order to avoid fees associated with the latter. Also, by buying individual stocks and selling them at a loss before it’s time to pay tax, the company can generate tax-loss harvesting, protecting you from giving more than you have to to the government.

Finally, there’s a method called tax allocation. The company can keep your capital gains generating assets in a taxable account and your income-generating assets in a retirement account. This combo will trim a few percentage points off your expense sheet at the end of the year, so it is a good thing to have.

One more bonus to improve your returns is the so-called tactical weighing, also known as tactical asset allocation, which is an investment strategy used to increase profits while reducing risks. Basically, your advisor will study the market and change the asset allocation of your portfolio temporarily to make a profit. Afterward, your portfolio will be returned to normal, but with a little extra value.

This sounds good in theory but in real life, it’s not a flawless method. According to an article by Morningstar, this strategy has shown success in many cases but no results in many others. This is not a proven method, but still, you can try it out and see if it works for your portfolio.

Personal Capital Wealth ManagementAll these features are welcome, but they only become available at the $200,000 mark. If your balance reaches $1 million, however, many more experts are there to watch your back. Personal capital has advisors for retirement, real-estate, stock option, etc., all of which are available when you reach this point.

Personal Capital’s advisor service has many qualities but being friendly to new investors isn’t one of them. The service starts at a very high price of $100,000 and the full set of features is unlocked at the $1 million point. The management fees could also be lower, so needless to say, this service is geared toward investors who can make a substantial initial deposit.

Personal Capital Cash

Personal Capital Cash AccountKeeping money in a Personal Capital high-yield cash account is also an option. This account is insured by the FDIC, doesn’t have any fees, and has an APY of 0.05%. If you’re a client of the advisory service, the APY is boosted to 0.10%, which is not spectacular, but most banks’ rates have gone down recently and Personal Capital is just following the trend.

There are a few high-yield cash accounts that can outpace the 2.5% inflation rate today, but this is still more than an average bank offers, so it’s not the worst way to stash your cash. These rates tend to change very often, especially nowadays, so make sure you check Personal Capital’s website for any sudden rise/drop in these numbers.

Wealthfront – Much Better For New Investors

Getting started with Wealthfront is much easier as you only need a $500 initial deposit. This isn’t the lowest minimum deposit you’ll find among top robo-advisors but it sure is a lot lower than the $100,000 required by Personal Capital. On top of that, Wealthfront has a fixed 0.25% annual management fee, which is a very competitive price.

Low fees are not the only trick up Wealthfront’s sleeve. The company uses a number of methods to lower your expenses and increase your profits in the long-run. Most of these methods are included in Wealthfront’s signature set of features called “PassivePlus”.

Wealthfront PassivePlus Edge

As a new investor, you get tax-loss harvesting straight away. This service is common among top robos and can save you enough money to basically negate the annual management fee in many cases, but it’s not the only bonus you get. The cost-reducing features really kick in when your portfolio gets big.

At the $100,000 mark, you get direct indexing, which is a method that should increase your profits by buying assets with lower taxes. Basically, instead of buying ETFs and mutual funds, Wealthfront will create your own index out of individual stocks. These individual stocks do not get taxed as much, which saves you money, and every dollar counts when you’re playing the long game.

Another interesting service the company has in place is risk parity. In theory, this is supposed to increase returns while lowering risks, but in practice, it hasn’t been without shortfalls. Utilizing this method has caused concerns for Wealthfront in the past, as the company was accused of underperforming with risk parity. However, if you find this service isn’t working for you, there’s always the option to disable it.

When your portfolio reaches $500,000 you get another additional service called “Smart Beta”. Since you are a very valuable client at this point, Wealthfront’s experts will take the time to conduct deeper market analysis and invest your money with more care. This should naturally lead to higher returns at the end of the year, so it’s a good feature to have.

The bonuses you get from Wealthfront’s cost-reducing features won’t make you rich overnight, but they can stack up over the years, giving your portfolio a noticeable boost. To top that off, this robo-advisor has competitive fees to begin with, which is why it is such a popular destination for new investors. There are more things to consider than this, so check out the full Wealthfront review to see if this company can cover your wealth on all fronts.

Wealthfront Cash Account

Wealthfront Cash AccountIf you just want to keep your cash safe without investing, you can do so with Wealthfront’s Cash account. This is a high-yield savings account that pays a 0.26% APY so your money doesn’t get as hurt by the 2.5% inflation rate as it otherwise would.

A mere 0.26% might not look spectacular, but rates have been going down all-around lately, so it’s hard to find a fantastic savings account. These interest rates tend to change very often, so make sure you check them on Wealthfront’s website before signing up.

Winner: Wealthfront.Simply put, Wealthfront costs less in almost every aspect. Personal Capital’s human advisors have a good reputation and a high price tag to boot, which means they charge about 3 times more than Wealthfront’s fully-digital service. Both companies provide tax-loss harvesting and other cost-reducing services, but PC’s $100,000 minimum initial investment is on another level compared to Wealthfront’s $500.

Investment Offerings

Personal Capital

Investing with Personal Capital means you have access to a wide selection of investment types, both US and international. You can get US and international stocks as ETFs or as individual stocks, whereas a safer option would be bonds.

There’s also a number of alternative assets that include gold, real estate, and commodities like oil, silver, natural gas, etc. Whatever portfolio option you choose, 10% will be allocated to ETFs of these alternative assets by default for the sake of diversification. Here is a list of Personal Capitals most popular ETFs:

AssetFull NameExpense Ratio
VTIVanguard Total Stock Market ETF0.03%
AGGiShares Core Total US Bond Market ETF 0.05%
VEUVanguard FTSE All-World ex-US ETF0.08%
VNQVanguard REIT0.12%
IAUiShares Gold Trust 0.25%
IGOViShares S&P/Citigroup International Treasury Bond0.35%
DBCPowershares DB Commodity Index Tracking Fund 0.85%

Wealthfront

The range and depth of Wealthfront’s offer are notable. With this robo, you can invest in bonds, ETFs, stocks, and mutual funds. There’s also a sizable selection of real estate investments, natural resources, and most other products. However, quality ETFs are Wealthfront’s bread and butter.

Asset ClassPrimary ETFExpense Ratio
US StocksVTI0.03%
US Govt. BondsBND0.05%
Treasury inflation-protected securities SCHP0.05%
Foreign StocksVEA0.07%
Municipal BondsVTEB0.09%
Dividend-generating StocksVIG0.09%
Real Estate VNQ0.12%
Emerging MarketsVWO0.14%
Natural ResourcesXLE0.14%

You can find ETFs from 11 different asset classes and a portfolio will usually hold about 6-8 of them. What’s more, these are quality financial products, with the expense ratios ranging from 0.03% to 0.14%. However, Wealthfront isn’t the only robo-advisor with an eye for ETFs.

One of the biggest rivalries in the industry today is between two giants, both with an impressive offer of ETFs and other products. Wealthfront’s fiercest competitor, Betterment, has similarly affordable prices but includes human advisors in their offer. Check out the Betterment vs Wealthfront comparison to see if one of the top dogs is your perfect robo-advisor.

Speaking of perfect robo-advisors, some investors want their ethics to resonate with their investment strategy. That’s why Wealthfront offers socially responsible investing. This feature allows users to pick stock from a list of “green” companies, which will then be bought for them. This requires a bit of extra work, as you have to study and manually choose these companies, but it’s not necessary, nor is it too time-consuming.

Winner: Wealthfront. Although there are wider options for making an aggressive portfolio with Personal Capital, Wealthfront is very well suited to long-term investing. The long-run is what most investors are looking for, which is why Wealthfront’s ETFs are very valuable for such clients. For that reason, we think Wealthfront has the upper hand when it comes to its range of assets.

Platforms

Personal Capital

Keeping an eye out on just about all your financial data and making predictions is made easy by Personal Capital’s platform. This robo-advisor’s free service is an app that allows you to track your spending, track your net worth, and analyze your retirement portfolio.

Personal Capital Platform

These tools can also analyze your portfolio and make recommendations on where it could be improved. Another handy feature is the fee analyzer, which can help uncover and calculate hidden fees lurking behind all kinds of financial transactions, be it money transfers or trading assets via an investment service.

Multiple financial accounts, like your banking account, can be linked to the platform so you can get a full picture of all your money and assets from one dashboard. With all your info in place, you can then use the platform’s prediction tools to calculate how long it will take you to reach a comfortable retirement or buy a house.

The predictions are based on a sizable amount of information including, income, expenses, age, loans, etc. All of these factors and more can be added into the equation, after which the platform will crunch the numbers and give you recommendations on how to best align your goals with your financial capabilities.

Personal Capital Projected Portfolio ValueThe platform is very comprehensive, but the best thing is that all its features are free. If you want a robo-advisor service, it will cost you, but even the platform by itself can be very valuable to users who want to keep an eye on their savings. It is a handy tool, but is it safe to keep all your financial info in one place?

Is Personal Capital Safe?

Many people don’t feel comfortable giving their financial data to a third-party service, but the platform is safer than you might think. When linking your accounts, you don’t give Personal Capital your passwords. Rather, you give them permission to log in to your accounts through your bank or investment service.

This means that in case the data on your Personal Capital account is stolen, your other accounts won’t be compromised. The company hasn’t had any security leaks or other known incidents, so they have a good track record when it comes to protecting their customers’ information and money.

Wealthfront

Like most of Wealthfront’s features, the desktop platform is made to be comprehensive and easy-to-use. You can access all the basic features directly through the main screen where the progress of your portfolio is displayed as a chart.

Wealthfront DashboardDeposit, transfer, and other useful functions can be opened through the drop-down menus on the top of the dashboard. The exact asset allocation of your portfolio is clearly visible below the portfolio’s history chart, and the workflow is very logical and intuitive in general.

An accessible mobile experience is what this app was originally designed for. Essentially, the mobile app has all the same capabilities as its desktop counterpart and is very user-friendly. The smaller frame doesn’t make things easier, but you can still look at information and change your plans easily and without much typing.

Wealthfront AppThe only time you’ll need to type is when you’re logging in and linking outside accounts to your Wealthfront account. Aside from that necessary inconvenience, the UI should be very easy to get used to and operate, even for new and inexperienced investors.

Winner: Personal Capital. Both platforms are intelligently designed and very easy to use, however, Personal Capital outshines Wealthfront when it comes to the sheer amount of features. On top of that, you can use Personal Capital’s platform even if you’re not a client of the robo-advisor.

Customer Support

Personal Capital takes good care of its clients, as they can always talk to their advisors, or ask questions by phone and email. Non-clients, however, are a different story. We sent out an email to inquire about Personal Capital’s offer to which they didn’t respond at all. Not the best way to start a relationship with a potential customer.

On the other hand, customers have it pretty good. The phone service is available 24/7 and the average waiting time is 3 minutes, which is not bad. On the Personal Capital website, there’s also a chatbot that can put you through to an actual agent if you’re a client. Reaching a human representative like this takes about the same time as a phone call, so it’s a good way to send a written inquiry.

Wealthfront does not have a chatbot or live chat capabilities, but it has a reliable email service. We sent an email with a simple inquiry about Wealthfront’s pricing and features, and they replied in as little as 3 hours, which is super quick. The email even included some useful links to relevant information, so kudos to the customer service agent for that.

wealthfront Support Email Reply

The phone service agents are licensed professionals that can help you with most issues fairly quickly, as it usually takes them 2 minutes to answer. There’s also the option to reach the customer service through Twitter, but email and phone are faster by far.

Winner: Personal Capital. Although Personal Capital’s email service left us very disappointed, having access to a dedicated human advisor is better than not having one. Wealhtfront’s customer support is very quick and professional, but this is still a fully-digital advisory, which is why Personal Capital comes out on top here.

Safety

Personal Capital is a member of the Securities Investor Protection Corporation

(SIPC) which provides its advisory service clients with $500,000 of insurance, half of which can be paid in cash. The cash account clients are protected as well, but with $1,500,000, courtesy of the Federal Deposit Insurance Corporation (FDIC).

Like Wealthfront, Personal Capital has the industry-standard 256-bit encryption, which is the same level of encryption used by the US government. There are robo-advisors with more bulletproof protection, like M1 Finance with its military-grade encryption, but Personal Capital  is also considered very safe.

Wealthfront is a member of the SIPC as well, which means users get insurance of up to $500,000 in case the company fails. Moreover, Wealthfront Cash account owners are protected by the FDIC for sums of up to $1,000,000. Wealthfront has the same level of encryption as Personal capital, which is the industry standard and is considered safe.

One thing you should keep in mind is that the money insurance provided by FDIC and SIPC is there only if the company mismanages your money, goes bankrupt, or breaks their terms of use. Investors are not protected if their portfolio loses value because of a drop in the markets. 

Winner: Personal Capital. These two companies provide a near-identical level of security and insurance. However, Personal Capital protects its cash accounts with $1.5 million, which is $500,000 more than what Wealthfront provides. The numbers are higher for Personal Capital here, which is why the company comes out on top.

FAQs

Does Wealthfront Pay Dividends?

Wealthfront does not pay dividends. The dividends are generated and then automatically reinvested. There is no way to opt-out of this at the moment and the only way to withdraw your dividend returns is to track them manually and take the money out of your account. Robo-advisors like the Canada-based Wealthsimple are better suited for you if you want to withdraw your dividend returns regularly.

Can Personal Capital Import Quicken Data?

There is no feature that enables users to directly import data from Quicken. The only way to do this is manually. For example, you can export your data to something like a CSV file, and then input everything by hand. This is not the most hassle-free method, but there aren’t many alternatives.

Bottom Line – Which Service Is Better For You?

These two services were made for two different types of clients. High-net individuals with a sizable starting investment of $100,000 or more are more likely to be interested in Personal Capital. For the most part, that’s because dedicated human advisors and handsome yearly returns have made many clients see past the high fees, and embrace Personal Capital as their robo-advisor of choice.

If you want to start a bit smaller and grow your way up to a large portfolio safely, Wealthfront is far more suitable. The pricing is low to begin with and all the cost-reducing features can even negate the fees sometimes. With Wealthfront’s easy-to-use platform, it’s not hard for complete beginners to set up their accounts and put their money on autopilot.

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).