Personal Capital Financial Planner...thoughts?

[Amyolin]

There have been countless discussions on whether or not it's worth it to have a financial planner, and I know that's a personal decision.  I just entertained a call from a planner from Personal capital.  I took PoF's advice and opened up a Personal Capital account a month ago and I have to say it is really nice to be able to see EVERYTHING in one spot.  I don't look at it every day but I know it's there to reference if I need it.

I consider myself a novice with regards to finances who is interested in learning more and hopeful that someday I can be savvy enough to feel confident that I am making the right decisions with my hard earned money.  Today is not that day.  I'm maximizing retirement, doing backdoor Roth, putting money into a taxable, saving cash, and doing most things right (minus the big doctor house and the remodels that go along with it).  I don't have a financial planner and have made recent financial decisions by reading WCI and PoF and asking questions on this forum.

So, the Personal Capital planner was nice enough.  He said they are 100% fiduciary, unbiased, and only use ETFs.  They use Pershing as their custodian and they charge a flat rate of 0.89% of AUM, with a minimum of 100K to start.  So that's only $890/year on 100K and that doesn't sound all that bad.  I asked the planner about his background and was surprised to hear that aside from being a college graduate he doesn't have any advanced degrees.  There is a CFP on staff but he has no special letters after his name (aside from the expected licenses).  Good?  Bad?  Does this matter?  Sure seems like it should.

As soon as he found out that most of my money was tied up in my 401K and DBP (and cash for a remodel) he realized I couldn't quite make the 100K cut (with my Roths, HSA, and taxable).  He immediately wanted to table the conversation for a later date, which I found to be a relief (since I'm biased against FPs in general) and also slightly off putting.  Anyway, does anyone reading this use Personal Capital for financial planning?  I'm debating if it'll be worth it in a few months when I move some cash into my taxable and have 100K in vehicles that they can manage.  They do TLH and probably many more things that I have a very basic understanding of and certainly don't feel comfortable doing on my own.

 

Would love some thoughts!

[Miss Bonnie MD]

Their fee + the ERs of the funds, so likely over 1% in the end. If just managing a portfolio prolly not worth it. And like many large firms they tend to hire "green" FAs who don't know much.

[Lithium]

IF you asked these guys what they provide over a Roboadvisor like Betterment to justify an extra $700+ a year I'd be very interested to hear what their answer would be. I suspect it's handholding, we'll protect you from market timing, etc, which to me would not be an impressive answer.

[Peds]

it costs me 0.06% to manage my accounts. so yours sounds terrible.

[Hatton]

I also track my stuff at personal capital. The software is nice.  I get a call every few months.  They quoted me 0.75 AUM which would be a chunk of change.  Another problem you would have is they want to sell all your stuff and incur large capital gains.  I manage my own stuff.  I have talked with CFPs at Vanguard.  If you open an account there you can get hand holding for 0.3 AUM.

[PhysicianOnFIRE]

I like Personal Capital for the investment tracking and portfolio breakdown -- the 9 box display of your asset allocation, fee analyzer, etc...

However, I do not use the advisory service. I did sit through the roughly 45 minute online presentation where they walk you through a recommended allocation, and show how they do equal weight for 10 sectors of the S&P 500 and rebalance, claiming alpha of >1% in backtesting, more than offsetting the fee. I'm not sold on the advantage of equal weight, and you can do that with an ETF that was recently discussed here with an expense ratio of 0.2%.

BTW, @hatton1 PC no longer called me after I listened to the presentation.

Keep reading and asking specific questions, and I think you'll be able to manage your portfolio just fine. If not, Vanguard can help you for a lower fee, but you're not going to get advice from them that you can't get here or on Bogleheads.

Best,

-PoF

 

[ajm184]

I know its legal, but I find it interesting that salespeople who call themselves 'Financial Planners' without a meaningful accreditation (CFP, CFA) in turn are one-trick ponies (investment advice), instead of the more holistic approach (Estate planning, goal/progress thereof, projections, etc) that at least to me is conveyed by the term 'Financial Planning'.

[62cutlass]

I used them briefly.

Unless something has changed, their whole deal is using individual stocks for the domestic portion of the portfolio. Because of this, there was very little in the way of additional fees. This created lots of buying and selling. They were unable to explain to me why they made changes or the effects of those changes.

Frankly, I think they were making thinks too complicated and I moved my accounts to Vanguard.

[RetiredERdoc]

Sure, $890, 1%, they don't sound like much. But as your accounts grow, this could add up to 590k.

 

To examine the effect of fees on a millennial investor, we looked at different investing scenarios for a 25-year-old who has $25,000 in a retirement account, adds $10,000 to the account every year, earns a 7% average annual return and plans to retire in 40 years.

In one of the scenarios analyzed, paying just 1% in fees would cost a millennial more than $590,000 in sacrificed returns over 40 years of saving.
A millennial with the option of investing in either of two commonly held funds can save nearly $215,000 in fees — and, through the magic of compounding, retire nearly $533,000 richer — by choosing the one with fees that are 0.93% lower.
By assembling a low-cost exchange-traded fund, or ETF, portfolio on his own and rebalancing it once a year, a millennial can retire $345,000 richer than if he uses a target-date mutual fund.

https://www.nerdwallet.com/blog/investing/millennial-retirement-fees-one-percent-half-million-savings-impact/

[Hank]

Those are estimated costs for someone earning significantly less than most WCI readers.  You're looking at a million dollars or more for a high earner with a relatively high savings rate who continues to work with "his guy" at Edward Jones or Raymond James.  Frankly, I'd rather have the extra $1M at the end of my working career.

If you need planning, don't be afraid to pay for it on a flat hourly basis from a good advisor.  If you need continued hand-holding after initially establishing your plan, then consider Vanguard's roboadvisor for 30 basis points or Schwab's Intelligent Portfolio.  (I don't like the cash drag with Schwab's roboadvisor, but it seems like the lesser of two evils compared to the price and costs for Personal Advisor's financial planner.)

[Luke]

Hi everyone, thanks for all the great info. I’m currently with PC and I’m thinking of switching to Schwab’s intelligent portfolio. Any thoughts on how useful the automatic TLH and portfolio rebalancing can be for the “price” of having 6% tied up in cash drag? Thanks for your help!

[ROC MD]

Hi everyone, thanks for all the great info. I’m currently with PC and I’m thinking of switching to Schwab’s intelligent portfolio. Any thoughts on how useful the automatic TLH and portfolio rebalancing can be for the “price” of having 6% tied up in cash drag? Thanks for your help!

I have money invested in several mutual funds in Schwab regular brokerage account (without a roboadvisor). I wanted to use the Schwab Intelligent Portfolio Premium service so that I could have unlimited access to a CFP for $30/month (after $300 initial fee). In order to use this service, however, I was told I would need to transfer the mutual funds into the Schwab ETF's. I think this price is very reasonable but have not decided yet whether I will keep the mutual funds or switch to the ETF's.

[jfoxcpacfp]

There have been countless discussions on whether or not it's worth it to have a financial planner, and I know that's a personal decision. I just entertained a call from a planner from Personal capital. I took PoF's advice and opened up a Personal Capital account a month ago and I have to say it is really nice to be able to see EVERYTHING in one spot. I don't look at it every day but I know it's there to reference if I need it.

I consider myself a novice with regards to finances who is interested in learning more and hopeful that someday I can be savvy enough to feel confident that I am making the right decisions with my hard earned money. Today is not that day. I'm maximizing retirement, doing backdoor Roth, putting money into a taxable, saving cash, and doing most things right (minus the big doctor house and the remodels that go along with it). I don't have a financial planner and have made recent financial decisions by reading WCI and PoF and asking questions on this forum.

So, the Personal Capital planner was nice enough. He said they are 100% fiduciary, unbiased, and only use ETFs. They use Pershing as their custodian and they charge a flat rate of 0.89% of AUM, with a minimum of 100K to start. So that's only $890/year on 100K and that doesn't sound all that bad. I asked the planner about his background and was surprised to hear that aside from being a college graduate he doesn't have any advanced degrees. There is a CFP on staff but he has no special letters after his name (aside from the expected licenses). Good? Bad? Does this matter? Sure seems like it should.

As soon as he found out that most of my money was tied up in my 401K and DBP (and cash for a remodel) he realized I couldn't quite make the 100K cut (with my Roths, HSA, and taxable). He immediately wanted to table the conversation for a later date, which I found to be a relief (since I'm biased against FPs in general) and also slightly off putting. Anyway, does anyone reading this use Personal Capital for financial planning? I'm debating if it'll be worth it in a few months when I move some cash into my taxable and have 100K in vehicles that they can manage. They do TLH and probably many more things that I have a very basic understanding of and certainly don't feel comfortable doing on my own.

 

Would love some thoughts!

Thoughts? Yes. Not a financial planner. Not even close.

[Lithium]

Zombie thread

[jfoxcpacfp]

Zombie thread

TU! I was paying absolutely no attn to dates until you posted that. DUHHHHHH...sorry. Wish an auto-alert would pop up lol.