Personal Capital - Phone Discussion

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FootballFan5548
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Personal Capital - Phone Discussion

Post by FootballFan5548 » Wed May 31, 2017 2:40 pm

I've read some people on here use Personal Capital as the dashboard to track all investments. I've been doing that for a few months and it's been a great tool, I'm very happy with it and it certainly makes life easier to track net worth, total portfolio performance and allocation across platforms.

I just got off the phone with a very nice personal capital investment rep. He was professional, patient with my questions, and seemed to have a very good plan in place. He had a very thorough and detailed presentation, which was better put together than any of the other investment people I've talked to over the years.

He wasn't pushing too hard as a salesman, but of course he did mention the .89% annual fee they charge for assets under management.

I know the Boglehead mentality is to avoid advisors like the plague, but I wanted to ask if anyone here has had an experience using personal capital advisors and if they would recommend them going forward. I plan to keep using the dashboard either way.

For scale - it would be roughly $500k in after tax (brokerage) amount.

Thanks so much.

Gufomel
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Re: Personal Capital - Phone Discussion

Post by Gufomel » Wed May 31, 2017 2:48 pm

What value will they give you to justify the .89% fee?

pierremonfrere
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Re: Personal Capital - Phone Discussion

Post by pierremonfrere » Wed May 31, 2017 2:49 pm

Did anything they mention in their presentation seem like it was worth $4,450 per year?
Do you think you are capable of managing that money yourself?

I don't think they would add enough value to make it worth it.

Topic Author
FootballFan5548
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Re: Personal Capital - Phone Discussion

Post by FootballFan5548 » Wed May 31, 2017 2:51 pm

It seems to be a full service advisor... tax planning, asset allocation weighted and sector weightings that are automatically rebalanced. access to alternative investments and low cost ETF's i might not be able to get currently. Also insurance advise and others.

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CAsage
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Re: Personal Capital - Phone Discussion

Post by CAsage » Wed May 31, 2017 3:13 pm

What is the 30 year impact of $500,000 earning .89% less than it could/would every year, which is the 'drag' that they would have on that money? Answer: Assuming 4.11% instead of 5% average earnings: $487,018.

$500,000.00 4.11% $1,673,954
$500,000.00 5.00% $2,160,971

Note that many studies show managed accounts unable to defeat that headwind over many years. Just a thought. Your prior posts suggest you have insurance covered, and you might be better off hiring a CPA or tax pro to manage that aspect.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

adamthesmythe
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Re: Personal Capital - Phone Discussion

Post by adamthesmythe » Wed May 31, 2017 3:53 pm

> access to alternative investments

And would that be a positive or a negative thing?

mhalley
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Re: Personal Capital - Phone Discussion

Post by mhalley » Wed May 31, 2017 4:30 pm

Bogle heads frown on expenses, but most feel that if you rely need an advisor, the fees need to be pretty darn low, such as vanguard's .3%. I don't know if there is a hard and fast rule, but I will throw out a cutoff of .5%, including fund ERs.
This allows for vanguard, various robos, fidelity go, etc

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whaleknives
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Re: Personal Capital - Phone Discussion

Post by whaleknives » Wed May 31, 2017 4:39 pm

Personal Capital says they "Optimize risk & return on your behalf. We do this through our smart portfolio management strategy and Dynamic Tactical Weighting approach, which incorporates Modern Portfolio Theory and equal sector/size weighting."

Here's a fairly recent thread on equal weighting indexes: viewtopic.php?t=183459
"I'm an indexer. I own the market. And I'm happy." (John Bogle, "BusinessWeek", 8/17/07) ☕ Maritime signal flag W - Whiskey: "I require medical assistance."

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Ice-9
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Re: Personal Capital - Phone Discussion

Post by Ice-9 » Wed May 31, 2017 4:49 pm

I am a big fan of the Personal Capital software, and understand perfectly that the price for using it is to receive a phone call from them quickly asking if their services are needed maybe once or twice a year.

My answer is always that I enjoyed that original hour phone presentation with my assigned "advisor" and think their plan is really cool, but I'm a total DIY investor who enjoys managing a portfolio of index funds myself. I usually add that I've mentioned their services to my wife as an option if something ever happens to me, as she does not enjoy managing investments like I do.

What I don't tell them is that I've also mentioned a few other options to my wife, and she's expressed more interest in simply putting everything in Target Retirement funds if something were to happen to me. Smart wife I have. :happy

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munemaker
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Re: Personal Capital - Phone Discussion

Post by munemaker » Wed May 31, 2017 4:57 pm

Ice-9 wrote:...I've also mentioned a few other options to my wife, and she's expressed more interest in simply putting everything in Target Retirement funds if something were to happen to me.
Would that include the taxable, tax deferred and tax free accounts?

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Ice-9
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Re: Personal Capital - Phone Discussion

Post by Ice-9 » Wed May 31, 2017 5:15 pm

munemaker wrote:
Ice-9 wrote:...I've also mentioned a few other options to my wife, and she's expressed more interest in simply putting everything in Target Retirement funds if something were to happen to me.
Would that include the taxable, tax deferred and tax free accounts?
Almost everything is tax-deferred or tax-free. The only taxable we have these days is at Treasury Direct, so that concern is moot for us. But, if I had significant taxable investments, I'd probably recommend a slightly more complex solution for her, with some broad stock index funds in taxable and an appropriate amount of Total Bond Market in tax-deferred to reach her desired allocation. But again, that's moot for us presently. Target Retirement funds would serve her well.

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Bogle_Feet
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Re: Personal Capital - Phone Discussion

Post by Bogle_Feet » Wed May 31, 2017 5:28 pm

FootballFan5548 wrote:He wasn't pushing too hard as a salesman, but of course he did mention the .89% annual fee they charge for assets under management.
And you fell for his passive aggressive approach to sales.
Did he mention that 0.89% will cost you 8.6% after 10 years? That it will cost you 16.5% after 20 years? And 23.7% after 30 years?
Did he mention that deep discount brokers like E Trade who have ZERO fees and have dashboards and tools to track performance, total performance, allocation, etc. I'm sure AmeriTrade does too.
Did he mention that if you really want someone to hold your hand then you can go with an E Trade or Vanguard advisor for 0.3% per year.
access to alternative investments
Red flag. Sounds like annuities, non-traded REITS, limited partnerships, IUL, WL, promissory notes, ponzi schemes, etc.
"Optimize risk & return on your behalf. We do this through our smart portfolio management strategy and Dynamic Tactical Weighting approach, which incorporates Modern Portfolio Theory and equal sector/size weighting."
AKA making investing seem complicated in order to justify you paying them .89% per year. Investing is simple. Pick a total bond and a total stock index fund.

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munemaker
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Re: Personal Capital - Phone Discussion

Post by munemaker » Wed May 31, 2017 5:39 pm

Since I am recently retired with time on my hands, I did the call with Personal Capital.

With a slight simplification, I am currently 50% in Total Stock Market, 40% in Total Bond Market and 10% in cash (bank accounts).

I don't agree with all their statements and recommendations, but this is what they proposed:

PC recommended taking the 90% that is invested and investing (approximately) as follows: 35% in domestic stocks, 15% in international stocks, 5% in international bonds, 35% in domestic bonds, 10% alternatives.

The alternatives were split between real estate and commodities: 35% US real estate, 15% international real estate, 27% gold, 14% energy, 6% food, 4% metals.

PC would use 120 individual stocks for the US equity portion of the target portfolio and ETFs for everything else.

Aside from the more limited diversification, they were critical of my current portfolio:
- ETFs are better than my mutual funds due to: more tax efficient, more liquid, more transparent
- My sectors are market weighted, which results in an overly large percentage in tech and financials. They use more level weighting by sector. They claim this will produce an extra 1% annual return on the equity portion.
- PC will use tax loss harvesting. They think it is better to do this during the year, not just at year end.
- PC will do a better job of rebalancing and keep emotions out of all decisions.

Interestingly, their own analysis (on the dashboard) shows my current portfolio has generally outperformed PC's target portfolio over most time periods in the past. PC's own projection shows my current portfolio will outperform their target portfolio in the future with a median market and slightly underperform their target portfolio in a down (10 percentile) market. It wasn't clear whether their projections had their fees deducted (I am thinking it did not, but not sure). In any case, their projections were not very supportive of their approach.

No annuities, insurance products or ponzi schemes mentioned.

That's what I can remember.

I think PC would be good for someone who owned a business, made some money, cashed out and had no experience/interest in investing. Had zero appeal to me.

mhalley
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Re: Personal Capital - Phone Discussion

Post by mhalley » Wed May 31, 2017 6:00 pm

PC can claim that they will outperform, but how can they prove it? At least a mutual fund will have a track record and you can see, yes, they outperformed the s&p for the last 3,5,10 years. Who knows how well those 120 stocks have performed? Is there a record of their stock trades you can look up? I doubt it.

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munemaker
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Re: Personal Capital - Phone Discussion

Post by munemaker » Wed May 31, 2017 8:56 pm

mhalley wrote:PC can claim that they will outperform, but how can they prove it? At least a mutual fund will have a track record and you can see, yes, they outperformed the s&p for the last 3,5,10 years. Who knows how well those 120 stocks have performed? Is there a record of their stock trades you can look up? I doubt it.
They really did not claim their portfolio would outperform; while they did not state it, their own projections showed my portfolio would do better under median market conditions. They did say that their US stock segment should perform 1% better than total market because the various segments are not weighted by market capitalization; basis for that claim is unknown, and I guess that is your point.

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SpringMan
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Re: Personal Capital - Phone Discussion

Post by SpringMan » Wed May 31, 2017 9:15 pm

Any Boglehead that wants alternative investments can have them with DBC (commodities) and VNQ (REITs). I asked them what they used for alternatives. Save your .89% IMO.
Best Wishes, SpringMan

student
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Re: Personal Capital - Phone Discussion

Post by student » Wed May 31, 2017 10:35 pm

I don't know whether this is a red flag but I check the advisor that they have assigned to me at https://brokercheck.finra.org/ The advisor is no longer registered with them.

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Nate79
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Re: Personal Capital - Phone Discussion

Post by Nate79 » Thu Jun 01, 2017 12:03 am

Sounds like Edward Jones's slightly cheaper but just as stupid cousin.

mhalley
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Re: Personal Capital - Phone Discussion

Post by mhalley » Thu Jun 01, 2017 12:18 am

You are correct, they do not claim to outperform, so my bad for assuming they do. But If pc won't outperform, what is the point of giving them .89%? The stuff they claim to do is ok, but hardly worth .89%. Maybe if they charged vanguards .3%, but you can't pay 2 financials advisors with that low a fee. Since the performance is listed as net of fees, if their fees were lower they would outperform.
I just searched their webpage, and it turns out they do post some performance numbers. Their performance compared to their benchmark underperformed in Most of their asset allocation benchmarks since inception in 2012.
https://www.personalcapital.com/wealth- ... erformance
Performance since inception:
Aggressive:
Pc:12.2%
Comparative Benchmark 11.9%
Growth:
Pc:10.7%
Comparative Benchmark 10.6%
Moderate:
Pc: 8.0
Benchmark: 8.2
Balanced:
Pc: 6.5
Benchmark: 6.8
Conservative:
PC:5.3
Benchmark:5.8

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munemaker
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Re: Personal Capital - Phone Discussion

Post by munemaker » Thu Jun 01, 2017 6:37 am

mhalley wrote:... If pc won't outperform, what is the point of giving them .89%?
Clearly PC's service is not for people like us (Bogleheads). It is for people who don't want to deal with investing. The fee varies with the amount of your invested assets. At my level, I was considered a "Private Client" and offered a fee of 0.79%. The fee goes lower as your assets increase. Even if their fee was 0.00%, I would not be using them. I like to drive, thank you.

Personal Capital's approach is sound and I would disagree with characterizing PC as "stupid." They offer excellent diversification, perhaps to a fault; but who knows what the future may hold? That diversification into international bonds, REITs, food & metal commodities might come in handy some day. I know we can do that on our own, but I have no intention of doing so. I think it will be a drag on investment results, and their own data shows that. I would have thought all their diversification would lead to a lower standard deviation, but it does not seem to.

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munemaker
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Re: Personal Capital - Phone Discussion

Post by munemaker » Thu Jun 01, 2017 6:50 am

student wrote:I don't know whether this is a red flag but I check the advisor that they have assigned to me at https://brokercheck.finra.org/ The advisor is no longer registered with them.
Same with the adviser who was assigned to solicit business from me. This is not a red flag. They are advisers, not brokers. PC employees are registered with the Securities & Exchange Commission as advisers. You can type in the adviser's name to confirm at https://www.adviserinfo.sec.gov/IAPD/default.aspx .
Last edited by munemaker on Thu Jun 01, 2017 6:58 am, edited 1 time in total.

student
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Re: Personal Capital - Phone Discussion

Post by student » Thu Jun 01, 2017 6:57 am

munemaker wrote:
student wrote:I don't know whether this is a red flag but I check the advisor that they have assigned to me at https://brokercheck.finra.org/ The advisor is no longer registered with them.
Same with the advisor who was assigned to solicit business from me. This is not a red flag. They are advisors, not brokers. Their employees are registered as advisors, not as brokers.
Thanks for the info. I guess it surprises me because the advisors that I have talked to at TIAA and Merrill Edge are registered with them. My expectation also comes from http://www.finra.org/investors/investment-advisers

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munemaker
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Re: Personal Capital - Phone Discussion

Post by munemaker » Thu Jun 01, 2017 6:59 am

student wrote:
munemaker wrote:
student wrote:I don't know whether this is a red flag but I check the advisor that they have assigned to me at https://brokercheck.finra.org/ The advisor is no longer registered with them.
Same with the advisor who was assigned to solicit business from me. This is not a red flag. They are advisors, not brokers. Their employees are registered as advisors, not as brokers.
Thanks for the info. I guess it surprises me because the advisors that I have talked to at TIAA and Merrill Edge are registered with them. My expectation also comes from http://www.finra.org/investors/investment-advisers
Check https://www.adviserinfo.sec.gov/IAPD/default.aspx

student
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Re: Personal Capital - Phone Discussion

Post by student » Thu Jun 01, 2017 7:10 am

munemaker wrote:
student wrote:
munemaker wrote:
student wrote:I don't know whether this is a red flag but I check the advisor that they have assigned to me at https://brokercheck.finra.org/ The advisor is no longer registered with them.
Same with the advisor who was assigned to solicit business from me. This is not a red flag. They are advisors, not brokers. Their employees are registered as advisors, not as brokers.
Thanks for the info. I guess it surprises me because the advisors that I have talked to at TIAA and Merrill Edge are registered with them. My expectation also comes from http://www.finra.org/investors/investment-advisers
Check https://www.adviserinfo.sec.gov/IAPD/default.aspx
Thanks. The advisor does have registration on this list.

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BolderBoy
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Re: Personal Capital - Phone Discussion

Post by BolderBoy » Thu Jun 01, 2017 8:21 am

munemaker wrote:Aside from the more limited diversification, they were critical of my current portfolio:
- ETFs are better than my mutual funds due to: more tax efficient, more liquid, more transparent
More liquid? Rubbish! From numerous posts on the forum there is a "settlement period" to get your cash from selling ETFs.

I sell my mutual fund today and have the cash tomorrow.

Be skeptical of anything they tell you going forward.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

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munemaker
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Re: Personal Capital - Phone Discussion

Post by munemaker » Thu Jun 01, 2017 12:21 pm

BolderBoy wrote:
munemaker wrote:Aside from the more limited diversification, they were critical of my current portfolio:
- ETFs are better than my mutual funds due to: more tax efficient, more liquid, more transparent
More liquid? Rubbish! From numerous posts on the forum there is a "settlement period" to get your cash from selling ETFs.

I sell my mutual fund today and have the cash tomorrow.

Be skeptical of anything they tell you going forward.
Boulder Boy - I was skeptical of what they told me from the beginning. I made it clear in my post that I did not buy what they were saying.

Regarding liquidity, they were referring to the fact that ETFs trade like a stock, where funds trade only once per day. So what? Other than rebalancing, I pretty much hold these for decades.

They also said ETFs are more tax efficient. I say...perhaps more tax efficient than managed mutual funds, but not more so than index mutual funds.

They also said ETFs are more transparent, because you can see all their holdings where you can only see the top investments of a mutual fund. I say so what? If you own the market, do you really care about every individual holding?

They did not say, but I say...mutual funds are priced at the value of their holdings. ETFs can trade above or below the market value of its holdings. To me, that is a strike against ETFs.

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FootballFan5548
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Re: Personal Capital - Phone Discussion

Post by FootballFan5548 » Fri Jun 02, 2017 11:47 am

Do any Boggleheads buy Gold ETF's or Vanguard precious metal's funds?

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unclescrooge
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Re: Personal Capital - Phone Discussion

Post by unclescrooge » Sat Jun 03, 2017 12:34 am

SpringMan wrote:Any Boglehead that wants alternative investments can have them with DBC (commodities) and VNQ (REITs). I asked them what they used for alternatives. Save your .89% IMO.
DBC generates k1's at tax time. Easier to use an ETN instead.

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unclescrooge
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Re: Personal Capital - Phone Discussion

Post by unclescrooge » Sat Jun 03, 2017 12:35 am

FootballFan5548 wrote:Do any Boggleheads buy Gold ETF's or Vanguard precious metal's funds?
Yes.
Gold and gold miners ETFs.

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Re: Personal Capital - Phone Discussion

Post by Tbeller80 » Tue Jun 06, 2017 4:28 pm

mhalley wrote:You are correct, they do not claim to outperform, so my bad for assuming they do. But If pc won't outperform, what is the point of giving them .89%? The stuff they claim to do is ok, but hardly worth .89%. Maybe if they charged vanguards .3%, but you can't pay 2 financials advisors with that low a fee. Since the performance is listed as net of fees, if their fees were lower they would outperform.
I just searched their webpage, and it turns out they do post some performance numbers. Their performance compared to their benchmark underperformed in Most of their asset allocation benchmarks since inception in 2012.
https://www.personalcapital.com/wealth- ... erformance
Performance since inception:
Aggressive:
Pc:12.2%
Comparative Benchmark 11.9%
Growth:
Pc:10.7%
Comparative Benchmark 10.6%
Moderate:
Pc: 8.0
Benchmark: 8.2
Balanced:
Pc: 6.5
Benchmark: 6.8
Conservative:
PC:5.3
Benchmark:5.8
I've gone through the same sales pitch and their free software says my TSP/Vanguard AA is within a margin of error of what they think it should be and has and will outperform what they could do for me; however, they claim I'm taking on more risk that their voodoo can fix. Their company literature (as you said they've only been around 5 years) claims to outperform the market by 1% in a back-test going to 1990. Even if everything they claim is true, they're saying they'll earn you a whopping .12% above the market after fees. The guy I talked to said the reason they're worth it is they would protect more of your portfolio with their hypothetical AA from a downturn. Of course they've only been around a few years so this claim has never been tested in real time and as others have shown here is an expense bet to make.

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Re: Personal Capital - Phone Discussion

Post by csm » Fri Jul 07, 2017 3:02 am

I've been using Personal Capital for about a year or so and very much like the Dashboard for an overview of my entire financial position, as well as the Allocation tool to see my AA across multiple accounts. I also frequent the Retirement Planner and input different scenarios regarding spending in retirement, major income and expense plans (sell a home, vehicle purchase, possible future purchase of a different home, etc.). Very useful tools, really appreciate them.

I have always clicked 'no' to the offer for a consultation with an advisor, and ignored the emails offering this. I do not know if they have ever tried to phone me because I'm temporarily living abroad and do not have access to my U.S. phone number that is listed in my profile (but did not see any apparent calls the last time I was in the U.S. and used the U.S. sim card).

Recently, each time I access the Retirement Planner, I'm faced with a message that says that "my" personal advisor has reviewed my plan and providing a link to set up a private consultation. There is a second link, stating, "No, I know I'm on the right track." So each time, I click the "No" link and then proceed with viewing the Retirement Planner. I find it annoying if, in fact, someone really has personally been looking at my plan, but I guess that's the price to pay for entering data in a free service.

However, it has now gotten worse. Today, after clicking "No, I know I'm on the right track," the screen automatically refreshes and takes me back to the Dashboard, i.e. it will not allow me to stay within my Retirement Planner and use it if I refuse the consultation.

Has anyone else experienced this with the inability to continue to use the Retirement Planner if unwilling to schedule a private consultation? I recognize that the service is free and they are trying to earn money, but I would rather they have a subscription model where I pay a few dollars to access the tools of the site rather than the constant harrassment to speak to a salesman.

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munemaker
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Re: Personal Capital - Phone Discussion

Post by munemaker » Fri Jul 07, 2017 8:47 am

csm wrote: Today, after clicking "No, I know I'm on the right track," the screen automatically refreshes and takes me back to the Dashboard, i.e. it will not allow me to stay within my Retirement Planner and use it if I refuse the consultation.

Has anyone else experienced this with the inability to continue to use the Retirement Planner if unwilling to schedule a private consultation? I recognize that the service is free and they are trying to earn money, but I would rather they have a subscription model where I pay a few dollars to access the tools of the site rather than the constant harrassment to speak to a salesman.
I never had this happen prior to agreeing to the meeting. I suspect they are doing this because they cannot reach you at the phone number you entered. They do have some flunky call me from time to time asking if they can help me. I just say no and that is the end of it.

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Re: Personal Capital - Phone Discussion

Post by dia » Fri Jul 07, 2017 9:57 pm

I appreciate the free use of software but Everything comes with a price. I also question my decision to lay out my portfolio in cyberspace with a company I have no relationship with. I've never personally communicated with a person there but do get voicemails and email. Every time I hear from them I tell myself the right thing to do is delete my account since I have no intention of becoming a client. Until then, I sure hope their security is stellar. If that exists.
What, Me Worry? --Alfred E. Neuman

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munemaker
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Re: Personal Capital - Phone Discussion

Post by munemaker » Fri Jul 07, 2017 10:02 pm

unclescrooge wrote:
FootballFan5548 wrote:Do any Boggleheads buy Gold ETF's or Vanguard precious metal's funds?
Yes.
Gold and gold miners ETFs.
Huh?

student
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Re: Personal Capital - Phone Discussion

Post by student » Sat Jul 08, 2017 6:08 am

csm wrote:I've been using Personal Capital for about a year or so and very much like the Dashboard for an overview of my entire financial position, as well as the Allocation tool to see my AA across multiple accounts. I also frequent the Retirement Planner and input different scenarios regarding spending in retirement, major income and expense plans (sell a home, vehicle purchase, possible future purchase of a different home, etc.). Very useful tools, really appreciate them.

I have always clicked 'no' to the offer for a consultation with an advisor, and ignored the emails offering this. I do not know if they have ever tried to phone me because I'm temporarily living abroad and do not have access to my U.S. phone number that is listed in my profile (but did not see any apparent calls the last time I was in the U.S. and used the U.S. sim card).

Recently, each time I access the Retirement Planner, I'm faced with a message that says that "my" personal advisor has reviewed my plan and providing a link to set up a private consultation. There is a second link, stating, "No, I know I'm on the right track." So each time, I click the "No" link and then proceed with viewing the Retirement Planner. I find it annoying if, in fact, someone really has personally been looking at my plan, but I guess that's the price to pay for entering data in a free service.

However, it has now gotten worse. Today, after clicking "No, I know I'm on the right track," the screen automatically refreshes and takes me back to the Dashboard, i.e. it will not allow me to stay within my Retirement Planner and use it if I refuse the consultation.

Has anyone else experienced this with the inability to continue to use the Retirement Planner if unwilling to schedule a private consultation? I recognize that the service is free and they are trying to earn money, but I would rather they have a subscription model where I pay a few dollars to access the tools of the site rather than the constant harrassment to speak to a salesman.
I have not encountered the problem.

student
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Re: Personal Capital - Phone Discussion

Post by student » Sat Jul 08, 2017 6:11 am

dia wrote:I appreciate the free use of software but Everything comes with a price. I also question my decision to lay out my portfolio in cyberspace with a company I have no relationship with. I've never personally communicated with a person there but do get voicemails and email. Every time I hear from them I tell myself the right thing to do is delete my account since I have no intention of becoming a client. Until then, I sure hope their security is stellar. If that exists.
I have the same concerns. What I am doing is to use an email address that I seldom use, I enter the portfolio information manually rather than have it linked to my accounts.

Edit: If you scale your portfolio to $10,000, they probably won't call you.

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unclescrooge
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Re: Personal Capital - Phone Discussion

Post by unclescrooge » Sun Jul 09, 2017 1:45 am

munemaker wrote:
unclescrooge wrote:
FootballFan5548 wrote:Do any Boggleheads buy Gold ETF's or Vanguard precious metal's funds?
Yes.
Gold and gold miners ETFs.
Huh?
Huh!

txranger
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Re: Personal Capital - Phone Discussion

Post by txranger » Sun Jul 09, 2017 9:17 am

They have a good app. Problem is they r expensive. Keep it real cheap and simple and write yo self a check for 0.8% of yo portfolio every year. It's a lot of beer dude. :sharebeer :moneybag :moneybag :moneybag

I find it a bit annoying they keep tabulating yo portfolio fees and neglect to mention the added cost the d charge that would dwarf it.

I pay about 0.13%. That includes a ton of vwelx. Now picture paying 1%. It's a lot of cash money over the years. More importantly it's a cple yrs off yo retirement prob. Can't buy the time back chief. :moneybag :dollar

David Scubadiver
Posts: 522
Joined: Thu Mar 24, 2016 8:40 am

Re: Personal Capital - Phone Discussion

Post by David Scubadiver » Mon Jul 24, 2017 2:27 pm

The bulk of their pitch seems to be that they are equally weighted and tactically weighted, rather than weighted by market capitalization. Their portfolios invest in 75-100 investments rather than buying the entire market (which they claim may cause people to buy into bubbles, or at least buy more of expensive stocks than less expensive stocks)

Of course, while being weighted toward mega caps (if you buy VTI, for example) may in fact mean you are buying more of the biggest companies, there may be less risk involved than owning more of the small caps -- which may explain, in part, why their model portfolios (equal weighted) outperform similar market-cap portfolios.

David Scubadiver
Posts: 522
Joined: Thu Mar 24, 2016 8:40 am

Re: Personal Capital - Phone Discussion

Post by David Scubadiver » Mon Jul 24, 2017 4:08 pm

Tbeller80 wrote:
mhalley wrote:You are correct, they do not claim to outperform, so my bad for assuming they do. But If pc won't outperform, what is the point of giving them .89%? The stuff they claim to do is ok, but hardly worth .89%. Maybe if they charged vanguards .3%, but you can't pay 2 financials advisors with that low a fee. Since the performance is listed as net of fees, if their fees were lower they would outperform.
I just searched their webpage, and it turns out they do post some performance numbers. Their performance compared to their benchmark underperformed in Most of their asset allocation benchmarks since inception in 2012.
https://www.personalcapital.com/wealth- ... erformance
Performance since inception:
Aggressive:
Pc:12.2%
Comparative Benchmark 11.9%
Growth:
Pc:10.7%
Comparative Benchmark 10.6%
Moderate:
Pc: 8.0
Benchmark: 8.2
Balanced:
Pc: 6.5
Benchmark: 6.8
Conservative:
PC:5.3
Benchmark:5.8
I've gone through the same sales pitch and their free software says my TSP/Vanguard AA is within a margin of error of what they think it should be and has and will outperform what they could do for me; however, they claim I'm taking on more risk that their voodoo can fix. Their company literature (as you said they've only been around 5 years) claims to outperform the market by 1% in a back-test going to 1990. Even if everything they claim is true, they're saying they'll earn you a whopping .12% above the market after fees. The guy I talked to said the reason they're worth it is they would protect more of your portfolio with their hypothetical AA from a downturn. Of course they've only been around a few years so this claim has never been tested in real time and as others have shown here is an expense bet to make.
So, that number changes over time and currently they have outperformed most of the benchmarks. But, the devil is in the details, because they state: "The respective blended benchmark allocations, individual strategy assignment, and associated rebalancing are characteristics of a professionally managed portfolio. As such, a hypothetical quarterly fee of 0.2075% was deducted from all comparative benchmark returns except those used for Tactical America which is a single asset class." If that means that they've deducted .83% every year from those portfolios, that would mean they underperform the benchmark by quite a bit for those who are not paying .83% a year currently.

Edited: I was advised that "Both returns are shown net of fees. What this states is that the Comparative Benchmarks are shown net of a hypothetical annual fee of .83%, while the Personal Capital Composite Strategies are shown net of an annual (actual) fee of .89%. So over 5 years, the Benchmarks would be up 4.15% additional while the Personal Capital Strategies would be up an additional 4.45% if fees were not deducted from the stated returns."

So that seems to tell me that if I go with the "benchmarks" but manage my own account, the performance shown should be bumped up 4.15% over the five year term, which puts the performance at better than the personal capital composite strategies portfolio, which means that I am certainly paying more for poorer predicted performance.

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