As you’ll soon come to learn, there’s one really big difference separating FutureAdvisor and Personal Capital.
One is a pure robo-advisor and one is a platform offering a mix of DIY portfolio management + white-glove professional investment advice.
Which is which, what are their defining features, and are there any worthwhile alternatives?
Find the answers to all that you seek in this article.
FutureAdvisor vs. Personal Capital: What’s The Key Difference?
Keep reading for a high-level breakdown of FutureAdvisor vs. Personal Capital, notes on where they excel and where they fall short, and insights into alternatives such as Kubera — a unique personal balance sheet software for hands-on management of modern, diversified portfolios.
Meet Kubera: Complete Portfolio Management for the Modern Investor
First up, meet the new(er) kid on the block: Kubera.
Kubera is a personal balance sheet dashboard that enables investors to monitor and manage everything from tradition to alternative assets.
The team behind Kubera is global, modern, and diversified — just like the investors we serve who want to see all (and we mean all!) of the elements that contribute to their wealth.
The Upsides of Kubera
These are the features that set Kubera apart from the pack.
Track All Kinds of Asset Types
Kubera tracks an unprecedented number of asset and account types.
Fiat currency (from around the globe!), crypto and DeFi coins, traditional brokerage accounts, savings accounts, real estate, physical heirlooms and collectibles, and more — thanks to our always-growing integrations with thousands of financial institutions and spreadsheet-like interface you can track these and more all in one Kubera portfolio. (But you can still create multiple portfolios to fully customize the way you view your assets!)
Just add account credentials to Kubera to watch them update in real-time, and easily adjust those physical assets that don’t have an associated account (like that precious vase that’s been passed down through generations of your family).
Special Valuation Integrations Increase Accuracy
Kubera has partnered with Zillow, EstiBot, and a VIN number tracker. In addition, we’ve built custom stock and cryptocurrency trackers into the dashboard.
Together, these features enable you to get up-to-the-moment market value on some key investments, making your understanding of your investment portfolio even more accurate.
Automatically Find the Return on Your Investments
With just cash flow, price, value, and holding time, Kubera automatically finds IRR for investments for the assets in your portfolio.
And internal rate of return isn’t just displayed in your preferred currency, it’s also benchmarked against common indices so that you can better understand asset performance in the larger scheme of things.
IRR is a key measure of how your investments are paying off, and all the other information Kubera offers around IRR can help you make smart decisions on portfolio diversification and optimization.
Get a Recap View of Portfolio Performance
Kubera also shows asset performance over time, ensuring your financial goals and projections built upon this information are accurate.
How? With our Recap feature, where we crunch the numbers to give you an overview of daily, weekly, monthly, quarterly, and yearly changes in net worth and investable asset value.
Your Data is Protected
Kubera takes security and your privacy seriously. We only share the data we need to in order for our product to work, and we don’t use your information at all for marketing purposes.
The Few Downsides of Kubera
Just like any other investment management tool, Kubera isn’t perfect. Here’s what you need to know.
It’s Not Free (For Good Reason!)
Unfortunately we can’t offer Kubera for free, but that’s so that we don’t have to sell your data or upsell you on things you don’t really want or need. Still, we strive to keep pricing simple and affordable for our users.
No App — But Still Available on Mobile
Kubera doesn’t have a native mobile app, but you can always access us via the web or install our Chrome app, iPhone app, or Android app.
FutureAdvisor: A Direct Management Robo-Advisor
FutureAdvisor, owned by the investment giant Blackrock, Inc., is an SEC-registered investment advisor employing finance professionals, data scientists, and software developers according to their website.
The fiduciary — an organization that’s required to act in its client’s best interests — directly manages Traditional, Roth, and Rollover IRAs in addition to joint and individual taxable accounts.
And, it does it all automatically as a robo-advisor, or a financial planning algorithm.
Where FutureAdvisor Stands Out
Here are some key capabilities that make FutureAdvisor special among personal finance management platforms.
Interesting Investment Options
For a robo-advisor platform, FutureAdvisor works with some intriguing asset classes you don’t see all the time.
In addition to your classic broad-market U.S. and global stock options, FutureAdvisor also invests in global small-cap stock and value funds, domestic value and growth funds, domestic small-cap stock funds, and more.
Bonds include emerging markets, U.S. fixed income, and Treasury Inflation-Protected Securities.
Regular, Automated Portfolio Rebalancing
Thanks to its foundation on automation, with FutureAdvisor you can always be sure your portfolio is balanced.
FutureAdvisor promises about four to six rebalances per year on average. With each rebalance, they’ll take advantage of tax-loss harvesting opportunities; realign assets with your target allocation; and shift your investment horizon, risk tolerance, or investment profile as needed based on life circumstances.
Downsides of FutureAdvisor
Where could FutureAdvisor improve? Let’s discuss.
Strict Investment Model
Because of Partnerships with Fidelity Investments and TD Ameritrade, they will consolidate your accounts with one of these financial platforms.
In addition, securities and any other holdings that don’t align with their specific “investment models.” Resulting cash will then be put into low or no-commission exchange-traded funds (ETFs).
Little Ability to Override
Don’t love your robo-advisor selling off your holdings to align so closely with their own investment strategy?
That’s too bad, because FutureAdvisor is what’s known as a direct manager, meaning they have full authority to act on your behalf with your investments.
And, they don’t take too kindly to one-off overrides (that’s the downside of robo-advisors that don’t have independent thought).
What they offer instead is for investors to devote small portions of their portfolios to individual stock holdings that they want to hold onto.
Pricey for a Robo-Advisor
The minimum balance to use FutureAdvisor is $5,000 as of 2022, and their annual fee comes out to .50% of assets under management (AUM).
As you’ll see from our upcoming alternative offering, that’s a little on the high side for automated asset management.
Best FutureAdvisor Alternative: Betterment
Betterment is another robo-advisor and, according to them, “the largest independent online financial advisor.”
With Betterment, users can enjoy guided investing based on goals you set up, retirement planning, cash management, and even a checking account. Like FutureAdvisor, Betterment’s investment plan relies on low-cost ETFs.
Fees for Betterment range from .15% to .40% AUM depending on account balance, and users have the option to get a human finance pro involved.
Introducing Personal Capital: DIY and Pro Portfolio Management
Personal Capital was acquired by Empower Retirement in 2020 for dang near a billion bucks.
The platform is a full financial suite consisting of (free) DIY financial tools, a (no fee) checking account, and a portal that connects users with (paid!) wealth management professionals.
Where Personal Capital Excels
Personal Capital features that wow users include…
Robust Free Platform
As for free tools, Personal Capital is a DIY portfolio manager that allows users to add and track tons of traditional financial accounts — bank accounts, retirement accounts, investment accounts, etc.
In addition to their overview panel, Personal Capital’s tools include a net worth calculator, saving planner, cash flow viewer, budgeting dashboard, retirement and education savings planners, fee analyzer for identifying hidden charges you may be paying, and an investment checkup tool to keep an eye on asset allocation.
Various Options to Work With a Pro
An investor must have at least $100K in assets loaded into their Personal Capital account before they’re eligible to become a Private Client who receives personalized account management from dedicated, human financial advisors. Management fees at this level start at .89% AUM for the first million (as of 2022). Over 10 million, this fee drops to .49% AUM.
In addition, Personal Capital also offers what they call “online advisors” who are fiduciaries and operate on a fee-only payment plan, making them more affordable.
Limitations of Personal Capital
Balancing out the preceding upsides are these limitations around Personal Capital.
High Requirements and Fees for White-Glove Financial Advice
As you probably noticed, the minimum to get one-on-one advice from a Personal Capital financial planner is on the high side — as are the fees.
Pushy Sales Practices
Are the abundance of free features from Personal Capital too good to be true?
Possibly.
What we’ve learned is that they treat their free tier much like a marketing funnel. Once a new (free) user is in the door, that’s all their sales team needs to start endlessly upselling you on their paid services.
Lack of Privacy
As stated in their Privacy Policy, Personal Capital takes user data and uses it to market products and services from parent company Empower Retirement back to you.
If you don’t want to allow your data to be used to sell you things that aren’t even necessarily in your best financial interest, Personal Capital won’t be the best solution for you.
U.S. Focus
Personal Capital’s app can be used around the world, but it only works with financial institutions in the U.S., U.S. dollars, and U.S. phone numbers. World travelers with portfolios to match — beware.
Winning Personal Capital Alternative: Vanguard
Vanguard is a well-established investment advisor that offers one-on-one advisory services once investors have reached a $50,000 account minimum. Its fees at that point start at .30% AUM. While they employ a mix of robo-advisors and fiduciary financial advisors, the much lower fee makes it worth it.
Considering their size and long years of experience, Vanguard may prove to be a stellar alternative to Personal Capital for investors who don’t need the DIY dashboard elements.
Kubera is the Best Choice in Portfolio Management
Take an even deeper dive into how Kubera works to see why it’s the top choice in portfolio management for smart, diversified investors.
Sign up when you’re ready to get started with your new account — it only takes a few minutes.
You can even work with Kubera alongside your financial advisor or other wealth professional. All they have to do is add Kubera’s white-label solution to their client portal and you’ll be enjoying cutting-edge advisor services along with the rest of their clientele.
