After two years of usage it’s finally time I do a unique review of Personal Capital from the perspective of an entrepreneur, an affiliate blogger, an equity shareholder and a fellow San Francisco resident. I’ve already highlighted in previous posts how I use Personal Capital to reduce portfolio fees and how to run various growth scenarios to better manage your 401(k) for retirement. Now I’d like to share with you some thoughts about the company after a two hour meeting I had with senior management.
If there’s one habit I’ve picked up working in finance since 1999, it’s the process of being as thorough as possible with every single financial related matter. One wrong move can be the difference between retiring comfortably on the beach before you’re 60, or working your tail off until the bitter end!
The main difference between Wall St. institutional investors and retail investors is access. If you’ve ever wondered where your higher fees for active fund management is going, part of it goes towards business trips to attend conferences, funding flights around the world to kick tires, and allowing analysts to meet with management wherever they may be. Index fund managers don’t have to do hardly any research except for how much to buy or sell to replicate an index to minimize tracking error.
I’ve literally sat in over 3000 one-one-one meetings with senior management of pre-IPO and publicly traded companies during my time on Wall St. Due to all the hours spent listening to some of the most critical minds asking questions, I cannot help but be critical in my analysis of my own personal investments and financial recommendations I make on Financial Samurai as well.
Why you should meet management one-on-one:
1) To observe the competence of management through the communication eloquence of their vision.
2) To observe body language that would indicate strength or weakness in the upcoming quarter or year.
3) To understand whether the CEO’s philosophies are consistent with the company’s stated philosophies and your own.
4) To see if the CEO, CFO, or COO are people you can trust with your grandmother’s hard earned savings.
5) To corroborate financial assumptions and things you hear on the street.
I’m very fortunate to live in San Francisco, the tech/internet hub of the world. So when Personal Capital invited me to drive down to Redwood City to have a chat with their CEO Bill Harris at HQ, I jumped at the chance.