Personal Capital, the original original hybrid digital wealth manager, announced its succession plan and promoted Jay Shah as the company’s chief executive officer and nominated him as a member of the board of directors. Shah was most recently COO of Personal Capital, with two-thirds of the company’s employees reporting to him. Bill Harris will continue full-time as chairman, advising Shah.
“I’ve worked with Jay since the early days of the company seven years ago, and I couldn’t be more pleased to see him take on the role of CEO,” said Harris. “In that time, he has occupied roles of successively increased responsibility and has always delivered. During a period of hyper-growth, Jay has infused the firm with operational rigor and lead some of our most important growth initiatives.”
“I’m taking this post at an exciting time – the company’s assets under management have doubled in the last year and just crossed $4.2 billion,” said Shah. “Every day, our teams of engineers, advisors and staff members come to work to fulfill our vision – to revolutionize how financial advice is delivered. It’s an honor to lead this team.”
Shah said the move will allow Harris to focus on what he enjoys most — evangelizing Personal Capital and its approach to the outside world while looking for new areas to innovate.
“That’s where Bill finds the most joy,” Shah said. “When it comes to operational rigor, scale, process and doing this vastly across what is now a pretty complex enterprise — Bill is plenty capable of doing this, but it’s not what he enjoys the most. It’s what I enjoy.”
Personal Capital’s state of the art personal finance software enables real time financial visibility and management for 1.3 million registered users. The company manages roughly $7.5 billion of investment capital on behalf of its clients, and average assets managed per client have recently grown from $300,000 to over $350,000. Additionally, 38% of the firm’s assets are now in relationships of $1 million or more.
“Jay Shah has been an instrumental part of Personal Capital’s management team since the first years of the company,” said Steve Harrick of IVP, an early board member. “He is an exceptional leader with deep expertise in both financial services and information technology. I am excited that he will be guiding Personal Capital and working to revolutionize the wealth management industry for the better.”
Shah has 20 years of experience in the technology industry, including four years as chief information officer at E-LOAN.
Thoughts On The CEO Transition
I consulted for 25-35 hours a week at Personal Capital for two years in their marketing department from 2014 – 2016. Further, Financial Samurai has been an affiliate partner since 2012. I’m not aware of any other personal finance writer with more insights.
I’ve always found Jay to be a very level-headed, and personable person who takes the time to get to know you and understand what’s on your mind. When you’re running a company, you need to be measured, calm, and collected. Jay is all of those things, and I believe he will do very well as the CEO, especially since he’s been with the firm since the beginning as their COO.
With Bill as the full-time Chairman, he can continue to act as the Ambassador to the firm as the co-founder. Being an Ambassador means speaking to existing investors, raising new capital, and doing interviews with the press, among other things. This combination works perfectly with Jay as the hands on CEO who is in the office 40+ hours a week.
Personal Capital Business Progress
It’s clear that the digital wealth advisor (robo-advisor) industry is transitioning from algorithm only advice to algorithm + human advice. This is where Personal Capital shines because they started out as a hybrid digital wealth advisor in 2011.
The key for Personal Capital will be to continue growing assets under management at a rapid pace to cover operating expenses. They raised $75M from various investors back in 2016, so they are probably set for a long time. As Personal Capital marches towards $10B AUM, their challenge is to keep costs growth relatively fixed and take advantage of business leverage.
In the meantime, they continue to refine their award winning free financial tools so that anybody can track their net worth, manage their cash flow, analyze their investments, and calculate their retirement needs. Their free app is a key lead generator for their target audience of those investors with $100,000 or more in investable assets.
I recently had lunch with Mark Goines, Vice Chairman and Eric Weiss, Chief Marketing Officer in San Francisco to get an update about their operations as of 2H2018. Personal Capital has grown to over 300 employees with a new office in Atlanta, Georgia. Now with roughly $7.5 billion in client assets under management they are tracking over $150 billion in assets from users who use their free financial app.
I highly recommend everybody sign up for Personal Capital’s free financial tools to track their net worth, analyze their investments, and plan their retirement cash flow. The firm is clearly doing well and will be around for a long time to come. You don’t have to be a client if you don’t want to. I’ve been using their app since 2012 and have seen my net worth soar partly due to the bull market, but also due to financial optimization and better risk management.
Highlight Features Of Their Free Tools
1) Retirement Planner. This tool helps you to know if you’re on track to retire, and even allows you to make adjustments for major life changes, such as job/career/income changes, illness, childbirth or saving for college.
2) 401(k) Fund Allocation. Even though Personal Capital can’t manage your employer sponsored retirement plan, they can analyze the plan and make asset allocation suggestions based on all of the investment options available in the plan.
3) Net Worth Tracker. Track your assets and liabilities so that you can quickly find your net worth at any time. This tool will help you to really know if you’re on track to reach your long-term financial goals.
4) Cash Flow Analyzer. Use this tool to create a budget, where you can track your income and expenses whatever the sources. This will help you see where you’re spending money, so that you can free up income for savings, investing, and debt payoff.
5) Investment Checkup. This tool can provide a risk assessment of your portfolio, including your retirement plan. It will make suggestions to help you improve your asset allocation plan to make it consistent with your goals and personal preferences.
Leverage the internet and take advantage of their free financial tools to better manage your net worth. I’ve used Personal Capital to track my finances since 2012 and have seen my net worth skyrocket as a result. What you can measure, you can optimize!