The best hybrid robo-advisor is Personal Capital because there’s really only one hybrid robo-advisor today. From its founding in 2008, Personal Capital always believed in the hybrid approach of digital algorithmic investing with financial advisors.
Why do people pay up for an Apple laptop when they can buy a generic PC for 50% cheaper? The main reasons are: brand, ecosystem, ease of use, and service. I’ve owned Mac laptops for 10 years because I want to know that if something ever goes wrong, I’ve got someone to call or a someone to meet at the Genius Bar close by. Having the peace of mind to be able to fix something that I can’t fix is worth a ton.
When it comes to your finances, having a human to provide some guidance is also worth a lot. Going the pure robo-advisor way to help invest your savings is better than not investing at all over the long run. But if you are like most people, who have more than just an investment portfolio to worry about, going the hybrid robo-advisor way with both human and digital advisors managing your money may be the best way to go, despite the higher fee, which is still lower than traditional advisors.
Personal Capital, is the pioneer in offering hybrid-robo advisory service since its founding in 2009. Personal Capital offers the best user experience on the hybrid side because they’ve been able to work with thousands of people already to make sure they get the best customized advice possible. I used to consult from them between 2013 – 2016 and intimately know their people and product.
What Is A Robo-Advisor?
A robo-advisor (robo-adviser) is an online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners. Robo-advisors (or robo-advisers) use the same software as traditional advisors, but usually only offer portfolio management and do not get involved in more personal aspects of wealth management, such as taxes and retirement or estate planning.
Robo-advisors are typically low-cost, have low account minimums, and attract younger investors who are more comfortable doing things online. The biggest difference is the distribution channel: previously, investors would have to go through a human financial advisor to get the kind of portfolio management services robo-advisors now offer, and those services would be bundled with additional services.
Best Hybrid Robo-Advisor (Human + Digital): Personal Capital
The best hybrid robo-advisor is Personal Capital. Here’s an overview of the company followed by the latest news and their current offerings.
- Management Fee: 0.49% – 0.89%
- Account Minimum: $25,000 starting in 2017 (from $100,000 in the past)
- Promotion: Free financial tools to allow you to manage your net worth for free.
- Open a Personal Capital account for free.
Total Equity Funding: $215.3M in 8 Rounds from 12 Investors. Acquired by Empower in 2020 for $850 million.
Headquarters: Redwood City, California with offices in Denver and San Francisco
Description: Personal Capital is the leading digital wealth management firm.
Founders: Bill Harris, Louie Gasparini, Rob Foregger
Categories: Financial Services, Wealth Management, Finance, FinTech
Personal Capital Management
The best hybrid robo-advisor has also the best management with the most experience.
Bill Harris is now solely Chairman, while Jay Shah got promoted to CEO on April 24, 2017. Mike Arnsby was added as CFO in 2016. Mike helped take Yodlee public in 2015.
Personal Capital Funding History
Personal Capital has had eight rounds of funding, totaling $215.3M. Again, acquired in 2020 for $850 million. Bill Harris walked away with about $80 million.
Personal Capital Latest News
I had lunch with Mark Goines, Vice Chairman and Eric Weiss, Chief Marketing Officer in San Francisco to get an update about their operations. Personal Capital has grown to over 400 employees with a new office in Atlanta, Georgia. They also run roughly $13 billion in client assets under management, while tracking over $900 billion in assets from users who use their free financial app.
I highly recommend everybody sign up 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.
* Surge in assets under management. The noteworthy $13 billion in assets under management as of 2021 is up from $5 billion in 2017. And up from just $2 billion at the start of 2016. In other words, their asset gathering has accelerated for those who utilize Personal Capital to manage their money.
* Key personnel hires. Personal Capital hired Mike Armbsy, ex CFO of Yodlee to be their new CFO. Mike was responsible for helping Yodlee go IPO in 2014. In addition to Mike, Personal Capital welcomed Paul Desmarais of Power Financial Corporation to their Board of Directors. Paul is intimately familiar with Personal Capital as he helped lead Power Financial’s $75 million investment in their Series E financing.
* Lower minimum. For those who want to use Personal Capital to manage their money, you used to need at least $100,000 in investable assets to become a client. Personal Capital has now lowered the minimum asset hurdle to $25,000. This is great news for the millions of people out there who need low cost digital financial advice with the guidance of a human advisor.
Five Free Personal Capital Features
The best hybrid robo-advisor also has great free financial tools!
Unlike any other hybrid robo-advisor, Personal Capital offers free financial tools over a laptop, desktop, or mobile app to allow you to easily manage and grow your net worth. Their award winning app has been meticulously customized to meet all the main needs of today’s financial freedom seeker. I’ve personally used the free app since 2012 and have seen my net worth sky rocket.
Here are some of the key features of their free financial 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 Calculator. 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 tool. This 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.
Use The Best Hybrid Robo-Advisor To Manage Your Wealth
Personal Capital is the best hybrid robo-advisor today due to its history, experienced management team, and multi-product offering. I’ve used their free tools to manage my finances since 2012 and have seen my net worth grow to all time highs as a result.
Click here to start using their free financial tools before deciding whether they are the right company to manage your money. Always go with the best!
Other Top Robo Advisors
In addition to Personal Capital, here are the other top robo advisors:
- Charles Schwab
About the Author: Sam began investing his own money ever since he opened an online brokerage account online in 1995. Sam loved investing so much that he decided to make a career out of investing by spending the next 13 years after college working at Goldman Sachs and Credit Suisse Group. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate.
In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $300,000 a year in passive income. He spends time playing tennis, hanging out with family, consulting for leading fintech companies, and writing online to help others achieve financial freedom sooner, rather than later.
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