Info on Personal Capital Advisors

[prof12]

Hello Everyone--

I recently joined this group and I am blown away by the knowledge and honesty I find here. So I am asking for your honest help and opinions on a San Francisco based firm called Personal Capital Advisors. They appear to be a fee-only operation and l like that they are not in favor of annuities or that they push their own products for commission. I am currently with Edward Jones and I am not completely unhappy--but I think they make too much money from me that I could better be using. PCA claims to offer a yearly fee of .95%

Here is part of their sales brochure:
Personal Capital Advisors was created by proven leaders in the Investment
and Technology fields. Our mission is to help our clients live a better financial life. Our advantage lies in combining decades of human experience with the precision and capabilities of the latest technology. We remain independent with no ties to large financial firms pushing antiquated, high-fee products. We carefully constructed our investment service from scratch. We took the best parts of what is offered elsewhere, threw out the bad, and added new innovation. We understand trying to pick the next hot stock or jumping in and out of the market hurts more often than it helps. Therefore, we started with an indexing approach, but have developed several ways to improve on traditional
passive strategies. Our methodology is centered on eight principles. Together, they are designed to provide you the following benefits: Focus on Your Goals, Increase Your Return, Reduce Risk and Save You Money.

Since this is the 4th anniversary of the Madoff scam, I am more cautious than ever. So any advice or facts would be much appreciated.
Prof12

[urn2bfree]

It depends on the size of your portfolio, but 0.95% to index seems too high to me. Portfolio Solutions charges only 0.25%, and Cardiff and Evanson charge a flat rate not a % of assets based on how much time it takes, and comes out often well under 0.2%... So that is my two cents.

[racy]

Or do it yourself. Go to the Bogleheads.org forum and they'll give you free advice in their Help with Personal Investments section. Be sure to use their suggested format for Asking Portfolio Questions. They'll advise you to get low cost Vanguard index funds; with Admiral shares your cost will be around .10% depending on the specific fund.

[MichaelB]

Hi prof12, welcome aboard.

If you don't feel comfortable managing your retirement portfolio assets you should hire an asset manager to do that. Still, O.95% is expensive and will eat up a fair part of your expected future returns. Urn2bfree named a couple of portfolio managers that charge considerably less and have a good reputation around here. Hopefully members here will give you other leads as well. Remember, one of the few things you can do as an investor is keep your investment expenses as low as possible.

[MBAustin]

+1 on the Bogleheads recommendation.

You might also find a fee-only planner to develop a financial plan including asset allocation for you that you could implement at Vanguard, Fidelity, or Schwab. There are several threads on here about doing that.

And if your assets are sufficient, Vanguard (and probably others) will do a no-charge basic plan for you.

Although I am very comfortable managing our portfolio, DH would not be if something happened to me and our kids are still too inexperienced financially to burden them with it. So we have a nominal amount with a local independent planner we like and trust who charges us 1% and for that we get his advice when we need it as well as a two-hour "check-in" every year. If something happens to me, he knows our situation and has agreed to advise DH on an hourly basis on the rest of the portfolio (which I am working to simplify over time). Just an example to show that there are different ways of using advisors.

[gerntz]

Quote:

Originally Posted by urn2bfree It depends on the size of your portfolio, but 0.95% to index seems too high to me. Portfolio Solutions charges only 0.25%, and Cardiff and Evanson charge a flat rate not a % of assets based on how much time it takes, and comes out often well under 0.2%... So that is my two cents.

+1 for these three also.

[golfnut]

Keep in mind that a suggested withdrawal rate when retiring is anywhere from 3% to 4% of the portfolio amount . The .95% fee is close to 25%/33% of these withdrawal amounts.

Just saying...

[hlfo718]

Keep in mind 0.95% is only the advisor's cut. If he/she puts you in funds/ETFs you will need to pay the mgmt fee for the funds as well as trading costs within the funds or commission for ETFs.

Any idea how they manage other people's money? Do they use ETFs, index funds, passively managed funds, or active funds? You should also ask them if they use only a strategic asset allocation or do they also employ tactical allocation as well. I think is a waste of time and money to use tactical but that's just me.

[FIREd]

After doing some online research on Personal Capital Advisors, I came back with very little. Their website promises a lot, yet it remains unclear how they manage their clients' money. I would stay away personally.

[Gill]

Quote:

Originally Posted by FIREd After doing some online research on Personal Capital Advisors, I came back with very little. Their website promises a lot, yet it remains unclear how they manage their clients' money. I would stay away personally.

I completely agree. This came to my attention a few weeks ago and my preliminary investigation led me to conclude it was a scam. It appears they want all your account information including passwords. I'd avoid this like the plague.
Bruce

[jazz4cash]

Quote:

Originally Posted by prof12 Hello Everyone-- .....They appear to be a fee-only operation and l like that they are not in favor of annuities or that they push their own products for commission. I am currently with Edward Jones and I am not completely unhappy--but I think they make too much money from me that I could better be using. PCA claims to offer a yearly fee of .95% Prof12

This is not my understanding of how a fee-only planner works. I thought the fee was based on the number of hours required to analyze a portfolio which may not correlate to the size of the portfolio.

[prof12]

I want to thank each of you for responding. You have pretty well reinforced what my gut was telling me: be careful at best and it is a scam at worst. Yes, this company wants copies of all my financial records to help them build a proper portfolio and budget for me and my DW. (Warning bells and tighening of the tummy--and lower). I think I will look at a couple of your recommended planners and also contact Vanguard about Admiral shares in Wellington and Wellesley. This is a great board and a great group of people. Now that I am retired, I intend to post often.
Prof12

[ERD50]

Quote:

Originally Posted by prof12 Yes, this company wants copies of all my financial records to help them build a proper portfolio and budget for me and my DW. Prof12

No, they want copies of all your financial records to help them understand how much they can get their hands on.

-ERD50

[Sarah in SC]

To be fair, any financial planner is going to need to see what you own now in order to evaluate it. But that could be just a list of mutual find symbols and the percentage of your total if you didn't want to provide statements. It certainly shouldn't be access to passwords!

[frayne]

Quote:

Originally Posted by ERD50 No, they want copies of all your financial records to help them understand how much they can get their hands on. -ERD50

Bingo, give that man a cigar.

[travelover]

Quote:

Originally Posted by prof12 contact Vanguard about Admiral shares in Wellington and Wellesley. Prof12

Welcome. You can do a heck of a lot worse than a split between these two funds. Or Target Retirement Income Fund.

One caution is that if you have a significant amount of your portfolio in an after tax account, it pays to keep bonds in the pretax accounts (401(k) / IRA, with stocks (equities) in the after tax account. This strategy is for tax efficiency.

[ERD50]

Quote:

Originally Posted by ERD50 No, they want copies of all your financial records to help them understand how much they can get their hands on. -ERD50

Quote:

Originally Posted by Sarah in SC To be fair, any financial planner is going to need to see what you own now in order to evaluate it.

That's true Sarah - a good planner will need to know what you have in total to determine overall AA and such. But I'll stand by my statement as also being true


-ERD50

[Texas Proud]

Quote:

Originally Posted by jazz4cash This is not my understanding of how a fee-only planner works. I thought the fee was based on the number of hours required to analyze a portfolio which may not correlate to the size of the portfolio.

+ a BIG 1 on this...


I would not call anybody who charges a % of your portfolio as a fee-only planner.... the whole idea of a fee only advisor is you are paying them for their time... not as a % of your portfolio

[Sarah in SC]

Quote:

Originally Posted by ERD50 That's true Sarah - a good planner will need to know what you have in total to determine overall AA and such. But I'll stand by my statement as also being true -ERD50

And I will agree!

[prof12]

Again, my heartfelt thanks to everyone who responded.

I emailed the man who spoke with me (their vice president which makes me feel so honored) and said that I have decided not to work with them. He immediately replied back ( I feel so special that I am so important I took center stage in his busy life) and wanted to know why I chose not to go with them after all they had to offer; as well as what he and his company could do to improve. He was more professional than I thought, and more aggressive than was professionally necessary.