Personal Capital FA

[Target59]

I signed up for Personal Capital's app to track my assets. A very nice man called letting me know he can make me incredibly wealthy for the low, low price of .89% of my assets paid annually whether they do worth a hoot or not. It all sounded "fabulous"", which I noticed can be shortened to spell FA BS.

Their basic pitch was that I should spread my equities equally across 10 sectors of the economy. According to him, the standard index funds are too weighted in technology and financials.

I'm a DIYer, so I'm not interested in paying for advice. But their concept was interesting and I played around with a Vanguard ETF portfolio of their 11 sectors weighted equally. My backtesting estimate is that the spread yielded 7.8% for 10 years (vs VTI at 8.5%) and 13.7% for 5 years (vs VTI at 15.6%). It's hard to beat an index! Any thoughts on whether there's a significant reduction in risk for the spread portfolio?

 

[frayne]

Everybody has a better mouse trap. It's just a helluva lot easier and cheaper to build your own.

 

[OldShooter]

They wouldn't be pitching that idea if it didn't backtest well. They would find some other idea that backtested well and then would pitch that. Maybe a market prediction algorithm based on high historical market correlation with the price of salt in Madagascar and the tonnage of coal shipped from Australia to China.

I buy the whole world, so I don't have to guess which sectors and weightings to buy. There will always be lucky monkeys who beat me in the short term but very few who beat me over the long term. I am content with that.

 

[bobandsherry]

I went through same song and dance from personal Capital. The conversation turned once I suggested they were essentially just creating another index of sorts. Then once I showed him that just putting money in plain old S&P fund outperfomed their returns and that they did no better during market downturns and they'd charge me almost 1% for that "service", well the conversation really ended with a polite no thanks.

 

[VanWinkle]

Everyone's got to make a living. I have a personal capital account also and politely said no to their sales pitch. They were also polite and still give me the free tracking service.

 

[travelover]

Just step back and consider that anyone who knows how to beat the markets doesn't need to spend their days begging people to sign up for their services.

 

[frayne]

Just step back and consider that anyone who knows how to beat the markets doesn't need to spend their days begging people to sign up for their services.

+1 in spades and from tee to green.

 

[unclemick]

I signed up for Personal Capital's app to track my assets. A very nice man called letting me know he can make me incredibly wealthy for the low, low price of .89% of my assets paid annually whether they do worth a hoot or not. It all sounded "fabulous"", which I noticed can be shortened to spell FA BS.

Their basic pitch was that I should spread my equities equally across 10 sectors of the economy. According to him, the standard index funds are too weighted in technology and financials.

I'm a DIYer, so I'm not interested in paying for advice. But their concept was interesting and I played around with a Vanguard ETF portfolio of their 11 sectors weighted equally. My backtesting estimate is that the spread yielded 7.8% for 10 years (vs VTI at 8.5%) and 13.7% for 5 years (vs VTI at 15.6%). It's hard to beat an index! Any thoughts on whether there's a significant reduction in risk for the spread portfolio?

Hmmm - 1966 outa college I was sold/signed up with Dean Witter complete with a broker. Nice guy. Young like me. Circa 1976/77 I bought 'Bogle's Folly' in my 401k. Kept the broker til his Daughter went thru college. Bought a 'huge' variety of things over time including rental RE and pssst Wellesley.

Your mileage may vary but I after 23 years in ER my portfolio, 2017, is ballpark 95% plus 50/50 stock index/bond index. Hindsight says I had a few winners in the past but nothing to overwhelm index.

They make great party conversation though. Especially the patented Gold mine in Colorado. Index is boring - and short.

heh heh heh -

P.S. I may sign up with Vanguard for a FA to tell us how to spend faster(another thread) since we are post 70 1/2 and not getting any younger.

 

[Mo Money]

Just step back and consider that anyone who knows how to beat the markets doesn't need to spend their days begging people to sign up for their services.

Frayne beat me to it, but I will do it +1000 and all 18 holes.

When I ER'ed, I rolled over my company's 401K into an IRA that I control. While at my company, I was forced to use a particular FA, who charged just under 1%. I calculated that after the rollover, my annual savings in FA fees would pay my for all of my health insurance and a moderately priced trip to Europe for two people, every year. Even with increased healthcare costs, that calc remains accurate. They are just salesmen/women who took an FA course and got a Series 7 license ...

 

[FUEGO]

I got pretty wealthy paying Vanguard 0.0x% for some passive index funds. YMMV of course.

 

[flintnational]

Another problem with back tested performance is that they have picked the winners to pitch to clients. History has shown that hot sectors revert to the mean at some point. A better strategy might be to buy the sectors that have under performed. But that is harder to sell. I avoid the noise and stick with my index funds.

 

[Ready]

I entered an incorrect phone number, so they haven't been able to reach me. I do get the pop up ads from time to time for their services, and I notice that since I signed up for the software, my personal advisor has turned over three times now.

But I do find their software very useful for tracking all of our accounts on a single screen.

 

[Walt34]

Maybe a market prediction algorithm based on high historical market correlation with the price of salt in Madagascar and the tonnage of coal shipped from Australia to China

Hey, just waitaminnute here.

I thought it was butter production in Bangladesh! Now you've gone and made it all complicated.

 

[pn3069]

I wonder what % of personal capital users are their customers utilizing their FA services?

Most people I know simply take advantage of their online tools.

The cynical me worries that I leave so much of my information in their/yodlee's hands without paying them a single red cent... and what could might happen with that info?

 

[bobandsherry]

I tried out PA, got a nearly daily phone sales call. After trying out the service I decided it really wasn't for me, and neither was their sales pitch.

 

[OldShooter]

... The cynical me worries that I leave so much of my information in their/yodlee's hands without paying them a single red cent... and what could might happen with that info?

Well, there's the old rule: If you're on a web site and can't figure out what the product is, the product is you.

There is no web site, anywhere, that has an accurate and complete picture of my portfolio. On the occasions where I have entered data it is either partial or, very rarely, the investment positions are divided by ten. This has worked so far to keep me off the hucksters' radar. I haven't had a prospecting call in years.

 

[MRG]

Well, there's the old rule: If you're on a web site and can't figure out what the product is, the product is you.

Snip.

+1
Never heard that before. Very true!

 

[Tallman4123]

I've used Personal Capital for budgeting and investment tracking purposes (the "free" products) since 2014. It's been a great tool for me and I'm on the website almost daily. I still receive calls and voicemails about once per month from them asking me to speak with their FA. When I see a call from San Fran or Denver (I think) I just let it go to voicemail and they leave a pleasant message asking me to call back. I suppose someday I should just answer the phone and have the conversation, but so far I haven't had the stomach for it.

 

[CoolRich59]

Well, there's the old rule: If you're on a web site and can't figure out what the product is, the product is you.

One of my favorite quotes.

I really like this one too:

"If you're not at the table, you're on the menu."

 

[Another Reader]

The picture of the FA assigned to me is of a guy in his early 30's with greased back hair. He claims over six years of investment experience. Should be over seven now, unless they aren't counting the time working for PC. Well, I have 40 years of investment experience. Thanks, but I don't think I need financial advice from this fellow.

 

[Souschef]

The picture of the FA assigned to me is of a guy in his early 30's with greased back hair. He claims over six years of investment experience. Should be over seven now, unless they aren't counting the time working for PC. Well, I have 40 years of investment experience. Thanks, but I don't think I need financial advice from this fellow.

That reminds of my late Dad. He lived in a FL condo and was made himself an expert on condo law. The board introduced their new young lawyer, and my Dad said,"I was reading condo law when you were in high school"

 

[Another Reader]

Trust me, this guy didn't go to law school...or any other school that would give him the right to include some initials after his last name. His credentials aren't listed beyond the six years of investment experience.

 

[stlguy57]

I blocked the San Francisco the FA's seemed always to call from. I continue to use the asset tracking service. It's very good for free.

 

[Ready]

I blocked the San Francisco the FA's seemed always to call from. I continue to use the asset tracking service. It's very good for free.

From what I've heard if they connect with you once and you make it clear you have no interest they leave you alone. It might be worth a brief conversation just to get it out of the way.

 

[karen1972]

Hmmm, I didn't get to the selling part, a nice man called and offered "FREE Hands-On Training, just set up a time" he was worried maybe there was something wrong with my setup and was reaching out to "help me". I guess he was hoping I had a few more million hidden away somewhere... anyway I did not need training and was sorry I signed up as the last thing I need is a sales pitch.