Personal Capital vs Fidelit

Investing in stocks, bonds, mutual funds, and other assets provide investors an opportunity to tap into the financial market and reap the benefits. Many brokerage services have been launched to help investors maneuver the confusing and tricky financial market and trading. Better still, brokers have invested in technology and research in order to help their investors make informed decisions before they trade and invest in various assets.

Here we look at Personal Capital vs Fidelity to see what they have in store for the investors which one can work best for you.

Personal Capital provides access to financial advisors for the exchange of a management fee of 0.98 percent and above, and investment balance starts from $100,000.

While the fee that Personal Capital charges may be high, there are robust free tools to use.

Clients can access a team of advisors that help them with making wise decisions in their investment. Those who have $200,000 and above can get at least two dedicated advisors.

The fee depends on the balance you have, for instance, first 1million attracts a 0.89 percent fee while the balance of up to 3 million attracts a fee of 0.79 percent.

Fidelity is a well-known, well-rounded investment brokerage company that serves individual investors.

The company offers different tools, research, and resources to help the average Joe investor to make strategic decisions when investing. Fidelity offers a $0 commission for trades to the investors.

There are more than 3,700 mutual funds carrying a non-transaction fee. In addition, there are those investments that carry transaction fees. The brokerage is one of the companies that have high-class research tools to help the average, buy-and-hold investors.

Fidelity has a track record for managing investment with years of experience in the industry. It also has a platform that is easy to use and can be customized to help advanced investors make the most of their investment strategies.

Summary

·         Access to financial management tools with Personal Capital

·         Access financial advisors with Personal Capital

·         Higher that starts from $0.89 for investors in Personal Capital

·         Minimum balance of $100,000 is required for Personal Capital investors

·         The fee depends on the investment balance – the higher the balance the lower the fee in Personal Capital

·         Over 3,700 no transaction fee type of mutual funds with Fidelity

·         Extensive and free research as well as data with Fidelity

·         Access on iOS and Android for Fidelity investment

·         Trades securities like mutual funds, options, bonds, stocks, ETFs, and others in Fidelity

·         No account fees – closing, inactivity, transfer, or annual fees with Fidelity

·         Account minimum for Fidelity investors is $0

·         Fidelity stock trading costs investors $0

·         No base commission in Fidelity - $0.65 for a contract

Who is Personal Capital?

Personal Capital is a company that offers online financial advisory and combines the power of robo-advisor algorithms with the expertise of human advisors to help make wise investment decisions.

It requires a minimum investment dollar amount of $100,000 and an account balance of not less than $200,000 to have two financial advisors assigned to you. Those that have their balances below that only access to a team of advisors and may not have a personalized approach to advisory.

Personal Capital comes with a fee, which is considered higher compared to the peers. The fee starts from 0.89 percent and goes down as the account balances increase. The largest account balance, which is more than $10 million, is charged a fee of $0.49 percent.

The fees that Personal Capital charges come with a set of financial as well as investment planning tools. Some of the tools may be free to non-customers.

Also, the fee comes with the ability to link your existing accounts and be able to track spending, portfolio performance, net worth, retirement progress, and the accruing fees or the fees charged.

A retirement paycheck feature also helps investors plan their withdrawals when they reach retirement including tax-optimized funds-withdrawal strategies. You know that tax can hit hard your retirement investment and withdrawals of the investment, so you need to look for ways to minimize the taxes so that they don’t cripple down your investment.

How Personal Capital Works

The signup is pretty fast and you will provide information including address, name, telephone, email, social security number, date of birth, and other details.

When you are done with the registration, you link your bank account. Your investment cash is placed on your account.

Besides, you also link your other financial accounts including loans, mortgages, 401(k)s, IRAs, checking account, savings account, credit cards, and others. This allows you to view your net worth and have a holistic view of your financial situation. Here, you begin tracking and you create a budget and plan for retirement.

You track your investment using the dashboard features. Also, you start talking to an advisor to start planning with transparent, honest advice.

The advisors go over your spending habits, net worth, and investing strategies, or even life events and new investment goals. The financial advisor you deal with goes over your goals and comes up with a comprehensive strategy that you can utilize 100 percent free. From here, you can now start investing wisely and confidently.

Personal Capital Features

·         Investment Portfolio

Clients who have $100,000 to $200,000 dollar amount in assets are invested within a portfolio of exchange-traded funds. These traded funds attract a weighted-average-expense-ratio of 0.08 percent. These funds are also designed to allow efficiency in tax.

At the same time, clients who have an asset value of $200,000 to $1 million enjoy the above benefits in addition to the ability to tailor a portfolio that features ETFs and stocks.

Moreover, investors who have an asset value of $1 million and above receive all the said services in addition to being able to invest within individual bonds.

·         Smart Weighting

Personal Capital utilizes a personalized approach in selecting a portfolio for the investors. This approach takes a holistic view when it comes to the client’s financial picture. So it doesn’t just consider the assets it manages. The selection process for the portfolio allows the investors to invest equally in the entire sectors instead of mimicking indexes such as the S&P 500.

·         Investment Strategy

Through the Smart Weighting process in portfolio selection, the company is able to reduce risks in investments while also allowing for increased returns – all of which are a holy grail when it comes to investments.

With hypothetical backtests, the Personal Capital is able to see how it performs against the S&P 500, where often it outperforms this index. The hypothesis of backtesting also allows Personal Capital to find individual tax-loss harnessing opportunities.

Since the company uses individual securities, it is easier to target them and the indexes as needed.

·         Tools

Personal Capital offers different free tools as well as comprehensive tools such as investment checkup, spending tracker, and 401(k) fee analyzer. However, you need to create log in credentials so that you can utilize these tools.

Even those not enrolled in Personal Capital advisory service, they could still access these tools. When you have signed in, you can connect your bank account, credit card, and brokerage accounts.

The company will analyze the allocation of assets in your investment account depending on the information that it garners. This way, it is able to tell you exactly the amount you should increase and the amount you should decrease in your holdings of particular asset classes so that it aligns with its recommended target.

Again the do-it-yourself investors are able to utilize this advice so that they make their adjustment in portfolio investing.

·         Accounts Supported

Investing in Personal Capital supports different accounts including Roth, rollover, traditional, and SEP IRAs. It also supports nonretirement accounts and trusts. Besides, the investment supports cash accounts, which aren’t charged management fees.

While Personal Capital advises on 401(k) as well as the 529 plan allocations, it does not directly involve itself in the management of these accounts.

·         Tax Strategy

The company utilizes the tax-loss harnessing strategy on portfolios holding of ETFs and individual stocks. The retirement paycheck feature helps to recommend tax-optimized retirement-withdrawal strategies. This ensures that the investors protect their investment from tax levies that could eat a large chunk of their money.

Pros

·         Rich investment tools for analyzing your investment goals

·         Easy to set up with a step-by-step process

·         Professional human financial advisory

·         Marrying human advise with robo-advisor algorithms

·         Intuitive design and UI for easier interaction

Cons

·         High minimum for Wealth Management

·         Limited budgeting capabilities

·         Solicitation to upgrade to Wealth Management service

Who IS Fidelity

Fidelity is a brokerage investment company founded in 1946, one of the oldest brokerage companies in the industry. The company is always investing in technology and research to help provide a concrete platform for the average investor.

It commits itself to reduce investment costs among investors. You can invest with the company with a little amount, even $10 can do. So, it’s not like other investments where you have put in thousands of dollars in order to invest.

As an average investor, you can take advantage of the 16 base currencies it offers - one of the brokers with a wide range of base currencies.

Opening an account with Fidelity can take you about 1 to 3 days. If you are still undecided as to whether you should join Fidelity or not, you can consider the demo account to help you test the features of the platform.

While Fidelity supports the use of credit cards including the Fidelity Debit Card, the company also allows other methods of funds transfer including automatic deposits from the bank, direct deposit, and bank transfers.

Fidelity allows you to invest in both international and domestic stocks. There are over 30,000 different kinds of investment-grade bonds as well as fixed-income securities that you can tap in.

How Fidelity Works

When you want to invest with Fidelity, you are required to open an account. During the time of opening, you will be asked to fill in personal information that includes your address, name, phone number, email, social security number, date of birth, and other details.

After your account is opened, you choose the preferences and the features you want. For example, you can check that you want to receive your financial document in electronic form.

After you review and accept the terms and conditions, you can transfer money to your account. However, you can still use the demo version.

Fidelity Features

·         Stock Trades

With Fidelity, you can invest in online ETFs and stocks that cost an investor $0. However, if you will opt for broker-assisted trades, you will pay $32.95. There is no limit with your entire trade size or the pricing. If you trade stocks valued under $1, you will not incur extra fees.

·         Minimum Deposits

An investor should have $2,500 in order to be able to trade mutual funds, however, opening an account doesn’t require you to have a minimum deposit. You can have $0 in your account balance. For margin trading, an investor needs to have a minimum deposit to the tune of $5,000.

·         Optional Stocks

A contract for trading options costs you $0.65. And for assignments or any exercise, it is going to cost you $0. Fidelity is among the brokerages where you can trade different options.

·         Mutual Funds

As an investor with Fidelity, you have access to an excess of 13,000 varieties of mutual funds along with 3,700 mutual funds that don’t attract transactional fees (NFTs). With the non-fee transactions, you don’t pay anything for the sell or buys you make.

That said, if your fund manages to sell within 60 days after purchase, you would be charged a redemption fee amounting to $49.95. Typically, funds trades cost $0 for a sale and $49.95 for a buy trade.

The trades you execute via a broker are pretty costly and will cost you almost 75 percent of your principal amount. A minimum balance of $100 to $250 is needed for broker-assisted trades.

·         Portfolio Analysis

Using the FullView tool in the platform allows an investor to pull other accounts that are not within the Fidelity platform to allow for analysis. The investor can check the other accounts, analyze them and see their stand in terms of assets and liquidity. You can also give access to the FullView analysis to your financial or investment advisor.

Pros

·         Solid research tools

·         Strong customer support

·         Commission-free stocks, options, and ETFs

·         Asset screeners

·         Expense-ratio-free index funs

·         Both international and local stocks traded

·         Uninvested money swept back to the market fund

Cons

·         Not eligible for non-US residents

·         No commodities or even options on futures

·         High broker-assisted fees

·         High account financing rates

·         High mutual fund fees

Wrap Up

Looking at Fidelity and Personal Capital, you may find that they are like opposites. Fidelity is designed for the average Joe, the investor who buys and holds. It has low minimum balance requirements. However, Fidelity has extensive tools and research information helpful to investors.

Personal Capital is a high-end investment platform where investors need to have a minimum of $100,000 to invest in their portfolio.

However, with Personal Capital, as the name suggests, you can use individual human advisor that helps you in your investment planning and strategizing.

Working with human advisors along with the robo-advisor algorithm provides a more comprehensive, reliable investment strategy to help with investment decisions. So, depending on your financial situation as well as the kind of expertise you want to get from the financial experts, you can choose Personal Capital or Fidelity.