I won’t be advertising for Personal Capital anymore, and I apologize for doing so.

I’m finally up to here with Personal Capital’s fear-driven marketing. As a former affiliate, I apologize for shilling for them.

In case you’re unfamiliar with PC, it’s a financial advisory company that runs an online personal finance tracker similar to Mint and Quicken. PC uses the account data you link to their system to generate sales leads from its family of services. I like the tracker and use it myself to manage the roughly $2.5 million aggregation of our assets and liabilities. However, it’s one of those “if the product is free, you’re the product” situations. You give PC your financial data so they can try to sell you products that “suit your needs.”

And to that point: now comes Jay Shah–PC’s CEO–with a cynical spin on the usual theme that Americans have unrealistic retirement expectations.

In an article entitled “Retirement reality: Many Americans will not be able to live out their dreams” as published by CNBC, he states that:

America is in the midst of a retirement crisis, and many people are in danger of not being able to live out their retirement dreams.

Which is spot-on, of course. One reason is:

…many investors [are] at risk of losing chunks of their savings to hidden fees and conflicts of interest from unscrupulous brokers — the very same people who Americans trust to help them achieve their retirement goals.

And he’s still right. Furthermore:

Sadly, 39 percent of millennials and 34 percent of Gen Xers have no retirement savings.

So given these problems, what’s the remedy?

First, Shah mentions in passing the maxing out tax-advantaged accounts. Great advice. Next he recommends becoming familiar with one’s financial structure and assessing long-term goals. Also great advice. But then–and not surprisingly for a financial services company–he extolls the prudence of hiring a financial advisor.

Good financial advisors can help you build out this comprehensive long-term plan and manage conflicting financial priorities. Not only will they help with planning, they’ll act as guides, helping you stay on track and manage unexpected roadblocks so you avoid emotionally driven decisions that can have an undesirable impact on your financial future.

There’s certainly no shame in selling somebody a service they’re unwilling/unable to perform for themselves. But this next quote is where Shah and I get crossed up:

When choosing an advisor, make sure you understand the fees you’re paying and how that person is being compensated.

I mean…sheesh. In one breath he’s telling you to make sure you’re not paying unnecessary fees, and in the next he’s trying to convince you to pay fees that may very well be unnecessary.

Puts me in mind of George Orwell, man. “Ignorance is Strength.” And I say that because understanding the advisory fees you’re paying by definition requires you to know whether you need to pay advisory fees AT ALL.

And as I said, you very likely don’t. Explanation to follow.

Another reason I don’t like this article is a pic in its sidebar. Benjamin Harrison—PC’s managing director and head of new business development—is quoted as saying:

The growth of Vanguard’s digital solution has largely been driven by their existing client base …Personal Capital’s growth has been truly organic.

Come on. Really? Who gives a flying rat’s ass whether Vanguard’s digital solution is customer-driven or organic?

I’ll tell you who: potential investors in Personal Capital. Venture capitalists and the IPO people at Morgan Stanley and suchlike. The proof is this: as a customer, give me a customer-driven digital solution any day of the week. PC’s growth model is literally irrelevant to me. So it’s straight-up disingenuous to use a quote like that in this article designed to grow sales.

From day one I’ve always known Personal Capital’s game was to sell people financial services. Again, there’s no shame in selling somebody a service they’re unwilling/unable to perform for themselves.

But here’s Shah cutting you so he can sell you stitches. You may not NEED stitches. What you definitely need is at least a modicum of financial self-knowledge and quite possibly a handful of low-fee mutual and/or exchange-traded funds…if that many. This is information you can acquire yourself off the web in one afternoon. You don’t need to pay PC an annual percentage of your assets for it.

I mean…check it out. If Harrison didn’t consider Vanguard–and by extension their low-fee funds–a major competitor, he wouldn’t be competing with Vanguard in his quote.

Sigh.

You know…articles like this fly thick and fast in the personal finance space, and it’s far from PC’s first one. Why did this particular one set me off?

I have no idea. Guilty conscience, maybe. Since I first started this blog I’ve earned…what, $2,500 in sales commissions from PC? Something like that, yeah. So I’m culpable, and for that I apologize. I’ve long since spent the $$$, but I won’t be chasing any more.

The other thing is: I have to give some thought to the auto-feed sidebar ads that I run. They’re cookie-driven, so I’m not sure I have any control over what you yourself see…but if you’re seeing ads that you think aren’t suited to your best interests, please let me know so I can bring the matter up with the company that pushes them.

And there you have it. By all means use Personal Capital’s online tracker–after twenty-five years of closely tracking my finances it’s the best one I’ve ever found–but don’t buy into their sales hype. To repeat: the odds are very good that you don’t need their services, or those of any other paid financial advisor. Assuming you’re a middle-class American you’ve got the tools right there on on your computer to evaluate whether that’s the case.

Go ye forth and do so.

Author: ER Dude

Sick of your job? After a thirteen-year career, Early Retirement Dude fled corporate America for good. You can do it too! Visit http://EarlyRetirementDude.com or email EarlyRetirementDude@gmail.com.

17 thoughts

  1. As you say, PC has an outstanding tool but I stopped using them last year when I could no longer live with the trade-off of giving my login information on all my accounts to a third party that (obviously) was using my data to market to me. Also, they called relentlessly (I know people say they stop if you talk to them once but I never wanted to even have the discussion). Don’t get me wrong, I don’t blame them; their model of producing a best-in-class financial tool and using it to attract and analyze potential customers is brilliant, I just don’t choose to participate anymore.

    Come to think of it, there was another reason: I was checking my net worth every day…not healthy. Now I keep a simple spreadsheet of balances by institution and update it monthly…OK I admit I cheat and update it at least three times a month but I’m getting better. I also do an asset allocation analysis about twice a year, which appears to be once too often. I miss the PC tool’s beautiful graphics but it doesn’t really matter for managing one’s money once you’re on track.

    p.s I’ve recently joined you in early retirement!

  2. >p.s I’ve recently joined you in early retirement!

    Stack!!! Wonderful news! As far as tracking your numbers…yeah, I’m still doing it just because it’s a convenient way to track my overall number and to verify my credit card transactions, but I’m definitely with you on not liking to give my financial data to third parties. Among other reasons, my dad always told me not to tell anybody how much I make. Did you get the same advice?

  3. Hey ER Dude!

    Hooray! Glad to read about your change of heart about Personal Capital.

    (It is easy to find many bloggers touting Personal Capital. It seems the lust for affiliate income has obscured the vision of many bloggers who normally seem clear-eyed about reality.)

    There is another major reason I steer clear of all the budgeting/net worth tracking/money management websites, PC included: SECURITY.

    All these websites say they are secure, and maybe they are, but it will take only ONE breach to expose all of a person’s financial info to hackers. Anyone who uses a website like that needs to be aware of the high-risk situation they are putting themselves into.

    I go in depth on this topic on my blog.

    Thanks for the post!

    1. >lust for affiliate income

      Understandable to want to earn money from your blog, and Personal Capital certainly does that for you. It’s $100 commission for a lead with assets in excess of $1,000,000, and $20 anytime somebody signs up through your link–millionaire or no. So it’s not an insignificant amount of income.

      Thanks for the link. Folks: please follow it and read the post.

  4. I’ve been wondering why there is so much porn on my iPad. Your auto-feed sidebar ads are obviously to blame. Mystery solved.

  5. Dude,
    Due to security, I don’t use third party such as PC. I have index funds with Vanguard and over the five years, I’ve notice that their web site has improved, especially the graphics. As for checking, I use USAA and they have a great tracking tool of all expenses, income etc so again, PC is not needed. However, I have an account with Wells Fargo and the transactions would need to be manually inputted and that would be especially painful especially if wait until tax time.

    Vanguard also allows you input information from another account so you can consolidate and this is what I use to track my TSP (military 401k).

    Oh, I’m anxiously waiting for your series on the 401k. When will you publish the next segment?

    Semper FI,
    Luis

    1. Hi, Luis…always good to here from the Devil Dogs…thanks for writing in.

      >Oh, I’m anxiously waiting for your series on the 401k. When will you publish the next segment?

      It’s about three-quarters in the can. Taking my time and being careful to get everything right.

  6. I think that’s a pretty harsh piece on a company that provides a great service for free. They’ve also done an excellent job managing one of my seven figure accounts and in providing tax and estate advice. And unlike you, they have never paid me a cent for promoting them. I’m just a satisfied customer.

    1. Hi, there…
      Yeah, I hear what you’re saying. The online tracker IS a great service, and the price is right. Sounds like you’ve got a more complicated financial situation than most people, and if they’re treating you like you want, it’s not my place to throw shade. My comments in this post are limited to cautioning people to do their homework and decide for themselves whether they need to pay for financial advice, rather than succumbing to fear-based marketing. Sounds like you’ve already gotten past that point, which is great. Thanks for the comment.

  7. After reading JD Roth’s excellent post leading to this one, I was excited and curious to know what nugget of wisdom you were going to share about PC that set you off.

    I’m still looking!

    I guess I don’t understand what set you off. You said:
    “There’s certainly no shame in selling somebody a service they’re unwilling/unable to perform for themselves.”. I agree. Mowing lawns, amputating pinkies, investing money. Do it yourself or choose to pay someone else to do it. Your choice.
    But when PC said: “When choosing an advisor, make sure you understand the fees you’re paying and how that person is being compensated.” you got upset. Now my head is spinning! I have to tell you, that PC quote should be verbatim law for all investors. You said he was trying to convince you to pay the fees that may very will be unnecessary. I think he’s simply saying to be aware of them. He even specified “when choosing an advisor”.

    If you’re going to get financial advice, you’re going to pay for it in some shape or form. And you agree getting financial advice is an OK choice, so I have to assume you agree it’s not only OK but a great idea to know how much you’re paying before you start?

    For the record, by their third call to me I told PC that if they called again I’d need to cancel out my account. I never heard from them again.

  8. Hey–glad to hear from you.

    >But when PC said: “When choosing an advisor, make sure you understand the fees you’re paying and how that person is being compensated.” you got upset.

    It wasn’t so much that particular statement as it was the chain of logic that led up to it. “Your results are possibly being sandbagged by financial advisors because of their fees” followed by “when choosing an advisor make sure you understand how much you’re paying” followed by “pay us.”

    My dander started rising–and I have a dander the size of a fire hydrant, by the way–when I thought about how if the average US-type investor who’s got something like $95K saved for retirement (quickly googled that just now), truly understood fee structures and the correct asset mix for their own particular situations, they’d likely gravitate to low-fee funds. And this is information they can glean from the web in a couple of lunch breaks.

    Yes, you’d still be paying Vanguard or whomever for advice, but you’re paying, like, 17 basis points instead of 200. Struck me as disingenuous, which led me to the obvious question, “Well why am I shilling for these people, then? Obviously it’s for the commission. Does that make me any less disingenuous? No. So let’s remove the commission motive.”

  9. “If you’re sitting at the table, and you don’t know who the sucker is….*you’re* the sucker”.

    I tried PC. I got extremely nervous about all that login info. I started doing an Excel spreadsheet….works just as well.

    1. > I started doing an Excel spreadsheet….works just as well.

      I’m glad to hear it. I ran Lotus/DOS and Excel/Windows and Excel/macOS sheets for something like twenty years, and by the end of it the sheer complexity gave me a subdural hematoma. And I’m no Excel slouch, either–most of the stuff was automated. Like I said, I’m glad it’s working for you. If you want to FIRE, spreadsheet skills are MANDATORY.

  10. Just discovered your site thanks to POF. I like what I see and love your writing style!
    I tried PC. Found it to be a little clunky (I’m very fussy about my graphs and info organization) and definitely didn’t like the sales push by email and phone call.
    Like some others, I was also concerned about the security of my entire financial world being posted there.
    Kudos to you for no longer being one of their hucksters.
    Anyone with a modicum of excel skills and a little determination can do a better job on their own. Plus digging in deep helps to really “own” and understand your finances.

    1. >love your writing style!

      That really made me smile. Thanks. I’ve worked very hard at it.

      >Anyone with a modicum of excel skills and a little determination can do a better job on their own. Plus digging in deep helps to really “own” and understand your finances.

      I agree, yeah…online trackers are all well and good, but when it comes to forecasting/modeling you have to keep your own counsel.

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