Author Topic: Personal Capital Premium Service  (Read 2690 times)

capitalninja

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Personal Capital Premium Service
« on: July 20, 2017, 11:50:39 AM »
Has anyone here used their premium service offering? I'm having a difficult time finding any reviews online on it so figured I would ask here.

Thoughts?

Allen

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Re: Personal Capital Premium Service
« Reply #1 on: October 06, 2017, 09:14:52 AM »
Came to ask/post the same thing but searched first.  Their sales pitch is good, arguing that equal sector weighting with robo re-balancing reduces volatility.  Their backtest period they show is only till 1990 because "that's when sector data is available".

I have a real hard time paying them .89% for the privilege but I'm interested to hear more.  None of our trinity study FI/RE gospel is based on this strategy. 

VoteCthulu

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Re: Personal Capital Premium Service
« Reply #2 on: October 10, 2017, 04:25:48 PM »
Few people on this forum want to pay for any active management (be that robo, human, or magic 8-ball). Most of us just want the benchmark returns at the lowest price.

Rocketman

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Re: Personal Capital Premium Service
« Reply #3 on: October 12, 2017, 02:03:53 PM »
I will admit that I use their service and I like it. I do think it is worth it for me - but just barely.

The things I like are they helped me pick funds for all three of my other accounts 401k 403b and HSA.

Stock loss harvesting is really nice. So far (3 yrs) I have not paid taxes on dividends and been able to deduct 3k a year of losses while my portfolio has grown great in the market.

The fee for me is abt $115 a month.


Rollin

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Re: Personal Capital Premium Service
« Reply #4 on: October 12, 2017, 07:24:03 PM »
I will admit that I use their service and I like it. I do think it is worth it for me - but just barely.

The things I like are they helped me pick funds for all three of my other accounts 401k 403b and HSA.

Stock loss harvesting is really nice. So far (3 yrs) I have not paid taxes on dividends and been able to deduct 3k a year of losses while my portfolio has grown great in the market.

The fee for me is abt $115 a month.

+1 for me. They were extremely helpful and available when I Fire'd - in changing my 457k to an IRA and setting up a taxable account. They were very clear in what advice they gave and helped considerably in choosing funds (spent an hour going over a very good power point) and I liked the way they set it w/ the equal sector weighting which I felt took a bit of the volatility away - a little :). I am paying almost $5k per year in fees though (.89% with no other add ons) and am looking at switching my IRA to Betterment. Betterment has a .40 fee on top of the funds fees (.05% to .17%) for their premium service (need $100k min) or .25. You can turn the .4 off and on as needed, which I'll likely do after I feel comfortable.

One issue I have in switching the taxable account though is the funds offered by PC don't match up well with those at Betterment so I'd have to sell at PC and would see capital gains.

alexpkeaton

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Re: Personal Capital Premium Service
« Reply #5 on: October 15, 2017, 03:27:32 AM »
Well, I'm a Wealthfront shill when it comes to automatic allocation, rebalancing, and tax-loss harvesting.

But if you just need simple advice you'll do just as well to ask here and save the fees.

TomTX

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Re: Personal Capital Premium Service
« Reply #6 on: October 15, 2017, 11:35:14 AM »
Came to ask/post the same thing but searched first.  Their sales pitch is good, arguing that equal sector weighting with robo re-balancing reduces volatility.  Their backtest period they show is only till 1990 because "that's when sector data is available".

I have a real hard time paying them .89% for the privilege but I'm interested to hear more.  None of our trinity study FI/RE gospel is based on this strategy.

Pfft. That's almost a quarter of your take-home under the 4% SWR.

Eff that noise.

Telecaster

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Re: Personal Capital Premium Service
« Reply #7 on: October 15, 2017, 05:27:09 PM »
Came to ask/post the same thing but searched first.  Their sales pitch is good, arguing that equal sector weighting with robo re-balancing reduces volatility.  Their backtest period they show is only till 1990 because "that's when sector data is available".

I have a real hard time paying them .89% for the privilege but I'm interested to hear more.  None of our trinity study FI/RE gospel is based on this strategy.

A client with a robo-advisor and his money are soon parted. 

Look at it this way:  The SWR is 4%.  Your robo-adviser expenses are almost 25% of that.  That means you either 1) need substantially more money before you can retire, or 2) you must accept a substantially lower standard of living.

Back of the envelope, let's say your portfolio is worth $1MM, so fees are $8900.  The same port in a low cost Vanguard ETFs would probably be around $900 or less.    Studies show re-balancing every few years is plenty good.  So you would be forking over 8 or 9 large every year for something you can do yourself in minutes every couple years.  I mean, for eight or nine grand, I'll work a a couple weeks.  And they are charging you that for a couple minutes.  Does that sound insane, or does that sound really insane?  Sounds f'ing crackers to me. 

One thing the robo-scammers talk about is tax loss harvesting.  Now, in that area, they probably can help.  You could do it yourself, but I'm certain they can do it more easily.  But if markets rise over time (which we are all betting they will), then after a few years they will have harvested all the losses and increased your basis so you will pay guaranteed higher taxes in the future.  Sounds like a deal.  If you really think taxes are a problem, drop a few grand on the best tax attorney in town.  It will be way cheaper, and he'll find a lot more savings than just tax loss harvesting. 


Indexer

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Re: Personal Capital Premium Service
« Reply #8 on: October 15, 2017, 09:52:17 PM »
Never understood Personal Capital's premium service.

I can have pure robo for <0.3%.
I can have a CFP over the phone/video conference for 0.3%. (Vanguard)
I can have a traditional human advisor(hopefully a CFP) with a local office for 1%. (<1% if you have a lot of assets)
Or Personal Capital human advisor(hopefully a CFP) over phone/video conference for 0.89%?

Why should I pay traditional office advisor fees for a phone/computer relationship? They are charging three times too much for their services.

alexpkeaton

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Re: Personal Capital Premium Service
« Reply #9 on: October 16, 2017, 04:12:21 PM »
One thing the robo-scammers talk about is tax loss harvesting.  Now, in that area, they probably can help.  You could do it yourself, but I'm certain they can do it more easily.  But if markets rise over time (which we are all betting they will), then after a few years they will have harvested all the losses and increased your basis so you will pay guaranteed higher taxes in the future.

Tax-loss harvesting only continues working so long as you keep investing new funds. If you're still in the accumulation phase of your life this isn't a problem. If you're you're retired and spending your money down, it'll be useless.

Indexer

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Re: Personal Capital Premium Service
« Reply #10 on: October 16, 2017, 07:42:43 PM »
One thing the robo-scammers talk about is tax loss harvesting.  Now, in that area, they probably can help.  You could do it yourself, but I'm certain they can do it more easily.  But if markets rise over time (which we are all betting they will), then after a few years they will have harvested all the losses and increased your basis so you will pay guaranteed higher taxes in the future.

Tax-loss harvesting only continues working so long as you keep investing new funds. If you're still in the accumulation phase of your life this isn't a problem. If you're you're retired and spending your money down, it'll be useless.

Exactly! And even in the accumulation phase TLH most impacts the recent contributions. Since markets trend up over time,  more and more of your assets will never benefit from TLH. However, with most TLH services you are paying an AUM fee on all of your assets, even those assets that will never benefit from TLH.

Something else that often gets lost in the TLH discussion are future taxes. When you harvest tax losses you are really harvesting your cost basis. This means when you sell those shares in the future your basis will be lower so you will have even more taxable gains. Now there is a benefit thanks to the time value of money. A tax refund today for $100 is more valuable than $100 of extra taxes in the future. The question is how valuable that really is and whether the benefit is large enough to justify all of the extra transactions and fees. If you read the fine print on Betterment's website you will find that their projections assume you don't sell all of the shares. When Betterment says that TLH can improve returns by 0.77% they are assuming you live in California(high taxes) and that you never sell 50% of the position. That means you harvested your cost basis and then never paid taxes on 50% of the gains.

I would like to see the scenario where 100% of the portfolio was sold and taxes were paid. I wonder what the increased returns are in that case. In that case does it improve returns enough to justify the costs of constant TLH? If someone has this data please share. :)

I would also be interested to see how constant automated TLH compares with regular TLH(don't check everyday, check during a bear market) after you take into account future taxes, diminished returns, and the costs. Regular likely isn't as effective, but it is also likely much lower cost.
« Last Edit: October 16, 2017, 07:46:09 PM by Indexer »