Should you make your own investing decisions or trust a computer to invest on your behalf? In a nutshell, that’s your choice when choosing Robinhood vs Personal Capital.
Personal Capital is an online robo-advisor while Robinhood is a more traditional stock brokerage.
At Personal Capital, your portfolio is managed and created by a digital algorithm. So, if you want to put your money to work but do not have the knowledge, time or interest to learn the ins and outs of investing, it may be the answer for you.
Robinhood, on the other hand, is best suited to investors who want to make their own investment decisions, and rewards them with zero commissions to enter and exit trades.
But which service makes the most sense in terms of fees, minimums, account types and customer support? We’ve done the research to help you decide in this Personal Capital Vs Robinhood review.
Robinhood vs. Personal Capital: Quick View
Robinhood is a free platform that offers you a limited selection of exchange-traded funds (ETFs), cryptocurrencies, stocks and options.
Among its lineup are more than 2,000 no-commission ETFs and American Depository Receipts for about 250 companies around the world.
Robinhood provides you with some research and data free of charge, support via email during business hours, and a regular newsletter, called Snacks. It does not require a minimum balance to get started.
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Personal Capital, on the other hand, provides you with expert human investment advice in addition to its automated investment management solution, so you get a more custom-tailored experience.
Other perks from Personal Capital that you won’t get at Robinhood include a socially responsible portfolio option and Retirement Paycheck, a feature that helps you to plan your retirement finances.
The catch is that these value-added features from Personal Capital are only available to investors who deposit the required $100,000 minimum balance.
When you invest $200,000+, you received a dedicated team of two financial advisors.
In addition, your account at Personal Capital comes with mandatory fees, such as an annual management charge of 0.89% of your balance.
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Fees: Personal Capital vs Robinhood
Personal Capital charges you for its money management services, although it does not levy an account fee.
For amounts under $1 million, the annual management fee on assets is 0.89%, though it reduces with higher account balances.
Plus, you must cover an average 0.08% investment expense ratio on ETFs in your portfolio.
Robinhood provides standard account, securities trading and account maintenance services free of charge.
Should you transfer any of your holdings at Robinhood via Automated Customer Account Transfer Service to another brokerage account, you must pay an outgoing transfer fee of $75 per transaction.
Incoming fund transfers from your checking or savings account are free.
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Investment Minimums:
Robinhood vs Personal Capital
The minimum deposit amount needed to open and maintain your Personal Capital managed account is $100,000.
At this level, you get all the basic tools, features and services, including access to a pool of human investment advisors.
Personal Capital Perks
Personal Capital assigns more perks as your account balance goes up. The more you invest over the minimum threshold, the more you get from Personal Capital.
For example, with a minimum of $200,000, you get two specific advisors who are dedicated to overseeing your account, and so the level of personalization rises accordingly.
Another perk of putting more into your Personal Capital account is a lower management fee.
For instance, if you invest between $3 million and $5 million, you pay just 0.69% per year rather than the base rate of 0.89%.
Robinhood offers you a basic account with no investment minimum.
You can access its tools and articles without funding your account, but if you wish to invest, of course, you have to deposit some capital.
Robinhood also offers its Goldmargin account, which requires a $2,000 minimum deposit.
It includes the benefits of commission-free trading, but you can also borrow up to the amount of your accessible funds. This means that you can take advantage of leverage to possibly “goose” your returns, but keep in mind leverage can also amplify losses.
You pay your loan back with a monthly payment. The fixed payment includes interest that is determined by the amount you borrowed.
For example, if you have $75,000 in available funds in your Robinhood Gold Margin account, you can borrow up to $75,000 in investment capital, and your interest rate at this level will be around 5%.
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Account Types
Personal Capital supports retirement accounts, IRAs and trusts. It offers professional guidance for your existing 401(k) and/or 529 accounts but does not directly manage those accounts.
At Robinhood, you can opt for the instant investment account or the Gold margin account detailed above. You have a cash-only account option too.
As a downgrade from the standard instant account, it does not include the same instant settlements or deposits.
Tax Strategy:
Personal Capital vs Robinhood
Minimizing the tax you owe is an important part of your financial strategy, and if you are new to investing, it is probably one of the gray areas that make investments daunting.
If you are only dabbling, you may not consider tax on your investment income to be that important. However, as your portfolio begins to grow, you will recognize the need for a good tax-savings strategy.
Your Personal Capital account comes with a tax strategy that includes tax-loss harvesting, primarily for portfolios comprising of both ETFs and individual securities.
This strategy optimizes your tax savings on investment income by:
- Avoiding tax-inefficient mutual funds
- Strategic fund allocation into taxable and tax-free accounts
- Tax-loss harvesting to offset gains and reduce the associated taxes
Robinhood does not offer tax-loss harvesting. Neither does it offer retirement accounts or trusts with tax-deferred or tax-free features.
It does provide you with an investment income form to file with your IRS return.
If you want to build your investments over time, you may want to consider an online investment platform that includes tax-reduction strategies.
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Human Advice vs. Digital Advice
Digital investment advice is based on Nobel prize winning research so that your portfolio is diversified and remains balanced.
However, human advisors continue to bring a level of flexibility, customization and expertise into investing that appeals to many investors.
While newbies may only be looking for the basics that a robo-advisor can easily deliver, you may be interested in extra guidance with a personal touch.
If so, you can get that at Personal Capital where it’s possible to consult with an advisor by email or speak with your own duo of dedicated financial gurus (if your account balance is sufficiently high).
Dedicated advisors are aware of your financial goals and the makeup of your portfolio, so they are better equipped to help you optimize returns based on your risk profile.
Robinhood, in contrast, is a brokerage platform tailored to self-directed investors who know how they want to allocate money.
It is ideal for getting a start on investing, but if you want human advice, you will have to get it elsewhere.
Tools and Calculators
Robinhood’s tools and calculators are as basic as you would expect from a no-frills platform. They include:
- 10-Q earnings reports for the companies of your choice
- Customizable cryptocurrency and stock watchlists
- Candlestick charts showing a company’s open, high, low and close numbers
- Asset value tracking
- Current account information, including balances, investments and taxes
- Morningstar analyst ratings
Personal Capital’s toolbox is more robust. It includes the following:
- Investment checkup
- 401(k) analyzer tool
- Spending tracker
- Spending analysis
- Retirement planner
- Dashboard showing your complete financial profile
- College savings planner
- Private banking service
Asset Classes
Personal Capital offers a menu of six liquid asset classes, which include domestic stocks, international stocks, U.S. bonds and international bonds.
It also features alternatives such as real estate and commodities like gold and cash. Your portfolio will contain a combination of these assets.
Robinhood’s asset classes include stocks and ETFs listed on the U.S. stock exchanges, cryptocurrencies such as bitcoin and Ethereum, and ADRs for more than 250 companies worldwide.
It does not accommodate forex or fixed-income trading. Additionally, it does not support preferred stocks, mutual funds or bonds.
Customer Support Comparison
Personal Capital offers full-time customer service support via email or mobile device plus an FAQ page.
It also provides answers to your financial questions by email from either a team of advisors or your two dedicated advisors by phone, email or chat.
Robinhood’s customer support is strictly by email.
It does not provide you with a phone number, but it does have an online support center where you can search for your problem and the suggested solution. The help center is intuitive and logically organized.
Personal Capital Mobile App Vs Robinhood
The Robinhood mobile app for iOS devices works on the Apple Watch and the iPhone.
You can also download the Robinhood app for Android devices.
Personal Capital offers account holders a mobile app for either Apple or Android phones and/or tablets plus the Apple Watch.
Both the Robinhood and Personal Capital apps are very similar to their web-based versions.
You can use them to check all your accounts and financial activities, track your spending and follow the performance of your portfolio.
Which Is Best for You:
Robinhood or Personal Capital?
The difficulty in declaring a winner between these two online investment platforms lies in their differences.
On the one hand, Robinhood is considerably less expensive and far more financially accessible, but on the other hand, Personal Capital provides so much more as far as tools, guidance and investor resources.
As an entree into investing, Robinhood wins. As a management platform for hands-off investors, Personal Capital takes first place.
If you have the means to meet the investment minimum, Personal Capital is ideal for investors who want to put their retirements on auto-pilot.
It offers a number of upgrades as your portfolio prospers and your investments grow as well as automatic tax-loss harvesting that could save you money when April 15th rolls around. Plus, you get human financial advice to customize and optimize your computer-generated portfolio.
If money is tight, you really cannot go wrong with Robinhood. No fees and low risk are bound to be attractive if you are a fledgling investor.
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