Mediaboss Marketing

SAN FRANCISCO - How should advisors think about Personal Capital?

Like many of the firms dismissed by rivals as "robo advisors," the technology-centric RIA has grown up in Silicon Valley with venture capital backing. It focuses on digital delivery of advisory services, and prides itself on the personal financial management software that it gives away for free.

Yet the San Francisco-based RIA has over 50 advisors in two cities, says founder and chief executive Bill Harris -- although most clients will meet their advisor only virtually -- and targets investors up to 60 years old.

Personal Capital has also eschewed the online competition's low fees and low minimums: It charges 89 basis points, has a $100,000 minimum per household for paying customers and just began offering a new Private Client service for customers with $1 million to $10 million in investable assets.

So why would clients pay the same fee traditional advisors charge but not get to see their wealth manager in person?

"Most of those clients would view that as an advantage of our service," Harris says. "They don't want to have to go an office. They want to leverage the technology that's available."

TECH EDGE

Indeed, technology is at the heart of Personal Capital's operations. The free software "is the most important part of our entire service," says Harris, a Silicon Valley veteran who was the former chief executive of Intuit and PayPal. "The software collects comprehensive personal financial data and lays the foundation for our goal of providing an end-to-end system to help people manage their money."

The free software service has been an excellent source for leads, Harris says.

Approximately 500,000 people use the software, he says, adding that about 5% of the users with $100,000 in investable household assets have moved over to Personal Capital's fee-based service.

More here:
Real Advisors, Higher Fees: Is This Online RIA a Robo?