Empower
Annual Advisory Fee
Minimum Deposit
Our Rating
APY Cash Account
Personal Capital has recently been rebranded as Empower and this investment platform offers some nice features.
While primarily aimed at the higher portfolio value crowd, Empower actually has some helpful features that are free to use and can offer great insight into your current financial situation. You can plug in all of your financial information and immediately access insights into your day to day finances, retirement planning and investment goals.
In this review, we’ll explore some of the features I found helpful, the areas where Empower falls short to help you decide if this platform could be a good fit for you.
Is Empower free to use?
Empower offers many free features, including budgeting tools, portfolio analysis, and a net worth tracker.
Does Empower offer financial advisor services?
Yes, Empower provides access to financial advisors for personalized financial advice.
Can I link external accounts to Empower?
Yes, you can link external bank and investment accounts to Empower for comprehensive financial tracking.
Does Empower offer a high-yield savings account?
Yes, Empower offers a Personal Cash account with a high savings rate, which can be up to 10 times higher than the national average.
Does Empower offer a debit card?
Yes, Empower provides a debit card for its users, allowing easy access to funds in their Personal Cash account.
How do I sign up for Empower?
You can sign up for Empower by visiting their website or downloading their app and following the registration process.
Is Empower FDIC insured?
Yes, Empower's cash accounts are FDIC insured, ensuring that your money is protected up to the standard insurance limits.
Can I use Zelle with Empower?
No, Empower currently does not support Zelle for money transfers.
Pros | Cons |
|---|---|
Budgeting Platform | High Minimum |
Retirement Planning | Limited Focus on Everyday Finances |
Portfolio Management Tools | Potentially High Management Fees |
Competitive Cash Account Rate | |
Tax Minimizing Strategies |
Empower Features I Mostly Liked
Here are the key features that I found most appealing in Empower:
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The Free Budgeting Platform
Before you even consider starting investing with Empower, you can link your financial accounts to use the free budgeting platform.
This looks a little like many budgeting apps like Mint. With this feature, I can immediately see my monthly cash flow, my changing budget and my net worth.
As you can see in this screenshot, I can set a monthly budget and then monitor my income and spending to make sure I remain on track.
This is a very handy tool that can help me to track my mortgage, car loans and other financial obligations: I can even receive a heads up when a bill is approaching its due date.
This feature also includes a savings planner, so I can see if my yearly savings are enough to meet my retirement goals, the progress of my emergency fund and the progress I’m making on paying down my debt.
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Free Investing Analysis
Another free feature of Empower that I really liked is the free investment review feature.
I can link all my investment accounts and see how my portfolio is performing through the Empower “You Index.” This essentially combines all of my assets and compares them to a blended account or broad indexes, such as the S&P 500.
This is a very useful feature that allows a quick comparison of portfolio performance. I can quickly see where my money is investing and whether I’m on the right track with my trading decisions.
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The Interactive Retirement Planning Dashboard
Empower also has an impressive dashboard that creates a retirement planner page. As you can see in this screenshot, I simply needed to enter some basic information including my age, income and savings behavior to get a retirement picture.
This creates an interesting page that shows what I’m likely to have at retirement including an estimate of Social Security.
This interactive dashboard provides improvement suggestions and you can make edits to see how taking different actions would impact my retirement plan. This tool is available even if you don’t become a full Empower customer.
I can get a grade for my asset allocation to see if my portfolio is too conservative or aggressive, and Empower will provide recommendations for target allocations.
There is also a retirement fee analyzer that adds up how much I’m paying in yearly expenses, and the total cost over time. I can see if my fee burden is higher than average.
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Personal Strategy
One of the most appealing features of Empower is “Personal Strategy.” This creates a specific investment portfolio according to my requirements and long term goals. This feature uses Monte Carlo simulations to test probabilities of meeting my goals.
Personal Strategy uses a combination of low cost ETFs and some individual stocks to create a portfolio to maximize my returns based on my timeline and risk profile.
Empower collates his information via a questionnaire and I was walked through each stage of the process, making it simple to access this powerful strategizing tool
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Smart Weighting
If you are not completely onboard with a purely passive indexing approach, like me, you may appreciate Smart Weighting. This Empower approach allows me to access smaller investments with the potential for higher growth that may not be available with competing robo advisors.
“Smart Weighting” weighs assets based on sector, style and asset as opposed to market capitalization, which provides a higher risk adjusted return compared to standard market cap weighted allocations.
This adds active investing, particularly with the equity part of my portfolio. Essentially, I can add in individual stocks that require more than simple algorithm approaches, making a portfolio that better matches my preferences and requirements.
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Competitive Cash Account Returns
The Empower Personal Cash Account is a blend of savings or money market account and a checking account.
There are no minimum balance requirements, withdrawal limits or maintenance fees, making it a viable option to bring my everyday finances and investing under one banner.
However, the main draw for this account is that I can earn a highly competitive rate. Currently sitting at Earn up to 4.00% APY, this is comparable to some of the best high yield savings accounts in the marketplace.
While this account does not provide access to paper checks or a debit card, it is simple to link a checking account. I did this with my main checking account and it made it easy to transfer cash out for bills and expenses.
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Goal Planning
Another feature of Empower that I really enjoyed was the goal planning. This rivals the Betterment goal planning features and it offers customized goal setting.
I set a goal for a vacation:
Once I set the goals, I can benefit from ongoing monitoring with my financial advisor, providing opportunities for revisions as my circumstances change.
Additional Features That Helped Me
There were also some additional features that I found helpful:
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Socially Responsible Investing
While I liked the Personal Strategy feature, I found the Socially Responsible Investing feature helpful. This portfolio allows me to focus my portfolio on companies with high environmental, social and corporate governance (ESG) standards.
Primarily, Empower focuses on US and international equities within these portfolios, but I found it nice that I could obtain decent returns without compromising on my ethics, without needing to research individual stocks and brands.
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Schedule A Call With Financial Advisor
The “Schedule A Call With Financial Advisor” feature in Empower allows users to easily set up a consultation with a financial expert.
During the scheduled call, you'll connect with a financial advisor via phone or video, receiving personalized advice tailored to your financial situation and goals.
This feature provides expert insights, helps with goal setting and planning, and offers ongoing support to ensure you stay on track with your financial objectives.
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Personalized Portfolio Construction
The Empower allows personalized portfolio construction.
The Empower algorithm considers a variety of factors including my age, current net worth and income, time horizon and goals, risk tolerance, expenses, personal beliefs, desired lifestyle, legacy goals and future pensions to create a tailored option for me.
This customization accommodates my unique preferences and tax situation, but I can also request distinct asset allocations including adding or excluding individual stocks, replacing ETFs and special tax influenced strategies.
Wealthier clients can also access private equity and direct equity investments.
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Tax Minimizing Strategies
Another important feature of Empower is the tax minimization strategies.
The platform offers tax efficient investing and tax loss harvesting. There is a priority for debt tax advantaged debt investments such as municipal bonds and you can offset gains without changing your overall portfolio.
This is particularly important if I have an investment with a loss that can be swapped out to realize the loss and offset my gains to minimize my tax burden.
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Wealth Management
Providing you meet the minimum $100,000 investment requirement, you can access unlimited retirement planning advice and managed ETF portfolios.
While this is a high barrier to entry, if you’re bringing all of your investments over to Empower, this is a very valuable feature. Empower also offers more personalized services for higher portfolio clients.
For example, if you have $1 million or more with Empower, you can unlock the private client service tier. This includes dedicated financial advisors, priority specialist services and access to the Empower Investment committee that designs and maintains Empower’s strategic portfolios.
Is Empower Safe?
Empower has SIPC (Securities Investor Protection Corporation) insurance with up to $500,000 of coverage including up to $250,000 for cash. Additionally, cash accounts through partner banks carry FDIC insurance offering up to $5 million of coverage in the case of malfeasance or bankruptcy.
In terms of security, Empower has some of the highest security protocols in the industry. There is two-factor authentication, 256-bit data encryption, firewalls, and perimeter security that is comparable to banks.
This provides some reassurance that my finances are in good hands.
How's Empower Fees Compared To Industry Average?
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What Can Be Improved
As with all financial products and platforms, Empower is not perfect and there are a few areas where improvements could be made.
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High Minimum For Wealth Management Limits Accessibility
Firstly, the barrier for wealth management and investment service is on the high side.
Although $100,000 is not the highest minimum investment requirement in the industry, it does limit the platform accessibility for many potential customers.
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Limited Focus on Everyday Finances
There is also a heavy focus on investing rather than everyday finances. While there are some strong features for budgeting and managing day to day finances, its main priority is investment planning.
So, if you only want to use Empower for your daily cash flow, there are other platforms that offer more features and greater functionality.
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Potentially High Management Fees
Finally, the management fees have the potential to be on the high side. There is a tiered flat management fee that is calculated based on your total assets under management (AUM).
If you have under one million invested, the current fee is 0.89%. For example, if you have 500K portfolio, the annual fee will be around $4,450.
Who is Empower Best For?
Empower can be a great solution for each of the following:
- Those Who Need Comprehensive Financial Management: Empower is a good option if you want a platform to explore your financial situation. I can create budgets, track my spending, analyze my retirement fund progress and more without paying a single cent in fees. The budgeting feature on the app is comparable to many popular apps on the market, but you won’t need to pay a subscription charge or put up with annoying ads.
- Getting High Rates On Savings: The Empower Personal Cash account also offers an impressive savings rate that is up to 10 times higher than the national savings rate.
- High Net Worth Individuals: At the other end of the scale, Empower is also a great option for those with a high portfolio value. Clients with higher AUM values can access some great features including dedicated financial advisors.
