I recently created an account on Personal Capital based on the terrific reviews these guys are getting on the personal finance blogosphere. (Note: I’m not completely blind, personal capital links on blogs, including mine now, are affiliate links so this probably tends to skew reviews in their favor. With that being said, other financial institutions offer similar affiliates program but get much less publicity, so that still speaks in favor of Personal Capital).
I have been slightly reluctant to move forward with it though, as my main concern was about privacy and security: giving away all my bank/brokerage account credentials to one single company seemed like a bad idea to me.
Personal Capital had a complimentary phone call with me to assess my financial situation and see how they could work with me, and today I want to talk about that.
I’m typically reluctant to share details about my wealth with anyone, including (particularly?) financial advisors. But recently a good friend of mine told me he has been using Personal Capital and was really impressed with their service. So I decided to be 100% honest with the advisor and give him all the information he asked for.
The advisor first told me he could see I hadn’t linked my personal capital account with any other bank account, and asked if this was a technical issue he could help with. I explained my concerns about security, and he helped relieve some of my fears by sending me some documentation about how they handle security, passwords, and two factor authentication. What dramatically helped me is that he mentioned their CEO founded Intuit (of Turbotax fame) and Paypal (something I didn’t know), 2 website I use a lot and trust with my personal information. He also gave me details on how the email/password information from other banks is not stored on their end. I now trust that with Personal Capital, my information and credentials are as secure as they can be, so I’ll probably move forward and start linking my accounts.
The rest of the conversation started pretty typically. The advisor asked me for details about my wealth, my income, my work situation, family situation, projects for the future (college money? Intention to leave money behind for your family? Do you expect any inheritance, etc…), when I plan to retire, etc…
Interestingly, after I gave him details about our expenses, our income, our wealth, he asked me something along the lines of: “What are your plans for retirement, are you thinking of retiring a couple years from now, or…?”. He was spot on, despite knowing that I’m 35, and I must say this kind of impressed me. I almost felt that he had guessed all my plans for early retirement, and I assume he could read that in the details I gave him about my expense habits, saving habits, plans, etc… I have to guess that lots of ER/FI people use personal capital, and I might trigger some of the stereotypical Early Retiree flags in their systems. But it felt good to know that the advisor sounded completely ok with that.
Can Personal Capital work with expats?
We then moved on to my “expat” situation. I mentioned that I am French, with plans to move to Japan, and that maybe investing my money with a US-based company was not in my best interest, or even possible from their perspective. He quickly checked and said France was not on their “blacklist”, although it would be interesting to know if the combination “French dude living in Japan” could be a problem. He said he didn’t think so, but I could tell he wasn’t 100% sure. He also mentioned I might need to maintain a P.O. box in the US just to make things official, and that’s kind of a yellow flag for me. I’d do it if I could get some guarantee that this does not generate any weird tax situation, but who knows. I already have a constant fear that Schwab will simply terminate my account with them when I go back to Japan, so I don’t know if moving my money from one US broker to another will make things easier.
A friend of mine, who is a U.S citizen, living in the US, with plans to go back to Japan, similarly to me, also told me he recently started moving his assets to Personal Capital, and said they have no issues with his plans to move to Japan.
The Personal Capital advisor also mentioned they have lots of clients who live in Dubai and Hong Kong, and that the expat status is usually not a problem for them. He stated their are some countries they can’t deal with, but that France was not a problem… I tried to understand that part… is the nationality (I’m French) the problem here, or where I live? That seemed to be a bit confusing so I’ll need to follow up on that.
Bottom line is, yes, Personal Capital can deal with accounts outside of the US but there seems to be lots of conditions that I won’t entirely know about until I follow up with them.
The conclusion is that I will move forward and start linking my accounts with Personal Capital. As far as moving my investments from Schwab to them, I’ll have to wait and understand if Personal Capital can contractually confirm to me they would be ok with my business if I were to move to Japan.
For those of you wondering, the benefits of me having my money in a US broker rather than in Japan are:
- I already have my money in the US due to historical choices (my company opened a Schwab account for me when I was in Japan)
- US brokers have lower fees than Japan brokers (although I was recently sent data showing me I could go to low fee brokers in Japan as well)
- There’s huge value for me to be able to talk to representatives in English, and navigate an English website, rather than a Japanese one. We’re talking here of the difference between minutes to do something versus hours. Yes, my Japanese isn’t that great.
However there are some (bad) consequences of having one’s money in the US when you don’t live in the US (whether you’re an American citizen or not). For those of you who are expatriates, I strongly recommend Andrew Hallam’s book: The Global expatriate’s guide to investing.
Update: unfortunately Personal Capital have confirmed to me that they would need my country of residence to be the US. The people I know who are expats are actually US citizen and game the rules by providing Personal Capital with some family member’s address. Personal Capital turn a blind eye to this I assume, as long as it’s the only rule you bed. Bottom line, they’re not the best choice for someone in my situation.