These days, many American families have a bewildering array of financial accounts. Between checking and savings accounts, credit card accounts, insurance companies, money market accounts , IRA accounts. mutual funds. and a Section 529 plan, its easy to lose sight of the big picture. Just checking your balance once a month with so many different companies can be a very time-consuming process.

Personal Capital  seeks to streamline that process. Billing itself as an aggregator, the site helps you tame the many-headed beast. At the same time, the site purports to give you access to unbiased advice from its network of personal financial planners. So now that you can get a handle on all your different financial accounts, theoretically youll know what to do with them.

Yes, its not the only robust financial account aggregator out there. Mint.com offers an excellent product, but its designed more for debt reduction and bank account tracking. If you have some savings, and youve been able to invest, Personal Capital picks up where Mint leaves off. It places less emphasis on the basic transactional stuff and credit card tracking, while providing substantially better functionality for tracking investments and facilitating more advanced financial planning concepts, such as asset allocation, income tax planning, and tax harvesting.

How It Works

You have to put in some time inputting your financial information at the beginning of the process. You must enter your personal account information and passwords into Personal Capitals site, and while this may make some uncomfortable, the site is secure. Each night, Personal Capitals servers log into all your accounts and download your latest balance.

The sites web-based software then aggregates all the information into a handy series of charts and graphs to help you make sense of your savings and investments, and to help you gauge your position against market performance.

The site collects your data and organizes it into a number of helpful charts:

• Balances and asset allocation
• Investment return information
• Spending reports
• Asset allocation
• Projected fees

Best of all, its free.

Your Personal Fund

Unlike most financial aggregators, you get a bit of help developing your personal strategy, as well as creating what Personal Capital calls your personal fund. Your personal strategy is a basic asset allocation based on a brief interview in which an advisor talks to you about your financial situation, goals, risk tolerance, and time horizon, and then creates a model portfolio for you. For example, you may input your age and answer a few questions about your risk tolerance, and a computer will create a generic recommendation of, say, 40% stocks, 40% bonds, and 20% cash.

Your personal fund refers to the portfolio you create, with Personal Capitals assistance, to help you reach your financial goals. That said, you can still take advantage of the aggregation, even if you dont use the recommendations.

Optional Advisory Services

Whats the catch? Well, none, exactly. Personal Capital is a registered financial advisor providing this free service, essentially, as a loss leader in order to attract more affluent site users those with investable assets of at least $100,000 and get them to use, and pay for, financial advisory services. Personal Capital gets its money by taking a percentage of assets under management, or AUM.

For example, if you entrust $1 million to a financial planner who works on an AUM fee of 1% of assets, you must pay $10,000 per year to the planner to take charge of your portfolio. A 1% fee, or just under it, is fairly typical of AUM arrangements on large accounts over $100,000 or so.

You dont have to pay anything to Personal Capital for setting up your profile and keying in your financial information, though. You only pay if you actually elect to have Personal Capital manage your portfolio for you. In exchange for the AUM fee, you get the services of a certified financial planner .

But using the companys wealth management service is strictly voluntary. If you prefer to do things yourself, or if you have another wealth manager you prefer, you can continue using the data aggregation and reporting services absolutely free, holding your money wherever you like.

Key Features

• The Universal Checkbook . Personal Capital sells this feature as the only checkbook youll ever need. While that might be a bit of an exaggeration, the Universal Checkbook is a tremendously useful tool. Its an online application that makes it easy for you to transfer money between any of your accounts. You enter your directions into your iPhone app, and Personal Capital transfers the money to your payee  free of charge.
• Solid Security. In an age where hacking and online identity theft is a major concern, security is always important for any financial website. The security on the Personal Capital website is as good as it gets. A number of company executives cut their teeth in the computer security, encryption, and related industries. Theyve built the best security features in the industry right into the site. But remember the strength of your password is crucial, so dont make it easy to guess, and dont keep it written on a post-it note taped to your laptop.
• Stock Option Tracker. There is life beyond bank balances, credit card accounts, brokerage accounts, and retirement funds. Personal Capital realizes this, and includes a powerful application to help you track the value of any options you own. If you get options from work (for example, as incentive stock options ), or if you buy your own options as a speculator on the open market, Personal Finance helps you track them. Whether theyre in-the-money, out-of-the-money, or at-the-money, the tracker helps you make informed decisions on when and if to exercise those stock options. The what if calculator helps walk you through difference scenarios, such as what happens if you wait until your options are more completely vested, and what your profits might be if you exercise your options at given price points.
• Tax Optimization . Personal Capital provides a number of online tools to help you minimize your capital gains tax exposure by alerting you to imbedded capital losses in your portfolio. This lets you take advantage of tax loss harvesting strategies. Tax loss harvesting means you cancel out taxable capital gains elsewhere in your portfolio by selling off losing assets. Your losers offset your winners, directly reducing your capital gains tax bill. If you have extra losers, you can also sell them to offset as much as $3,000 in personal income in any given year. If you have more than $3,000 in losses, you can carry those losses to future years, offsetting capital gains and then as much as $3,000 in income per year until your capital losses are exhausted. Just be aware of wash sale rules: If you sell an asset and claim a capital loss on it, you cannot buy the same security back or a substantially identical one for 30 days after you sell.

Advantages

Disadvantages

Suitability

Financial planners that hook up with these kinds of free services tend to be new in their practices, and looking to build up clientele. They can do a fantastic job for upper middle-class, bread-and-butter clients with fairly common issues. But if you have significant tax planning, estate tax, cross-generational planning, international planning, or business succession planning and valuation services, you will probably need someone in person. Actually, youll probably want to engage a cross-disciplinary team of legal, insurance, tax, and financial experts.

But if youve graduated from Mint.com and have pretty straightforward retirement planning, Social Security, income tax, and college planning issues, Personal Capital is an excellent step up. Theres no reason that their planners cant point you in the right direction with portfolios in the $100,000 to $5,000,000 range, especially if you would rather be doing something besides trying to pick stocks, bonds, and funds yourself. Whats more, they do manage to bring unbiased advice from a fiduciary to the table, and do so at a very reasonable cost.

Final Word

If you dont make the $100,000 investable asset threshold required to retain Personal Capitals money management services, you can still benefit quite a bit just from their free help setting up your asset allocation at the outset. Studies show that as much as 90% of your investment returns are determined by asset allocation, not stock selection. So if youre lost in the woods, getting even this basic level of help can go a long way in helping you reach your financial goals.

Do you use an aggregation site like Personal Capital. What do you like or dislike about it?