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UpsidesEmpower helped me cover a small income gap a few months ago. I had such a great experience with them. It was really easy to use the mobile app and I got my money within less than one day.
DownsidesNothing in my opinion.
Empower Review 2023
Note: Empower acquired Personal Capital in 2020. On February 16th, they introduced an exciting relaunch as Personal Capital will now be known as Empower.
Empower supplies a range of robust financial tools with help from a team of professional financial advisors.
However, their fees are a bit high and the platform is best suited for high-net-worth individuals.
With an Empower account, you get access to a clear picture of your net assets, a robust retirement planner, and a fee analyzer to discover hidden fees in your investment accounts.
Let’s look at Empower in more detail with a complete review below.
How We Rate Empower
At Financer.com, all service providers go through a thorough research and review process. Here’s how we rate Empower:
| Category | Rating |
|---|---|
| Affordability | ⭐⭐⭐ |
| Platform & features | ⭐⭐⭐⭐ |
| Fees | ⭐⭐⭐ |
| Transparency | ⭐⭐⭐⭐ |
| Customer support | ⭐⭐⭐⭐ |
| Overall | ⭐⭐⭐⭐ |
Do We Recommend Empower?
Yes, we recommend 5KFunds as a reliable lender marketplace. Skip to our full review below and see how we rate Empower.
Here’s what we’ll cover in this review:
Want to skip the details? Jump to our final verdict here.
Empower Overview
Empower is a leading robo-advisor for portfolio management. It offers free net worth tracking and retirement planning software.
Founded in 2009, Personal Capital was acquired by Empower Retirement in 2020 and stands out with its comprehensive range of money management tools.
Here’s a quick summary of Empower:
| Overview | Feature |
|---|---|
| Management Fees: | 0.49%-0.89% |
| Minimum Balance: | $100,000 |
| Account Fees: | None |
| Setup Fees: | None |
| Expense Ratios: | 0.08% average |
| Customizable Portfolio: | Yes |
| Available Assets: | Stocks, ETFs, private equity, bonds |
| Best For: | High-net-worth investors |
Empower provides a range of tax-minimization strategies. Some Advisor clients have access to stocks and private equity investments and every paying Advisory client can access a financial advisor.
With Personal Capital Cash, U.S. residents can access a savings account that offers higher interest rates as well as a range of free banking tools.
The personalized investment process used by Empower Advisors has been designed specifically for each customer.
The client’s answers to the initial questionnaire and the financial advisor’s interview determine the portfolio.
The portfolio is created by the algorithm, which incorporates a number of factors into its calculation, including risk tolerance, health status, tax laws, assets, retirement age, net worth, and income.
Account Minimums
There is a minimum investment of at least $100,000, making the service unaffordable for many. Although other financial advisors have lower minimums or even no fees, $100,000 is feasible when you compare it to an in-person advisor.
Account Management
Two devoted financial advisors are available to clients with balances that exceed $200,000, and they can assist with inquiries on a variety of topics, including taxes, estate and retirement planning, and personal finance.
Clients with investments between $100,000 and $200,000 can benefit from a group of advisors with a fiduciary commitment to the clients.
These consultants can be reached via email, video chat, or phone.
Although CFPs are not usually present, advisors can provide them upon request. Each client is given the advisor’s direct line.
Financial Planning
A number of free as well as in-depth tools are available from Empower, such as a spending tracker, 401(k) analyzer, and an investment checkup.
You don’t have to sign up for Empower’s advisory service in order to get access to this, but you will need to create login credentials.
Your entire financial situation may be seen in one location using the Empower Personal Dashboard™, which is a free feature on the account.
Aspects like cash flow, net worth, allocation, and portfolio balances, are simple to view. You can see your investments in a holdings module by the proportion of the portfolio they represent, the amount they represent, and whether they are “losers” or “gainers”
The tools and calculators available include:
- Savings Planner
- Cash Flow
- Budgeting
- Net Worth Tracker
- Education Planner
- Fee Analyzer
- Retirement Planner
Spending analysis is another service provided by Empower. It examines the cash flow and categorizes your expenses into groups like food, medical bills, apparel, and dining out.
It keeps track of linked accounts’ sources of revenue and outstanding debt.
Cash Management
As a free savings tool, Personal Capital Cash has no minimums.
- 2.60% APY and 2.70% APY for Empower Advisory Clients
- Aggregate FDIC insurance up to $1.5 million
- Easy to use on the web or the mobile app
- Get help from real people
- No fees
This program is managed by UMB Bank and after opening your account, your funds are secured in member banks.
The Empower Cash account is FDIC secured for up to $1.25 million – and this is significantly higher than the $250,000 traditional banks offer.
Retirement Planner
In order to evaluate whether you will be able to fulfill your projected income demands in retirement, the retirement planner examines your financial holdings.
You can change these needs, including your life expectancy, tax, investment returns, and income from Social Security.
The program updates predictions of retirement expenses according to your spending data by utilizing real-time information according to your financial activity.
Planning for college savings, financial decision support for insurance, home finance, stock options, compensation, private banking services, and the creation of tax, legacy, or estate portfolios are just a few of the services that become available when assets are handled.
As assets are managed, more instruments and services become accessible, such as insurance, house finance, stock options, remuneration, as well as private banking services, and the creation of estate, legacy, or tax portfolios.
Types of Accounts
Empower supports the following accounts:
- Non-retirement accounts
- Roth IRAs
- Traditional IRAs
- Rollover IRAs
- SEP IRAs
- Trusts
Apart from traditional IRAs, the company will advise on 529 and 401(k) plan allocations but doesn’t directly manage these accounts.
Empower also offers the Personal Capital Cash Management account with a 2.60% interest rate. Your rate will go even higher if you’re a Empower Advisory client.
Empower Fees
Empower fees for account management can be on the higher side, although there are no account fees.
Account Management Fees
With Empower, investors pay 0.89% of their assets managed on their first $1 million. Compared to similar services, Empower is more expensive: Vanguard charges 0.30% for the same offering, and Betterment charges 0.40% for unlimited phone access to advisors.
Related: Read our Vanguard review
Managing your investments with a traditional financial advisor can be much more costly than working with Empower.
The average advisor charges more than 1% of assets managed. For private clients, Empower drops its fee further, to as low as 0.49% over $10 million.
Setup Fees
There are no setup or onboarding fees and the annual fee is all-inclusive.
Empower Pros and Cons
Free tools: Empower offers free, comprehensive investment management tools — you don’t even have to be a member to use them.
Advisor access: Empower gives you access to either a team of advisors or two dedicated advisors depending on your account balance.
Pros
Empower has a lot of tools and features that are ideal for seasoned investors. Being a member also gives you access to dedicated financial advisors, which is something not all platforms offer.
High minimum and fees: Empower’s account minimum and management fee are on the higher end compared to some competitors.
Cons
The only real downside of Empower is that it’s out of reach for most beginner investors as it has an account minimum of $100,000.
How To Set Up Empower Account
Step 1
Signing Up
You must provide your email address, pick a password, provide your contact details, and enter your birthdate in order to register with Empower.
Whether you want the advising service or free tools, you must schedule a call with a financial counselor. You’ll get a biography that introduces your potential financial advisor.
Step 2
Account linking
In this step, you can now connect your accounts. It’s a secure process and you have the ability to add most of your accounts, like your:
- Bank
- Credit card
- Investment
- Home mortgage
- Debt
- Manual categories
Step 3
Using the Financial Tools
You’ll get access to reports and tools detailed below after your accounts have been synced.
All users have access to the tools, but only users with a $100,000 minimum for Empower Advisors’ financial planner-assisted investment management.
Step 4
Sign Up to use an Advisor
You must answer a few questions about your financial state, and goals to sign up with Empower Advisors. Then, after reviewing your investments, your advisor gives you a financial plan.
The next step is to open an account with their custodian and deposit funds or securities into it.
How Financer.com Rates Empower
Empower is best for high-net-worth individuals looking for free financial management tools and access to professional human financial advisors.
Customer Support
They offer customer support via the app as well as via phone from Mondays to Fridays from 9:00 am – 5:00 pm. After hours, you can send questions through your support portal or Empower Personal Dashboard™.
Some competitors allow for more support channels to customers, like video chat and phone support 24/7.
Conclusion
Empower will appeal to both higher net-worth individuals who have enough to get assistance from financial advisors, as well as DIY investors that want to benefit from free tools to manage their portfolios.
Investors with funds between $100,000 and $200,000 can get a comparable service level that is more affordable at other companies like Vanguard, which simply provides you with expert financial advisors.
Empower FAQs
What does Empower do?
Empower is a retirement plan recordkeeping financial holding company based in Greenwood Village, Colorado, United States. It is the second-largest retirement plan provider in the United States1. Empower provides a range of no- or low-cost investment options and offers the Empower Premier IRA, which provides straightforward help and advice on your financial goals, and the Empower Brokerage IRA, which lets you select and monitor your own investments.
Is Empower a reputable company?
Empower is a legitimate company that has been around for over 100 years. Empower states that keeping customer accounts, data, and assets safe is one of its top priorities. They offer multiple layers of account protection and security protocols including data encryption, frequent security evaluations by independent third-party cybersecurity leaders, and an internal cybersecurity program.
How long does it take to get money from Empower?
The time it takes to get money from Empower depends on the type of account you have and the method you use to withdraw the money. For example, if you have an Empower Brokerage IRA account and request a distribution by check, it may take up to 10 business days for the check to arrive.
Can I withdraw my 401k from Empower retirement?
Yes, you can withdraw your 401k from Empower Retirement. However, there are some rules and regulations that you need to follow. You can usually take out a loan from a 401(k) account without taxes and penalties, typically up to $50,000 or 50 percent of the assets, whichever is less. Generally, you must repay the loan within five years with interest.
