Empower Review 2024: Pros, Cons and How It Compares

Editor’s note: Empower acquired Personal Capital in 2020, and in Feb. 2023, Personal Capital finished its rebranding under the new name Empower. The service and its offerings remain largely the same.

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.

High minimum and fees: Empower’s account minimum and management fee are on the higher end compared to some competitors.

• High-net-worth investors.

• Free financial management tools.

• Access to human financial advisors.

Period considered: Aug. – Oct. 2023

Empower has a $100,000 minimum, which puts the wealth management service out of reach for many customers. Other online financial advisors offer services with far lower minimums, and some even have $0 minimums. However, compared to a traditional in-person financial advisor, $100,000 is reasonable.

Empower investors pay 0.89% of their assets managed on their first $1 million. This is fairly standard for the online financial advisors that offer a similar level of financial planning services. But if you don’t have substantial planning needs and you’re looking for a cheaper option, Betterment Premium, Betterment’s answer to the hybrid model, charges 0.40% for unlimited phone access to advisors.

Managing your investments with a traditional financial advisor can cost significantly more than working with Empower; the average advisor charges more than 1% of assets managed. At higher balances with its private client service, Empower drops its fee further, ranging from 0.79% on your first $3 million to as low as 0.49% over $10 million.

Empower’s annual fee is all-inclusive, meaning there is no setup or onboarding fee.

Those with balances of $250,000 or more get access to two dedicated financial advisors who can answer questions about a wide range of issues, including retirement planning, estate planning, taxes and home financing. Clients with $100,000 up to $250,000 invested have access to a team of advisors. These advisors are available via phone, email or video chat. Advisors aren’t always certified financial planners, but CFPs are available upon request. All clients have a direct phone number for their assigned advisor.

Empower offers a variety of free and comprehensive tools, including an investment checkup, a 401(k) fee analyzer and a spending tracker. Though you must create Empower login credentials to use them, you don’t need to be enrolled in the company’s advisory service. The Empower dashboard, part of the free offering, lets you view your entire financial picture in one place. You can easily view aspects such as net worth, cash flow, portfolio balances and portfolio allocation. A holdings module shows you how all of your investments are performing, and lets you view them by percentage of your portfolio, dollar amount and whether they’re “gainers” or “losers.”

Empower also offers spending analysis, a look at your cash flow that divides expenses into categories such as groceries, health care, clothing and restaurants. The tool tracks income sources and bills due for linked accounts as well.

The retirement planner analyzes your investment and cash accounts to forecast whether you’ll meet your self-determined income needs in retirement. You can adjust those needs, as well as your expected Social Security income and the tax, life expectancy and investment return assumptions made by the calculator. The tool pulls real-time data from your Empower account and incorporates day-to-day financial activity, updating estimates of retirement spending based on current spending figures.

The tools and services available increase along with the assets managed to include tax optimization, in-depth specialist support and private equity investment options.

The tools and services available increase along with the assets managed to include insurance, home financing, stock options and compensation; private banking services; and estate, tax or legacy portfolio construction.

Like with most financial advisors, clients have to pay the expense ratios of the exchange-traded funds included in the portfolio in addition to the management fee. At Empower those fees are fairly low, averaging only 0.08%.

• Clients with $100,000 up to $250,000 in assets are invested in a portfolio of ETFs that carry that weighted average expense ratio of 0.08% and are designed to be tax-efficient.

• Clients with $250,000 to $1 million in assets receive all the benefits above, as well as the ability to customize a portfolio that includes individual stocks and ETFs.

• Clients with $1 million or more in assets receive the services above and the ability to invest in individual bonds.

Empower’s personalized approach takes a holistic view of a client’s financial picture — not just the assets it manages. The company uses a portfolio selection process it calls Smart Weighting, which invests equally in all sectors, rather than mimicking an index like the S&P 500.

Some financial advisors allow you to keep your money at any major brokerage, which can save you money if your past or future broker charges any kind of fees. Unfortunately Empower only manages money at their custodian, Pershing LLC. Empower can provide investment reviews and recommendations for 401(k) and IRA accounts and can also manage active 401(k) plans.

Empower manages nonretirement accounts, Roth, traditional, rollover and SEP IRAs and trusts. Empower will advise on 401(k) and 529 plan allocations, but does not directly manage those accounts.

Empower utilizes asset location (putting investments into the most tax-efficient accounts), tax-loss harvesting (a strategy where you sell investments at a loss to offset capital gains tax) and tax efficiency (investing with stocks and ETFs over mutual funds) to help you minimize your tax bill.

Customer service is available through the app and by phone Monday to Friday from 9:00 a.m. to 5:00 p.m. Pacific time. Questions can be submitted after hours through the Dashboard or support portal. Some of Empower’s competitors offer more comprehensive customer support, such as 24/7 phone support, holiday hours or video chat support.

Empower should appeal to two main kinds of investors who fall on opposite ends of the spectrum: DIY investors who can use the company’s free and comprehensive tools to gain valuable insight into their portfolios, and high-net-worth investors who can deposit enough with the service to gain access to dedicated financial advisors and the services you’d get from working with a traditional human advisor.

Investors who fall in that $100,000 up to $250,000 range, which only offers access to a team of financial advisors, can find a similar level of service elsewhere for less.