Empower is a free financial dashboard that can track every aspect of your finances. We’ll look at how this personal finance software works in our Empower review.
You can trust the integrity of our balanced, independent financial advice. We may, however, receive compensation from the issuers of some products mentioned in this article. Opinions are the author's alone. This content has not been provided by, reviewed, approved or endorsed by any advertiser, unless otherwise noted below.
- Free financial dashboard
- Tax optimization
- Financial Advisors
(Personal Capital is now Empower)
Empower has risen to become one of the most popular financial management platforms available. It comes in two versions, the Free Financial Dashboard and the Wealth Management service. The free version is primarily a budgeting tool, but it provides abundant tools for investing. The wealth management version is a full investment management service, working somewhat like a robo advisor, but providing a generous amount of live support from financial advisors.
Empower is used by nearly two million people, who primarily use the free version. But the wealth management service takes in more than 25,000 clients, who have more than $14 billion in assets under management. The company was founded in 2009, and is headquartered in San Carlos, California.
Most users start out with the free version, then upgrade to the wealth management service if they want direct investment management of their investment portfolios. But even if you don’t upgrade, the free version offers so many investment tools it’s worth having for those alone.
How Empower Works
As noted at the beginning, Empower offers two versions, the Empower free Financial Dashboard, and Empower Wealth Management. While they’re related services, they provide very distinct functions. Let’s take a look at each individually, to see which service is best for you.
Empower Free Financial Dashboard
Though this version is often seen primarily as a budgeting app, it's actually fairly limited in that regard. However, the investment tools are extensive. Even if you have no intention of using Empower for budgeting, the free version will provide valuable investment support.
The dashboard serves primarily as a financial aggregator, where you can include all your accounts. That includes investments, savings, checking, loan accounts and credit cards. It allows you to assemble your entire financial life on a single platform. You can even include any employer-sponsored retirement plans you have--in fact, this is the free version’s specialty. It’s a highly organized method of asset allocation so that you can view your entire financial situation at once.
The free Financial Dashboard offers the following capabilities:
Budgeting. You can use the free version as a budgeting tool to track your cash flow and spending patterns. You can also analyze your spending categories and individual transactions. You'll get monthly summaries, helping you to know exactly where your money is going. However, if you're looking primarily for budgeting software, you probably won't use Empower. For example, while the platform provides alerts of upcoming bills, it does not provide a bill payment function. You will have to continue to pay your bills directly from your bank accounts.
Cash Flow Analyzer. The Cash Flow Analyzer tool creates a budget for you. Once set up, it tracks your income and expenses from the different financial accounts you’ve linked to the platform. You can then set financial goals, like preparing for retirement or paying off debt. The analyzer will help you develop strategies to reach your goals.
Despite the Empower Financial Dashboard’s limits on the budgeting side, it’s an excellent service when it comes to investment management. It offers the following investment tools:
401(k) Analyzer. Millions of people participate in employer-sponsored retirement plans. But few are aware of the investment fees that are hidden in those plans. The analyzer will show you exactly what each fund in your plan is costing you. It will then suggest alternative allocations into lower-cost funds.
Retirement Planner. The planner uses a series of what-if scenarios, to help you determine if you’re on track with your retirement goals. You can adjust for changes in your situation, such as a job or career change, the birth of a child, or even saving for college. It takes into account outside factors that can have an impact on retirement.
See also: Review of Empower's Retirement Planner
Cryptocurrency Tracking. Empower now allows you to track your cryptocurrency on hundreds of different crypto exchanges. You can track thousands of different token types, too, including Bitcoin, Ethereum, and Litecoin. This is a great feature for those adding crypto to their portfolio and who want to keep up-to-date on the price.
Investment Checkup. This might be the most important investment tool of all. Once you aggregate your investment accounts on the platform, this tool will help you to optimize those accounts. It can recommend adjusting your portfolio mix to improve your overall investment performance.
Net Worth Calculator. By tracking your assets and liabilities, you can quickly determine your net worth. That’s important because net worth is the most significant number in determining your overall financial strength.
Personal advisor. Even though the Financial Dashboard is free to use, you'll still have the ability to contact a personal advisor. The advisor won't be able to provide investment advice, but they can help you with questions regarding the service, as well as provide additional information on any recommendations made by Empower.
Empower Wealth Management
Empower Wealth Management is sometimes grouped with robo advisors, which isn't entirely true. While they do use significant automated investment tools, there's also a very strong element of active human management. That really puts the service somewhere between traditional human investment advisors and robo advisors.
Similar to robo advisors, Empower starts by determining your risk tolerance, investment goals, and time horizon. But they also consider your personal preferences in constructing your portfolio. Your portfolio is managed according to Modern Portfolio Theory (MPT), by investing across multiple asset classes for proper diversification. They also rebalance your portfolio periodically to maintain target asset allocations.
Your portfolio is invested in six asset classes:
- U.S. stocks
- U.S. bonds
- International stocks
- International bonds
- Alternative investments, including real estate investment trusts, energy, and gold
The specific percentage of your portfolio in each asset class will depend on your investor profile, as determined by your risk tolerance, investment goals, time horizon and personal preferences.
Each asset class is invested in a low-cost index-based exchange-traded fund (ETF), to provide broad market exposure at a low expense ratio. However, the U.S. equities portion will be held in a well-diversified sample of at least 70 individual stocks. This allows Empower to provide tactical weighing and tax optimization (read on for an explanation of both services).
Investment performance. Wealth Management publishes its investment performance on the website. The performance through 9/30/2020 is as follows:
Wealth Management Investment Strategies in Greater Detail
Tactical Weighing. This is an investment approach that improves on traditional indexing by maintaining more evenly weighted exposure to each sector and style. Backtests have indicated the strategy outperforms the S&P 500 by 1.5% per year, and with lower volatility.
Tax optimization. This is an investment strategy designed to lower the income tax liability resulting from your investing activities. It's a strategy using several techniques:
- Using ETFs rather than mutual funds, since they generate far less in terms of capital gains.
- Using individual stocks, since they can be easily bought and sold to generate tax-loss harvesting.
- Tax allocation is employed in which income-producing assets are held in retirement accounts, while capital gains generating assets are held in taxable accounts to take advantage of lower long-term capital gains tax rates.
Socially Responsible Investing (SRI). If you choose to incorporate SRI into your investing activities, specific investments are chosen based on their compliance with what is known as environmental, social, and governance, or ESG.
This means investments are chosen in companies based on their environmental impact, social impact (diversity and labor relations), and management. Management, or governance, is determined by management structure, board independence, and executive compensation levels. This will give you an opportunity to invest in what you believe in, while avoiding what you don't.
Related: Best Earth Day-Friendly Robo Advisors for Socially-Responsible Investing
Empower Wealth Management Features
Minimum initial investment: $100,000 ($200,000 for regular access to financial advisors)
Accounts available. Joint and taxable investment accounts; traditional, Roth, SEP, and rollover IRAs; trusts; advice only on 401(k) and 529 plans
Account custodian. Your Wealth Management portfolio will be held with Pershing Advisor Solutions, one of the largest investment custodians and clearing agencies in the world. The company acts as custodian for more than $1 trillion in assets worldwide.
Account protection. All accounts are protected by SIPC, for up to $500,000 in securities and cash, including up to $250,000 in cash. This coverage protects you against broker failure, and not against monetary losses due to market fluctuations.
Financial advisors. This is a major part of the Wealth Management service. Financial advisors are available by phone, email, live chat, or web conference on a 24/7 basis. As a client of the Wealth Management service, you'll have two dedicated financial advisors. They'll provide you with full financial and retirement planning, as well as college savings, and financial decision support on such topics as insurance, home financing, stock options, and even compensation.
Empower Wealth Management Fees. Fees for Empower Wealth Management are as follows:
|Asset under management||Annual advisory fee|
|Up to $1 million||0.89%|
|First $3 million*||0.79%|
|Next $2 million*||0.69%|
|Next $5 million*||0.59%|
|Over $10 million*||0.49%|
*Applies to clients who invest $1 million or more.
Empower Wealth Management Private Client Service
As you'll see in the screenshot below, Empowers services have four levels:
- Free the Financial Dashboard
- Investment Service the basic investment tools and services provided as part of the Financial Dashboard as well as investment management for portfolios of $100,000 to $200,000
- Wealth Management for investors with at least $200,000 to invest
- Private Client for investors with over $1 million to invest
Private Client provides a higher level of service for higher asset clients. In addition to offering lower annual advisory fees, you also get priority access to a certified financial planner and other financial professionals, private banking services, estate services, and collaboration with an estate attorney and CPA. Basically, it’s a much more personalized offering that also gives you priority access to many services on offer.
Additional Features and Benefits
Customer service. You can reach Empower by either phone or email, 24 hours a day, 7 days a week. This applies to both the free version and the Wealth Management service, but the Wealth Management service also comes with access to two live financial advisors. However, direct phone support is available Monday through Friday from 8:00 AM to 6:00 PM, Pacific time.
Mobile App. The mobile app is available for iOS and Android devices, as well as Apple Watch, and can be downloaded at the App Store or on Google Play.
Data export features. There is currently no capability to print reports from the Empower application. They promise the capability is in the pipeline, but cannot provide an estimated time of arrival.
However, you can export transactions. To do so, you need to log into the website or mobile app (iOS only) using either Chrome or Firefox. You then navigate to Transactions/All Transactions, then click on CSV to export the transactions.
Security. Empower uses the following security measures:
- The platform is read-only, so no withdrawals or transfers can be made
- Two-factor authentication
- Requires you to register any devices you use to access the platform
- Military-grade encryption (256-bit AES) to keep your data secure
- Firewalls and perimeter security
- Continuous monitoring
- Fingerprint scanning is available for iOS devices (but not Android)
Like many companies offering robo advisor services, Empower is getting into the banking game. Empower Cash™ pays 3.35% APY to start and 3.45% APY for Empower Advisory clients.
The account has no minimum balance, unlimited withdrawals, and sleek access through your phone. It also offers FDIC insurance of up to $1.5 million in deposits. But be aware that this account does not offer either debit cards or a bill payment capability.
How to Sign Up with Empower
You can sign up for Empower through the website. You start by providing your email and phone number, then creating a password.
You'll then be asked general information, including your name, age, age at which you plan to retire, and the amount of money you have saved toward retirement. (As indicated throughout this review, Empower has a strong orientation toward retirement.)
Once you’ve completed that information, you’ll begin linking your accounts. Empower syncs with more than 12,000 financial institutions, or you can simply enter your institution’s name and web address. Empower will analyze your financial accounts going back from one to three months. Based on the analysis, you’ll have access to all the tools on the Free Dashboard, as well as Empowers recommendations for your investment accounts.
If you want to sign up for the Wealth Management service, you can contact a financial advisor to get the process going (or wait a short while, and one will contact you). You'll be required to provide additional information, including documentation verifying your identity. You will then need to link one or more financial accounts to transfer funds into your Pershing account, which will hold your investments. Empower also allows you to transfer securities from other investment platforms.
You’ll complete a questionnaire that will determine your risk tolerance, investment goals, and time horizon. But you’ll also have a web conference with a financial advisor, where more specific information will be gathered. Your portfolio will be created based on your answers to the questionnaire, as well as the information provided to the financial advisor.
Empower Pros and Cons
Budgeting and investment management on one platform — Empower offers both personal financial management/budgeting, plus investment management on the same platform.
Free financial dashboard — The Financial Dashboard includes a large number of investment tools as well as budgeting capabilities, and is free to use. It will also provide investment advice for accounts beyond your Empower Wealth Management account.
Tax optimization — The Wealth Management service uses extensive tax optimization strategies to minimize the income taxes generated by your investments.
Financial Advisors — The Wealth Management service provides two financial advisors for each client, who can help you manage your entire financial life.
Socially responsible investing — If you consider yourself socially responsible and you want to make sure your investments align with your values, you can do that with Empower.
High minimum for Wealth Management — The minimum initial investment required for the Investment Service is $100,000, and the Wealth Management service is $200,000, which will eliminate small and most medium size investors.
Low interest rate on Empower Cash — The current yield is much lower than what is available through Betterment or Wealthfront and is barely competitive with local banks and credit unions.
Empower Cash lacks basic banking functions — The account does not offer a debit card or a bill payment capability, which makes it a weaker product offering than the competition.
Solicitation — If you sign up for the free version you will be solicited to upgrade to the Wealth Management service. Some users and readers have described this as “annoying”.
High fees — The fee of 0.89% most investors will pay for the Wealth Management service is much higher than robo-advisors, like Betterment and Wealthfront, who charge from 0.25% to 0.40%. But it does need to be pointed out that Empower provides investment management services closer to traditional human investment managers, rather than robo-advisors.
How do I know Empower Wealth Management won’t trade my account just to generate fees for the company?
Empower is a fiduciary. As such, they must act on behalf of your own personal interests. As well, there are no trading commissions, and no hidden fees of any kind. The annual advisory fee is the only fee you will pay.
Does Empower’s Wealth Management advisory fee apply to all the investment accounts I have on the Financial Dashboard?
Any accounts you link on the Financial Dashboard are included for free. The advisory fee applies only to the portion of your investments that are directly managed by Wealth Management. For example, if you include a total of $1 million on the Financial Dashboard, but only $400,000 is managed by Wealth Management, the advisory fee will apply only to $400,000, not to $1 million. The Financial Dashboard can still be used to analyze your other accounts, and make recommendations. This includes any employer sponsored retirement plans you have. Since Wealth Management doesn’t manage the account directly, there is no fee for including it in the Dashboard.
How does Empower’s Wealth Management differ from true robo advisors?
The Wealth Management service does use technology to manage your portfolio. That includes a large degree of automated investing, including periodic rebalancing. But Empower departs from pure robo advisors in that they will customize your portfolio based on your own circumstances and preferences. For example, you do complete a questionnaire when you sign up for the service, just as you would for a robo advisor. But your portfolio allocation will also be decided by input from your financial advisor, based on your personal interview.
Why should I invest my money with Empower when their annual advisory fee is so much higher than just about all the robo advisors?
The higher fee with Empower is due to a much higher service level. Not only do you have direct access to two financial advisors, who will help in both creating and modifying your portfolio going forward, but they’ll also provide holistic financial advice. That means they’ll help you with financial decisions that go beyond your investment portfolio. This can include estate planning and help with other financial situations, such as a home purchase or buying the right amount of insurance. Robo advisors don’t provide that level of service.
What is a fiduciary financial advisor?
A fiduciary financial advisor is an advisor with a fiduciary duty to their client. What this means is that the fiduciary has a legal (and ethical) obligation to act in their client’s best interests. Of course, Personal Capital’s human advisors are acting as fiduciaries.
One of the qualities that make Empower stand out from the competition is its combination of both budgeting capabilities and investment management. But is Empower really the best choice to provide investment management, and what can you do if you don’t have the minimum $100,000 required to take advantage of the wealth management service?
Fortunately, there are alternatives that, while they don’t offer budgeting capabilities, they do provide investment management services comparable to Empower, but at a much lower fee.
Betterment offers similar investment services to Empower, but they do it for a much lower annual fee. You can open an account with no money at all, then begin investing as you fund your account. You can have your portfolio managed for 0.25% on the Digital plan, which means a $10,000 portfolio can be professionally managed for just $25 per year.
And though Betterment doesn’t provide a personal advisor on its Digital Plan the way Empower does on its Wealth Management plan, you have unlimited access to certified financial planners if you select the Premium plan. That plan has a minimum balance requirement of $100,000, and an annual fee of 0.40%. But that is less than half the annual fee charged by Empower. And on all plans, you’ll get the benefit of tax-loss harvesting on taxable investment accounts.
Betterment has seriously expanded its product menu in recent years. They now offer socially responsible investing, a smart beta portfolio, and even a target income portfolio. And if that’s not enough, Betterment Cash Reserve and Checking provide you with a linked checking account, complete with a Visa debit card, a current interest yield of 2.25% APY, and FDIC insurance on your deposits for up to $1 million.
Very similar to Betterment, Wealthfront is a robo-advisor providing automated investment management at a much lower annual fee than Empower. The fee is identical to the Betterment Digital plan at 0.25% per year. And you only need $500 to open an account. Wealthfront builds your portfolio of a mix of funds invested in stocks and bonds, but they also include real estate and natural resources for broader diversification.
Wealthfront also offers specialized investment portfolios, like smart beta, a risk parity fund (loosely based on hedge fund investing), and socially responsible investing.
Banking features include the Wealthfront Cash Account, currently paying 4.55% APY on all balances with complete FDIC insurance up to $5 million. It also comes with checking account features, which allow direct depositing of paychecks, as well as the ability to pay bills and transfer funds to family and friends. You’ll also get a debit card to make purchases and access cash from ATMs. Meanwhile, Wealthfront’s Portfolio Line of Credit allows you to borrow up to 30% of the value of your account which must be a minimum of $25,000 at interest rates well below 4%.
Vanguard Personal Advisor
Vanguard Personal Advisory Services is a financial services platform that competes directly with Empowers Wealth Management platform. Vanguard PAS is another example of a hybrid robo-advisor/personal financial advisory service. In other words, you’ll have access to human advisors (most of whom are CFAs) to help you personalize your management plan and create an investment strategy that meets your goals.
Vanguard offers portfolios geared toward many different types of investors. Some of the most common include retirement, saving to buy property, college funds, and more. Clients aren’t limited to these selections and can work with an advisor to customize to their specifications.
Vanguard boasts impressively low rates compared to their direct competitors in this space. The minimum to open an account is $50,000, and Vanguard charges a 0.3% asset management fee on balances under $5 million (which gets progressively lower as balances increase past certain thresholds). There are no other account fees, making Vanguard’s transparency impressive.
Vanguard customers receive unlimited phone, email, or video appointments with their advisor, and are free to adjust their financial strategy at any time. One major difference is that low account balances ($50,000 to $500,000) work with a team of advisors, while high account balances ($500,000+) are assigned a personal advisor.
All things considered, it’s an impressive offering, and priced competitively within the hybrid robo space. It’s an attractive service offering that stacks up well against Empower.
Schwab Intelligent Portfolios
Intelligent Portfolios is Schwab’s hybrid robo/personal advisor offering, although it leans heavier toward the robo-advisor side than most competitors on our list. Schwab bills their service as automated investing with human help when you need it.”
Customers provide details on their investment goals upon signing up and the robo-advisor builds a diversified portfolio that automatically rebalances when needed. You can talk to a human when needed, but they will not give you personalized investing advice (opting for more general advice).
Because of the lower levels of personalized service, Schwab is able to keep costs a lot lower for Intelligent Portfolios. There is zero management fee, but customers do pay the expense ratios on ETFs in their portfolio. The account minimum is $5000 to get started.
The portfolios draw from 51 ETFs, and Schwab customizes a portfolio based on the details you provide initially. This includes your risk tolerance, investing goals, timeline, etc. Once the portfolio is set, investors are free to make changes as they see fit, or adjust their goals at any time.
Overall, if you’re looking for a hybrid advisor that leans heavier to the automation side, then Intelligent Portfolios is more what you’re looking for. Due to the lower reliance on human advisors, the fees are also much lower than most competitors we examined above.
Should You Sign Up with Empower?
One of the factors that makes Empower unique as a financial platform is that it operates as both a financial management service and an investment management service. We’ve provided the table below comparing Empower with popular budgeting and robo advisor apps to give you a side-by-side view of what each offers:
|Credit score monitoring||No||No||Yes||Yes||N/A||N/A|
|Fee for budgeting||$0||$6.99 per month||$34.99 to $99.99 per year||$0||N/A||N/A|
|Advisory fees||0.89% up to $1 million (lower on higher balances)||N/A||N/A||N/A||0.25% up to $100,000, then 0.40%||0.25% on all balances|
|Accounts available||Joint and taxable investment accounts; traditional, Roth, SEP and rollover IRAs; trusts||N/A||N/A||N/A||Joint and taxable investment accounts; traditional, Roth, SEP and rollover IRAs; trusts||Joint and taxable investment accounts; traditional, Roth, SEP and rollover IRAs; trusts|
|Mobile app||Android & iOS devices||Android & iOS devices||Android & iOS devices||Android & iOS devices||Android & iOS devices||Android & iOS devices|
|Invest in individual stocks||Yes||N/A||N/A||N/A||No||Yes|
Who Is Empower For?
Empower works for high net worth investors, who are looking for comprehensive personal financial management. They offer investment services comparable to robo advisors, but also provide direct big picture advice.
If you’re looking only for a budgeting service, Empower will not be the best choice. You’ll be better served by YNAB, Quicken or Mint. Mint is also a free service, but it includes credit score monitoring. And while YNAB and Quicken are paid services, both reconcile transactions, while Quicken provides bill payment and credit score monitoring.
Related: YNAB vs. Quicken
If you don’t have at least $100,000 to invest, you won’t be able to use the Empower Wealth Management service. You will also need a minimum of $200,000 to gain unlimited access to personal financial advisors. But if you do meet the minimum investment requirement, but just want automated investment management, and not overall financial advice, you may be better off working with a true robo advisor.
What Others are Saying
So you don’t rely entirely on my opinion of Empower, I have looked into what third-party sources are saying about the service.
The Better Business Bureau gives Empower high marks. Not only do they award it the highest-ranking A+ available (on a scale of A+ to F), but only six complaints have been filed against the company in the past three years.
TrustPilot gives Empower 4.3 stars out of five, based on 618 reviews. However, 73% of those reviews give Empower an excellent rating.
Meanwhile, Empower has garnered 4.5 out of five stars from nearly 14,000 Android users on Google Play, and 4.7 out of five stars from more than 28,000 iOS users on The App Store.
As highly rated as Empower is, it is my feeling that this is a service designed primarily for people who are floating somewhere in the middle of the financial spectrum.
I say that because while the platform offers valuable free financial tools, which are certainly a benefit to small investors, you’ll need at least $100,000 to take advantage of the wealth management service, and $200,000 to have unlimited access to financial advisors. If you have investable assets in this amount, Empower can work well. It will give you services comparable to traditional, human-guided investment services, but at a much lower annual fee.
But if you have less than $100,000, you’ll be better served by using one of the robo-advisor services, like Betterment or Wealthfront, which require little or no money to invest, and charge an annual management fee that’s only a fraction of what Empower charges.
Also, if you’re looking primarily for a budgeting app, Empower offers only limited capabilities. The better option will be to use a dedicated budgeting service, like YNAB, Quicken, or Mint.
How We Tested the Product
We tested Empower by doing a thorough review not only of the company website, but also third-party sources, like the Better Business Bureau and TrustPilot. We also considered reviews conducted by competing websites to make sure our evaluation of Empowers capabilities are accurate and comprehensive.
And naturally, we’ve compared Empower with competing products, such as the robo-advisors and budgeting apps listed in this review. After all, any product or service can only reliably be evaluated against its competition.
We determined that, when compared to traditional, human-guided investment management services, Empower comes up strong. But we feel that for the majority of consumers and investors, the better choice will be to use a combination of lower-cost robo-advisors and one of the dedicated budgeting apps.
Empower has a real advantage over traditional human investment advisors, who charge anywhere from 1% to 1.5% to manage your portfolio. If you’re looking for a similar service level, but you don’t want to pay those high fees, Empower is definitely the way to go.
Considering all that Empower has to offer, this is an investment platform that is well worth checking out.
DoughRoller receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. DoughRoller is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.
Empower Personal Wealth, LLC (“EPW”) compensates Webpals Systems S. C LTD for new leads. Webpals Systems S. C LTD is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC