Our Take

Empower offers a vast array of free investment management analytical tools in addition to its fee-based wealth management platform. Formerly known as Personal Capital, Empower offers a vast array of financial planning, retirement management, and investment related services. Not officially a robo-advisor, Empower considers itself an automated investment manager with a strong human element, similar to a traditional financial advisory firm. 

Anyone with money should consider signing up for Empower's free financial and investment management tools. Those with $100,000 of investable assets seeking a full service financial planning firm will find a wide array of investment and financial planning guidance through the wealth management service, led by the company’s stable of licensed financial advisors. The opportunity for those with $100,000 or more to receive a no-obligation investment analysis and chat with an advisor is a solid incentive to give Empower a look. We will review the Empower platform and delve into the free and paid financial advisory services to determine if it is a good fit for you.

Pros & Cons

Account Overview

Account Minimum	$100,000
Fees	$100,000 to $1 million: 0.89% AUM First $3 million: 0.79% AUM Next $2 million: 0.69% AUM Next $5 million: 0.59% AUM Over $10 million: 0.49% AUM
Goal Setting	Work with a financial advisor to customize goals
Available Assets	Mostly focused on ETFs, but individual stocks and bonds, REITs, gold, commodities, and private equity are also available
Interest Paid on Cash Balances	4.70%
Customizable Portfolio	Yes
View Portfolio Before Funding	Yes
Customer Service	Phone support and email
Financial Advisor Available	Yes: $100,000 to $250,000: Work with the team of advisors $250,000 and up: 2 dedicated financial advisors
Cash Management	Yes: Empower Personal Cash
Tax-Loss Harvesting	Yes
External Account Sync/Consolidation	Yes
Mobile App	Android and iOS

Account Setup

Sign up and create an Empower account by providing an email, password, phone number, birth date and basic financial information. To use the free investment management tools and the paid advisory service, you’re required to schedule a brief, no-obligation phone call with a financial advisor. This is a small price to pay for the use of the robust suite of financial tools.  Next, link your financial accounts, or you can manually input them. This enables you to use the comprehensive, free financial management calculators and tools as well as provide information for the financial advisor.  The next step enables you to link your accounts. This process is fast and secure and you can add most financial accounts, including:

• Bank
• Investment
• Debt
• Credit card
• Manually entered categories
• Home mortgage

After syncing your financial accounts or manually inputting your data, you can access the free financial tools and reports described in detail below. These free budgeting, saving, spending, and retirement planning reports are available to anyone, while those with more than $100,000 to invest are eligible for Empower Wealth Management.

Those with more than $100,000 interested in a free investment analysis and/or signing up for the service answer a few intake questions which cover financial situation, goals, and risk comfort level. You’ll receive a personalized financial plan. To sign up for the Empower Wealth Management service, you’ll proceed to open an account at the fund’s custodian and transfer your assets. Along with your advisor, you can explore the available customization options to craft a suitable investment mix for you. 

Goal Planning

The customized Empower goal planning features rival Betterment’s granular goal planning features. Wealth Management goal-setting for clients is customized and starts with a conversation with your licensed financial advisor. Although retirement is a popular goal, clients can invest for any goal such as saving for college tuition or a vacation home. 

The free tools test in-depth retirement planning scenarios. The retirement simulator projects your income and spending during both the accumulation and distribution phases of life to reveal best- and worst-case expectations for meeting your long-term retirement needs.  Empower Wealth Management clients benefit from ongoing monitoring of goals with their financial advisor with the opportunity for revisions along the way as your life evolves.

Account Services

Empower’s Services fit into three categories: Free financial planning and analysis, fee-based wealth management services, and private client services.

Free Financial Planning and Analysis

Anyone can sync their financial accounts and access Empower's financial planning software. The calculators and tools encompass:

• Retirement planner
• Savings planner
• Retirement fee analyzer
• Investment checkup
• Budgeting, cash flow, and net worth tracking

The investment checkup analyzes your asset allocation and suggests ways to increase returns and lower risks. It also looks at your investment fees and suggests replacing high-fee funds. The retirement planner allows you to adjust inputs and investigate the success of various retirement scenarios. The retirement planner delves into scenario analysis and customized guidance. We found the calculators and tools incredibly helpful and, thanks to account syncing, they provided very individualized and actionable insights.

Fee-Based Wealth Management Services

Empower financial management services are spearheaded by the financial advisor and offer typical investment and money management services. The services vary, depending upon your asset level. 

Wealth Management Tiers
Tier	Requirements	Benefits	Access to Financial Advisors
Investment Services	$100,000-$250,000 in investment assets	Unlimited advice and retirement planning help, professionally managed ETF portfolio	Team of financial advisors
Wealth Management	$250,000-$1 million in investment assets	Access to specialists in real estate, stock options, and more; customized portfolio; tax optimization through individual stock allocations	Two dedicated financial advisors
Private Client	Over $1 million in investment assets	Priority access to specialists and investment committee, in-depth specialist support for retirement and wealth planning, private equity investments (with more than $5 million invested)	Two dedicated financial advisors

Cash Management

The Empower Personal Cash account is managed through UMB bank and doesn’t require a minimum balance. The account is comparable with the highest return cash accounts available online and the high yield varies with market interest rates. It currently offers 4.70% APY. The FDIC insurance is capped at $5 million and is provided by partner banks. 

Features of this account include:

• Paycheck direct deposit
• Unlimited monthly transfers via ACH transfer
• Withdraw up to $100,000 per day
• No required minimum
• Individual and joint accounts
• Link to your checking account for bill pay
  

Portfolio Construction

Empower personalizes the portfolio construction process and uses your aggregated financial accounts and your personal goals and risk tolerance level to select an investment strategy. Unlike many competitors, the Empower portfolios use a “smart weighting” approach which equal-weights equity sector exposure as opposed to a market capitalization asset class weighting. The typical market-cap weighting replicates portfolio sectors by number of shares multiplied by share value and tends to overweight the largest companies and sectors. The firm’s smart weighting equally weights assets based on size, sector, and style. This portfolio construction strives to provide a higher risk-adjusted return than the market cap-weighted allocation.

When constructing portfolios, the Empower computerized algorithm considers:

• Time horizon, goals, and liquidity needs
• Current net worth and income
• Age
• Desired lifestyle, personal beliefs, and dependents
• Expenses including mortgage and educational expenses
• Marginal tax rate and tax laws
• Risk tolerance
• Legacy goals
• Future pensions and Social Security

The data synced to Empower and discussed during the call with the financial advisor gives Empower more to work with than most digital investment advisors have. This data provides a distinct diversification model that ends up being more comprehensive than many other algorithm-based platforms. The asset allocation employed in the Empower strategy includes varying allotments to the following asset classes:

• ETFs for both stocks and bonds in varying styles, sizes, and sectors
• U.S. stocks, including varying styles, sizes, and sectors
• International stocks, including developed and emerging markets
• U.S. bonds, including diverse government and corporate bonds of varying credit quality
• International bonds of varying credit quality
• Alternatives, including real estate and commodities
• Cash

Available Assets
Individual Stocks	Yes
Mutual Funds	No
Fixed Income	Yes
REITs	Yes
Socially Responsible or ESG Options	Yes
ETFs	Yes
Non-Proprietary ETFs	Yes
Crypto, Forex	No

Portfolio Customization

Customization is an area in which Empower excels. Driven by the client and financial advisor, customization accommodates your tax situation and unique preferences. Clients can request distinct asset allocations, a socially responsible option, additional individual stocks to supplement ETFs, exclusions of individual stocks, restricted buy or sell lists, replacement ETFs or stocks, special tax-influenced strategies, and more. Wealthier clients can access alternative and private equity investments as well. 

Portfolio Management

Nearly all robo-advisory portfolio strategies are driven by the seminal research of Harry Markowitz which creates an efficient frontier graph. Back in its Personal Capital days, Empower had Harry Markowitz as an advisor to the board and this influenced how seriously the company takes true diversification. Individual portfolios are selected based upon the client’s risk-tolerance levels. The appropriate balance of stock and bond investments is chosen to deliver the highest return for an investor's given risk level. 

When portfolios deviate from the predetermined stock vs. bond mix, they are rebalanced back to their original percentages. This is usually done by selling a proportion of the overperforming assets and buying more of the underperformers.  Taxable accounts at Empower are eligible for tax-loss harvesting, which is a process of selling losing positions and offsetting realized taxable gains with the losses. This minimizes tax liabilities, thereby increasing aggregate investment gains. Municipal bond funds are also included to provide tax-exempt cash flow. 

Key Portfolio Management Features
Automatic Rebalancing	Yes, as needed
Reporting Features	Dashboard, monthly statements, tax documents, and custom reports
Tax-Loss Harvesting	Yes
External Account Syncing/Consolidation	Yes; all external accounts including investment, bank, debt, and custom are available

User Experience

Desktop

The Empower user experience is among the best of the robo-advisory group. Every important section of the website can be accessed within one click from a home page menu item. The menu items and categories make navigation a breeze. From the home page, you can quickly go to the following areas.

• Overview: Dashboard, net worth, transactions
• Banking: Cash flow, budgeting, bills
• Investing: Holdings, balances, performance, allocation, U.S. sectors
• Planning: Retirement planner, savings planner, retirement fee analyzer, investment checkup 
• Wealth Management: Advisor and currency educational portal
  

Mobile

The mobile app includes the Empower automated investment manager and the free financial advice tools. This Empower review excludes the other Empower verticals such as 401k management.  The mobile app is available for iOS and Android and offers account management, Empower Personal Cash, and many of the portfolio analysis tools. It’s also accessible on your wearable device. As with the desktop version, users can track cash flow and investments and use the retirement planning features. The app also provides personalized insights such as how much you’ve saved this year. A few desktop features are lacking on the app. In addition, there are some issues with account sync and a lack of accurate current data reporting, particularly on the Android app.

Customer Service

• Phone
• Email
• Telephone and virtual meetings with advisors
• Comprehensive FAQs

Customer service is above average at Empower. Users can contact the company by phone and via email. Advisory clients can email and phone their investment representatives to schedule either virtual or telephone meetings. The FAQs are comprehensive and well-categorized. Chat is not available, although there is a chatbot for clients. Empower Personal Cash directs users to contact the company via email. 

Security

The platform employs the highest security protocols. Multiple layers of security protect users' accounts, money, and information. The encrypted client login is not available to company employees. The unique Empower Security Guarantee states that the company will “restore losses to your account that occur as a result of unauthorized transactions through no fault of your own.”

Security protocols include:

• Two-factor authentication
• Firewalls and perimeter security comparable with banks and payment cards
• 256-bit AES data encryption
• Empower doesn’t sell your data.
• Empower carries Securities Investor Protection Corporation (SIPC) insurance up to $500,000, which includes $250,000 for cash. Many other firms offer excess insurance to cover company malfeasance and/or bankruptcy. As is standard across the industry, there is no type of insurance that can protect your account from losses due to the investment markets.
• Cash accounts carry FDIC insurance through partner banks up to $5 million in losses due to bankruptcy or malfeasance.

Education

The Empower educational content is weak. It appears as though all of the articles from the prior Personal Capital blog have been removed. The current “Currency” blog has five articles. The Empower YouTube channel includes a hodgepodge of 55 videos including testimonials, commercials, and a handful offering educational content. Empower users will need to look elsewhere for investment education content. 

Commissions and Fees

Empower’s money management software is available for free and is well worth checking out.

Empower charges fees based on assets under management. There are no commissions or transaction fees. This fee covers advice on all of a client's assets, not only those managed through Empower. 

Managed Assets	Annual Fee
$100,000 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%

Empower's cost is higher than most competitors with financial advisors, such as Betterment, Schwab Intelligent Portfolios Premium, and Vanguard Personal Advisors. Empower considers itself more of a replacement for a traditional financial advisor and less of a typical robo-advisor.

Final Verdict

Empower offers high-level investment analysis software for the low cost of a phone call with a company representative. For those with $100,000 or more in investable assets, the opportunity for an investment review and conversation with a licensed financial advisor is quite valuable. This opportunity makes checking out Empower a viable strategy. The high-yield, fee-free cash account is also a worthwhile place for short-term cash needs.  The paid wealth management services are best compared with those of a traditional financial advisory service. The 0.89% investment management fee is lower than some traditional financial advisory firms and in line with others. The smart-weighting diversification model, unlimited access to financial advisors, tax-minimization strategies, portfolio customization, and goal-focused strategies are worth investigating. Empower makes it easy to decide whether to invest with the company or not with accessible access to financial advisors and responsive customer service.

Is Empower Legit?

Empower is a legit financial advisory firm. The fee-free cash account and financial analysis tools are also the real deal. Anyone who wants to analyze their spending habits, track their net worth, and do some retirement planning might check out Empower.

Does Empower Have High Fees?

When compared with the average fee of 1% of investable assets charged by traditional financial advisors, the fees are reasonable. If you’re comparing the Empower 0.89% AUM fee to robo-advisors with human financial advisors like Betterment, SigFig, or Schwab, then the fees are high.

What Bank Does Empower Use?

UMB Bank is Empower’s main bank. However, your Empower Cash funds may also be transferred to other FDIC-insured banks.

How Do You Get Money From Empower?

If you have more than $100,000 and hire Empower wealth advisory service, your goal will be to grow your assets through investing. Over time, when investing in the stock and bond markets, your initial investment is likely to increase in value. But it’s important to understand that unlike money in a savings account, invested dollars in financial investment markets can increase and decrease in value during the short term. History has demonstrated that during longer periods, such as five or more years, your invested money is likely to grow.

How We Rate Companies

For the Investopedia 2023 Best Robo-Advisors reviews, we revamped our comprehensive rating methodology to reflect the ever-changing landscape of digital wealth management companies and their increasingly competitive product offerings. As part of our commitment to score each platform on an apples-to-apples basis, we excluded Vanguard Personal Advisor, Empower, and J.P. Morgan Personal Advisors from our quantitative ranking model because their emphasis on human advisory services prevents them from being pure digital robo-advisor platforms.

Offering a powerful mix of digital and human advisory services, Vanguard Personal Advisor, Empower, and J.P. Morgan Personal Advisors are three of the top hybrid wealth management companies in the industry. In order to rate these platforms, we used our subject matter expertise to develop a separate discretionary star rating system based on the following categories: account services, account setup, customer service, fees, goal planning, portfolio contents, portfolio management, security, education, and user experience.