© 2019 SourceMedia. All rights reserved.

New $50M for Personal Capital clears path for growth

Personal Capital has received another financial boost from its deep-pocketed main investor, allowing the hybrid digital advice platform to expand its market reach and add more even more advisors.

The firm said it raised $50 million in Series F funding from Canadian investment giant IGM Financial, bringing its total funding over nine rounds to more than $255 million.

Personal Capital CEO Jay Shah says the additional funding was not out of need, rather “it’s a signal of the powerful business we’re building.”

“We have an opportunity with this investment to vault ourselves forward, and it further underscores our mission to grow faster,” he says. “This is an expression of a vote of confidence in our model, our technology, our people. Digital wealth management is the direction of the industry.”

Shah added that the funding was based on an “upward valuation,” of Personal Capital, but did not disclose the new valuation of the company.

The hybrid now claims $8.5 billion in assets under management and two million registered users on its platform. Through its free financial planning tool, the digital wealth management startup claims it is tracking “more than $650 billion in aggregated account value.”

Jay Shah

With the new cash infusion, Shah says that the digital-first wealth manager will continue to fund an expansion of market reach and advisor growth.

In addition to moving into new headquarters in Redwood City, California, Personal Capital in October opened up offices in Atlanta, adding to its locations in Denver, Chicago, Dallas and New York.

Shah says that the firm will add more CFPs and advisors licensed in Series 65 and Series 66 licenses. Currently the firm employs 140 advisors. “It’s not a headcount growth goal, it’s a broader distribution goal of what we’re doing,” he says.

Part of that broader distribution could include serving clients outside of its recent mass affluent and high-net-worth focus, Shah says. Currently, the hybrid has account minimums of $100,000 and starting fees of 89 basis points, though earlier it offered service to clients with $25,000.

Shah expressed confident its clients will remain loyal even as stock volatility rattles some investors.

"We advocate our clients to build a plan, play the long game for those goals and stick to their business,” he says. “What we're seeing as a result of that message is a resiliency of our clients, and therefore a resiliency of our business.”

Unlike other digital advice platforms, the Bay Area hybrid enjoys consistent support from the financial services arm of a multinational. Montreal-based conglomerate Power Corporation of Canada, though IGM, has invested in Personal Capital since 2016.

Among Power Corp.’s holdings are Canadian robo advisor Wealthsimple and Boston-based asset manager Putnam Investments.

“We remain extremely excited about how Personal Capital is changing the wealth management landscape and the company’s role within our broader fintech growth strategy,” said Jeff Carney, President and CEO of IGM Financial, in a statement.

“As the fintech space gets more crowded, Personal Capital is uniquely positioned with its offering of smart technology accompanied by human advice for mass affluent and high-net-worth clients.”

Shah says the hybrid is constantly surveying how its competitors are evolving. Betterment recently announced it, too, was adding space outside its New York home.

“We’ve seen around us new entrants and incumbents are pivoting to this model,” Shah says. “We see others assembling and trying to crowd into the space. We’re working on the ongoing evolution of our business instead of playing catch-up.”

For reprint and licensing requests for this article, click here.