Personal Capital Full Disclosures

Last updated on October 13, 2015

General Disclosures

This website ("Site") is operated and maintained by Personal Capital Corporation ("Personal Capital"). Personal Capital Advisors Corporation ("Personal Capital Advisors") is a subsidiary of Personal Capital Corporation. Personal Capital Advisors is an investment advisor registered with the Securities and Exchange Commission ("SEC"). Any reference to the advisory services refers to Personal Capital Advisors Corporation. Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC. Nothing on this Site should be construed as a solicitation or offer, or recommendation, to buy or sell any security. Financial advisory services are only provided to investors who become Personal Capital Advisors Clients ("Clients") pursuant to a written Client Account Agreement, which investors are urged to read and carefully consider in determining whether such agreement is suitable for their individual facts and circumstances. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS, FURTHERMORE, ALL INVESTMENTS INVOLVE RISK AND MAY LOSE MONEY. There can be no assurance that a hypothetical, or actual performance shown on the Site will lead to the expected results shown or perform in any predictable manner.

Performance Disclosures

Each comparative benchmark is a mix of total return for a portfolio of exchange traded funds intended to represent a blend of five major asset classes: US Equities, International Equities, US Bonds, International Bonds and Alternatives. Asset allocations of the comparative benchmarks are similar to respective Personal Strategies and serve as a reasonable benchmark for a basic long-term diversified approach with a similar risk level. All Personal Strategy returns are net of fees. The comparative benchmarks were amended in January 2015 to better represent the allocation of the asset classes in our composite personal strategies.

  1. Representative Benchmark: 57.3% US Equities (VTI), 28.7% International Equities (VEU), 3.4% US Bonds (AGG), 0.6% International Bonds (IGOV), 10.0% Alternatives (equal split VNQ/IAU/DBC). Inception Date 9/30/2011
  2. Representative Benchmark: 50.0% US Equities (VTI), 25.0% International Equities (VEU), 12.7% US Bonds (AGG), 2.3% International Bonds (IGOV), 10.0% Alternatives (equal split VNQ/IAU/DBC). Inception Date 9/30/2011
  3. Representative Benchmark: 41.7% US Equities (VTI), 20.8% International Equities (VEU), 23.4% US Bonds (AGG), 4.1% International Bonds (IGOV), 10.0% Alternatives (equal split VNQ/IAU/DBC). Inception Date 12/31/2011
  4. Representative Benchmark: 33.3% US Equities (VTI), 16.7% International Equities (VEU), 34.0% US Bonds (AGG), 6.0% International Bonds (IGOV), 10.0% Alternatives (equal split VNQ/IAU/DBC). Inception Date 12/31/2011
  5. Representative Benchmark: 26.7% US Equities (VTI), 13.3% International Equities (VEU), 42.5% US Bonds (AGG), 7.5% International Bonds (IGOV), 10.0% Alternatives (equal split VNQ/IAU/DBC). Inception Date 12/31/2011
  6. Representative Benchmark: 100.0% US Equities (VTI). Inception Date 9/30/2011

VTI - Vanguard Total Stock Market ETF - The investment seeks to track the performance of a benchmark index that measures the capitalization weighted investment return of the overall US stock market.

VEU - Vanguard FTSE All-World ex-US ETF - The investment seeks to track the performance of the FTSE All-World ex US Index, which measures the investment return of stocks of companies located in developed and emerging markets outside of the United States.

AGG - iShares Core Total US Bond Market ETF - The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Barclays U.S. Aggregate Bond Index (the underlying index).

IGOV - iShares S&P/Citigroup Intl Trsry Bond - The Fund seeks investment results that correspond to the price and yield performance, of the S&P/Citigroup International Treasury Bond Index Ex US (the Index).

VNQ – Vanguard REIT - The fund employs an indexing investment approach designed to track the performance of the MSCI U.S. REIT Index.

IAU – iShares Gold Trust – The trust seeks to reflect generally the performance of the price of gold.

DBC – Powershares DB Commodity Index Tracking Fund - The Fund is based on the DBIQ Optimum Yield Diversified Commodity Index Excess Return Index. The Fund invests in sectors, such as light sweet crude oil (WTI), heating oil, natural gas, Brent crude, gold, silver, aluminum, zinc, copper grade A, corn, wheat, soybeans and sugar.

SPY – SPDR S&P 500 ETF Trust - The investment seeks to track the price and yield performance of the S&P 500 Index. The S&P 500 is composed of 500 selected stocks and captures roughly 80% of available U.S. market capitalization.

For each composite personal strategy, quarterly and annual figures for 2012 were calculated as an average of actual client portfolio returns within those respective strategies. Only accounts trading for the full calendar year with no material additions or withdrawals were included. For Q4, 2011, only accounts trading for the full quarter were included. For both composite personal strategies and comparative benchmarks, full year, year to date, and since inception returns are derived by linking respective quarterly returns. Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance. All investments involve risk, including the potential for loss of principal. Performance is shown net of fees and reflects the reinvestment of interest and dividends. Personal Strategies generally employ investments in an array of individual securities and ETFs representing domestic equities, international equities fixed income and alternative investments such as real estate and commodities. Accounts in the composite are billed on a tiered fee schedule and larger accounts generally pay a lower overall fee rate than other accounts. Accounts with greater than ten percent individual custom restrictions resulting in greater than two percent difference in performance results were not included. Individual account performance will vary depending upon the amount of assets under management and the timing of any additions and withdrawals and may be higher or lower than the performance depicted. Performance for employee and other affiliated accounts has been recalculated to reflect full, standard fee schedules.

Blog & Third Party Disclosures

Personal Capital’s blog is for informational purposes only and does not constitute a recommendation to buy or sell securities. You should not rely on this information as the primary basis of your investment, financial, or tax planning decisions. You should consult your legal or tax professional regarding your specific situation. Certain sections of this commentary may contain forward-looking statements that are based on our reasonable expectations, estimate, projections and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict.

This Site may contain links to other websites, including links to the websites of companies that provide related information, products and services. Such external Internet addresses contain information created, published, maintained, or otherwise posted by institutions or organizations independent of Personal Capital. These links are solely for the convenience of visitors to this Site, and the inclusion of such links does not necessarily imply an affiliation, sponsorship or endorsement. Personal Capital does not endorse, approve, certify, or control these external Internet addresses and cannot guarantee or assume responsibility for the accuracy, completeness, efficacy, timeliness, or correct sequencing of information located at such addresses. The performance and composite information shown on this Site uses or includes information obtained from third party sources. Third party data is obtained from sources believed to be reliable but Personal Capital cannot guarantee currency, accuracy, timeliness, completeness or fitness for any particular purpose.

Investment Checkup Disclosures

The Investment Checkup is intended to provide insight based on the accounts you have aggregated on the Personal Capital dashboard and other information you have provided. Because there is no way to know all information about your finances or your personal situation, comments or analysis may be incomplete or inaccurate. All insight provided represents a courtesy extended to you for educational purpose and you should not rely on this information as the primary basis of your investment, financial, or tax planning decisions. You should consult your legal or tax professional regarding your specific situation.

Comparative analysis, including Monte Carlo analysis, is intended to illustrate hypothetical performance of various allocation strategies based on a long-term historical asset class performance and is not meant to imply actual performance or results.

Much of the analysis does not include taxes or fees, which can have a material impact. It is not possible to invest directly in an index without incurring expenses, which will lower the actual return.

Investment Checkup includes content supplied by companies that are not affiliated with Personal Capital. Please refer to Investment Check FAQ for additional information, including data sources.

Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance. Keep in mind investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Retirement Fee Analyzer Calculations Disclosure

There are many elements to retirement fees, some are more clearly disclosed than others. The key components to the costs associated with a retirement accounts are

  1. The fees for the funds that you are invested in. These are indicated in the expense ratio column and are based on the fees as disclosed by the fund providers
  2. Plan administrative and advice fees. These are the fees that are passed on to you from the plan administrator and cover record keeping and advice. They can range from 0 in very large plans, to over 1% in plans for smaller companies. We provide a slider that you can move to represent the fees charged by your plan administrator. You can change this number to match your plan administrative and advice fee. For 401k’s it should be available in the recently required disclosure statement or from your company's benefits administrator.
  3. Unpublished fund fee data. Specialty funds sometimes charge fees that can range from .5 to over 3% and are not plainly disclosed. For 401k’s this data should be available in the recently required 401k disclosures statement and on your plan administrator’s website. We allow you to set the fund fees for the group of funds for which there is no publicly available data.

We use your current age and retirement account balances as a starting point for estimating the impact of fees on your retirement goals. We factor in the typical retirement age, expected future contributions, an estimate of inflation and return on investment based on historical trends, matching or supplemental contributions from your company and spouse, and lastly fund, administrative and advice fees, some of which are based on specific funds you currently own in your account(s). From this data we calculate your estimated total retirement contributions, earnings and the effect of fees on your total return over time and present this information graphically so you can easily see what you would have in retirement before and after fees. The information provided is for informational purposes only and is based on certain assumptions and historical data. Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance. You may wish to seek the advice of a professional in planning your retirement.

Retirement Planner Disclosures

The calculations in Retirement Planner are based solely on information provided by the user, data based on the accounts that users have aggregated on the Personal Capital dashboard, historical market returns and the assumptions shown or selected. Because there is no way to know all information about your finances or your personal situation, analysis may be incomplete or inaccurate. All insight provided represents a courtesy extended to you for illustrative purposes only and you should not rely on this information as the primary basis of your investment, financial, or tax planning decisions. No representations, warranties or guarantees are made as to the accuracy of any estimates or calculations. Personal Capital is not liable for any damages or costs of any type arising out of or in any way connected with your use of this calculator. The information provided in Personal Forecast does not serve, either directly or indirectly, as legal, financial or tax advice and you should always consult a qualified professional legal, financial and/or tax advisor for your specific situation. Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance and future returns may be less favorable or negative. Keep in mind investing involves risk.

Calculation Assumptions

This Retirement Planner tool is intended to provide a basic sense of how your portfolio may grow and support your stated spending goals. It also gives you an easy way to see how adjustments to the most important variables (saving rate, spending rate and retirement age) can impact you. All results are presented in today’s dollars, inflation adjusted at 4.0% unless changed by the user. Projections utilize Monte Carlo simulation, with the median scenario and 10% worst cash scenarios highlighted. The portfolio survival percentage represents the percent of the simulations which ended age 92, or the selected life expectancy age, with a balance above $0. Growth and volatility assumptions are based on historical asset class returns and correlations using the users aggregated asset allocation or a moderate, well diversified asset allocation with 8.4% annual return and 11.4% standard deviation of return, if not available.

Data sources: Ibbotson Associates, MSCI, Standard & Poor’s, World Gold Council, BP.com, US Energy Information Administration, Robert Shiller Online, MIT Center For Real Estate, Yahoo Finance. Calculations are based on the long-term historical performance of asset class proxies: S&P 500, MSCI EAFE until 2000 and MSCI ACWI ex-US post 2000, 10 Year U.S. Treasuries, 10 Year Foreign Government Bonds, and 30 Day T-Bills. Alternative asset class represented by a hypothetical index of 50% real estate and a 50% gold/oil combination. Portfolio standard deviation, correlation, and expected returns are based on average annual performance included in source data: domestic equities since 1926, international equities since 1970, domestic and international fixed since 1926, alternatives since 1970 and cash since 1926.

Returns do not account for fees or trading costs. It is not possible to invest directly in an index. We chose a default inflation number higher than current levels to help account for low current interest rates which may lead to lower future investment returns, as well as the impact of fees. For simplicity, we assume no taxes on portfolio growth, but tax all portfolio withdrawals (spending above income) at 20% unless edited by the user. While not precise, we believe this is an effective way to roughly approximate the impact of taxes regardless of the composition of assets in taxable or tax-deferred retirement accounts.

Fee and Account Disclosures

Recommendations and fees may vary for each Client. Advisory fees are calculated based upon the amount of assets being managed (as detailed further in Personal Capital Advisors’ Form ADV Part 2).

Personal Capital Advisors does not make any representations regarding the execution quality of orders placed with our brokerage partner. However, Personal Capital Advisors does monitor the execution quality of transactions to ensure that Clients receive the best overall trade execution pursuant to regulatory requirements.

Tax and Tax-loss Harvesting Disclosures

Personal Capital Advisors does not represent in any manner that the tax consequences described as part of its tax-loss harvesting activities will be achieved or that Personal Capital Advisor's tax-loss harvesting activities will result in any particular tax consequence. The tax consequences of the tax-loss harvesting activities that Personal Capital Advisor may pursue are complex and uncertain and may be challenged by the IRS. The information with regard to this activity was not prepared to be used, and it cannot be used, by any Client to avoid penalties or interest.

Clients should confer with their personal tax advisors regarding the tax consequences of investing with Personal Capital Advisor and engaging in the tax-loss harvesting activity, based on their particular circumstances. Clients and their personal tax advisors are responsible for how the transactions conducted in an account are reported to the IRS or any other taxing authority on the Client’s personal tax returns. Personal Capital Advisor assumes no responsibility for the tax consequences to any Client of any transaction. We are not tax professionals. Clients should consult qualified legal or tax professional, such as a tax attorney or CPA regarding their specific situation.

Additional Services Disclosures

Personal Capital Advisors Corporation is a registered investment advisor with the Securities Exchange Commission (“SEC”). Any reference to the advisory services refers to Personal Capital Advisors Corporation. SEC Registration does not imply a certain level of skill or training. While we can offer a consultation on the financial aspects of these important decisions, it is important that you consult a qualified legal, tax or insurance professional regarding your specific situation.

Trademarks

Personal Capital and its bar logo are registered trademarks of Personal Capital Corporation. The other third party marks displayed are trademarks or registered trademarks of such third parties, and the use of such trademarks herein does not imply an association with those third parties or an endorsement of any third party goods or services.