Empower Personal Strategy Benefits

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Every financial service has its pros and cons. Let’s break down where Empower Personal Strategy shines and where it might fall short:

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Advantages of Empower Personal Strategy

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Personalized, Fiduciary Advice

You get access to credentialed financial advisors who are fiduciaries. This is a big step up from purely robo-advisors. For investors who value human insight, this service provides guidance on investments, retirement planning, and even complex needs like tax and estate planning for high-net-worth clients. It’s like having a financial coach on call.

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Comprehensive Financial Planning

Empower goes beyond just investing your money. The fee includes unlimited financial planning services – you can discuss retirement goals, saving for college, insurance, debt payoff strategies, and more with your advisor‍. Many traditional advisors charge extra (or hourly) for planning, but Empower’s one all-in fee covers it. This holistic approach means your investments and financial goals are aligned under one plan.

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Tax Efficiency & Low Fund Fees

The platform actively works to reduce your tax bill. It uses strategies like tax-loss harvesting and asset location. These can potentially add significant net returns over time. Additionally, Empower’s portfolios favor ultra low-cost ETFs – with an average expense ratio of ~0.07%. This means you keep more of your money working for you instead of eroding in fees.

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User-Friendly Tech and Tools

Clients can take advantage of Empower’s highly rated Personal Dashboard app and tools. Even if you’re not a DIY investor, it’s empowering (no pun intended) to see all your accounts in one place and track progress. The interface is modern and the tools  give you real-time insight into your finances. NerdWallet even noted Empower’s website/app is “very easy to navigate”, which is great for less tech-savvy users.

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Strong Investment Methodology

Empower’s investment approach is grounded in research. Portfolios are globally diversified and use a “Smart Weighting” approach to avoid over-concentration in mega-cap stocks. You also have options like a Socially Responsible Investing portfolio if you prefer an ESG focus. And unlike many robo-advisors, at higher tiers they will include individual stocks (for tax-loss harvesting benefits and customization). It’s a robust strategy that can be as sophisticated as what you’d get from a traditional wealth manager.

Empower Personal Strategy Drwabacks

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Where Empower Personal Strategy Falls Short

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High Minimum Investment

With a $100,000 minimum to even enroll, this service simply isn’t available for beginners or those still building wealth. It targets high-net-worth individuals. If you have, say, $50k to invest, you’ll have to stick with Empower’s free tools or look at other platforms until you cross that threshold.

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Above-Average Management Fee

0.89% annual fee on your managed assets is considerably higher than pure robo-advisors. While Empower argues the fee is all-inclusive, it will eat into returns. For example, on a $500,000 portfolio, 0.89% is $4,450 per year – you need to feel you’re getting that much value. For comparison, Vanguard’s Personal Advisor Service charges about 0.30%, and Betterment’s premium plan is ~0.40%. Empower is one of the pricier options in this space.

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Tiered Services

Some of the most advanced features, like direct estate planning support and specific tax strategies, require $1M+ invested. While it’s great that those exist, it means if you’re just at the $100k level you might not see all the bells and whistles. In fact, under $250k, you don’t get dedicated named advisors (you’ll work with a team), which might feel less personal. There’s a sense of “the more you invest, the better the service,” which can be a drawback if you’re near the lower end of eligibility.

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Must Use Empower’s Custodian

To use Personal Strategy, you have to move your investable assets to Empower’s custody. This is common for managed accounts, but it means you can’t, for example, keep your IRA at Fidelity and have Empower manage it – you’d need to transfer it. For some, that’s a bit of an inconvenience. Empower does advise on outside 401(k)s and such without managing them, but any money they directly manage has to be transferred in.

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Not Focused on Small Goals or Specific Advice Only

Personal Strategy is a comprehensive, ongoing service – which is great if you need a broad financial plan. But if you’re someone who just wants one-time advice or a financial plan and then to manage things yourself, this service might be overkill. In that case, seeking a one-time consultation with a CFP or using Empower’s free tools might suffice until your needs grow. Similarly, if your main interest is stock-picking or hands-on trading, Empower won’t accommodate that – it’s a managed portfolio, not a self-directed account.

Who Should Choose Empower Personal Strategy?

Empower Personal Strategy can be a fantastic solution for some investors – but it’s not for everyone. Here’s a quick guide to who might fit the bill:

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Great for:

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• High-Net-Worth Investors who Want Guidance: If you have substantial assets (six figures or more) and you value professional advice, Empower Personal Strategy offers a one-stop-shop. It’s particularly beneficial if you intend to be hands-off with investing but still want to ensure everything is optimized. You’ll get peace of mind from knowing experts are watching your portfolio and are a phone call away.

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• People Seeking a Full Financial Plan: Do you need more than just basic investing? For example, planning for retirement, college funding, mortgage payoff strategy, tax optimization, estate planning – all at once. Empower’s advisors can coordinate all these aspects for you. If you’re at a life stage where finances are complex, having this integrated service can save time and potentially costly mistakes.

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• Former Personal Capital Users Upgrading: If you loved Personal Capital’s free tools and have grown your net worth to the threshold, transitioning into Personal Strategy is smooth. You keep the familiar dashboard and simply add on human advice. Essentially, it unlocks more value from a platform you’re already comfortable with.

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• Those Comparing to Traditional Advisors: Let’s say you’re considering hiring a local financial advisor who charges ~1% and might not give you a comprehensive online dashboard. Empower Personal Strategy could be an appealing alternative – the fee is in the same ballpark, but you get the tech benefits and a whole team of specialists backing your advisor. In other words, it’s a modern twist on wealth management that might suit tech-savvy investors who still want human help.

Who Shouldn’t Choose Empower Personal Strategy?

Not ideal for:

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• Beginners or Those Below $100k to Invest: This is a hard cutoff – if you don’t meet the minimum, you simply can’t use the service. But even if you have, say, $110k, you might ask if paying ~$980/year in fees is worth it at that level. Many investors with lower balances might grow wealth faster by using low-cost robo-advisors or index funds on their own.

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• Fee-Sensitive Investors: If fees make you cringe, know that Empower Personal Strategy is one of the pricier options. For folks who are comfortable handling basic investing themselves or with a cheaper robo-advisor, that 0.89% could feel like a big drag on returns. For example, Betterment’s 0.25% fee with no minimum is far lower, and even their premium 0.40% plan undercuts Empower by a wide margin. If you just need a decent portfolio and occasional guidance, a lower-cost service could suffice.

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• Do-It-Yourself Investors: Are you someone who enjoys picking your own stocks, rebalancing your portfolio, or timing the market? Empower’s service will likely frustrate you – it’s a discretionary managed account, meaning their advisors and algorithms call the shots. You’d have to relinquish control. DIY investors might prefer Empower’s free tools while investing on their own, or a brokerage that offers more flexibility.

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• Clients Wanting Local/Face-to-Face Interaction: Empower’s advisors are accessible by phone or video, but if you prefer sitting across the table from your advisor, this is not that model. Some people have complex situations or simply a comfort level that leads them to prefer an in-person relationship. Empower is primarily a remote service, so consider if you’re okay with that format.

FAQ – Empower Personal Strategy

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Is Empower Personal Strategy a robo-advisor?
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No. Empower Personal Strategy is not a pure robo-advisor – it’s a hybrid service. It uses robo-advisor technology for automated portfolio management plus gives you access to human financial advisors for personalized advice. In practice, your money is managed with algorithms (like a robo), but you can talk to real advisors anytime for planning, questions, or adjustments. This hybrid model offers a more hands-on experience than typical robo-advisors.

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Does Empower Personal Strategy charge high fees?
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Yes, the fee is higher than most robo-advisors. Empower Personal Strategy charges an annual management fee of 0.89% on your assets. There are no additional trading fees or hourly planning fees – that 0.89% covers everything. By comparison, purely automated investing services often charge ~0.25% or less. Empower’s fee is closer to a traditional financial advisor’s fee, because it includes unlimited human advice and comprehensive planning. For larger balances, the percentage fee does drop. It can be worth it if you actively use the advisors and services, but if cost is your top priority, there are cheaper options.

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What is the minimum investment for Empower Personal Strategy?
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Yes, there is a minimum. You need at least $100,000 in investable assets to open an Empower Personal Strategy account. This minimum can be met by combining multiple accounts (for example, a $80k IRA + $20k in a taxable account could qualify if transferred to Empower). If you’re below that threshold, you can still use Empower’s free Personal Dashboard tools, but you won’t be eligible for the paid advisory service. Empower set this minimum likely to ensure clients have enough assets to benefit from the comprehensive planning they provide.

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Is Empower Personal Strategy worth it?
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It depends on your situation. Yes, Empower Personal Strategy can be worth it if you have substantial assets and want professional, holistic guidance. Many users find value in having a fiduciary advisor manage their portfolio, optimize taxes, and keep them on track for goals – all of which can outweigh the fee if it improves your outcomes. No, it may not be worth it if your assets are small or you’re comfortable managing money on your own. The ~0.89% fee could detract from returns at lower balances, and cheaper robo-advisors or investment funds might do an adequate job for far less cost. Essentially, if you’re utilizing the planning services and getting peace of mind, it’s worth it; if not, the cost is hard to justify.

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How does Empower Personal Strategy compare to other advisors?
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Empower’s service is often compared to Vanguard Personal Advisor Services, Betterment Premium, or Schwab Intelligent Portfolios Premium. Compared to Vanguard, Empower has a higher fee but a more feature-rich dashboard and some services. Versus Betterment, Empower is much more expensive, but Betterment doesn’t assign you a dedicated human advisor at that tier. Empower is unique in that it grew out of a tech platform, so it tends to have superior technology and financial tracking tools, making it feel very modern. Traditional firms might have more brand prestige or additional banking services, but Empower shines for tech-savvy investors who still want human advice.

Conclusion: Making the Most of Your Personal Strategy

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Empower Personal Strategy is a powerful option for investors at a certain stage: if you’ve accumulated wealth and need expert guidance to manage and grow it, this service can empower you to achieve your goals (with far less stress than doing it alone). You’ll be paying a premium, but in return you get a tailored strategy, proactive tax savings, and someone to call when the market gets scary or when you’re making a big financial decision. It brings together the best of robo-investing efficiency and human wisdom.

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However, if you’re not quite there yet, that’s okay – there are other avenues. You can always start with Empower’s free budgeting and investment tools to build your plan, or explore low-cost robo-advisors, and perhaps revisit the Personal Strategy when your needs justify it.

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Finally, remember that optimizing your finances is not only about investments. While Empower handles your portfolio, you’ll want to maximize everyday financial wins too – and that’s where Kudos can help. For example, Kudos ensures you’re getting the most out of your credit cards and daily spending effortlessly, so you’re not leaving money on the table in your day-to-day life.

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Whether you choose a service like Empower for your investments or not, you can start improving your finances today. Kudos is a free tool that works alongside any financial plan – helping you save money and earn more rewards on autopilot. It’s a perfect complement to a long-term strategy, ensuring every dollar in your wallet works as hard as those in your portfolio. Sign up for Kudos – it’s free – and take a smart step in your financial journey!