Empower Finance - Detailed Review
Self Improvement Tools
Empower Finance - Product Overview
Empower Finance Overview
Empower Finance, accessible through its website (https://www.empower.me), is a financial technology company that focuses on providing innovative financial tools to help individuals improve their financial health and security.Primary Function
Empower Finance is primarily aimed at expanding access to fair credit and improving financial mobility for its users. The platform offers a range of services that help individuals manage their finances more effectively.Target Audience
The target audience for Empower Finance includes a diverse range of individuals, particularly those seeking to improve their financial situation and credit score. This encompasses young professionals, individuals with varying income levels, and those who may have faced financial challenges in the past. Empower’s services are designed to be accessible to everyone, regardless of their financial background.Key Features
Here are some of the key features and services offered by Empower Finance:Instant Cash Advances
Empower provides cash advances of up to $250 without charging interest or late fees, and without running credit checks. Repayment is automated when the customer receives their next paycheck.Automatic Savings
The platform helps users save money automatically, promoting financial stability and security.Credit Monitoring
Empower offers tools and resources to help customers monitor and improve their credit health. This includes personalized credit-building strategies to help individuals build a positive credit history.Spend Tracking
Users can track their spending to better manage their finances and make informed decisions about their money.Financial Security Tools
Empower provides various tools to enhance financial security, such as no-fee cash accounts and other financial wellness features. By offering these services, Empower Finance aims to empower individuals to take control of their financial future, access credit affordably, and improve their overall financial well-being. Empower Finance - User Interface and Experience
User Interface Overview
The user interface of Empower Finance, formerly known as Personal Capital, is designed to be intuitive and user-friendly, making it accessible for individuals seeking to manage their finances effectively.Account Aggregation and Dashboard
Empower allows users to link various financial accounts, including checking, savings, credit cards, loans, and investments, into a single dashboard. This unified view provides a comprehensive picture of one’s financial status. Users can easily add accounts by searching for the financial institution, updating login credentials, and verifying the accounts with the respective institutions.Budgeting Tools
The budgeting feature is straightforward and helpful. It enables users to analyze their spending and savings by sorting transactions by date, category, or merchant. This tool also sets financial goals and alerts users when spending approaches set limits, aiding in disciplined financial management.Automated Savings
Empower’s AutoSave feature simplifies saving by analyzing income and expenses to determine safe amounts to transfer into savings. This automated process helps users build savings consistently over time without much manual intervention.Spending Tracking
The app categorizes transactions, allowing users to monitor spending patterns and identify areas for improvement. This feature helps in maintaining a clear view of where money is being spent.Cash Advances and Empower Card
Eligible users can access cash advances up to $250 with no interest or late fees, providing a safety net for unexpected expenses. The Empower Card, a Visa debit card, offers benefits such as up to 10% cash back on select purchases, early direct deposit access, and fee-free ATM withdrawals at over 37,000 locations.Ease of Use
Users appreciate the app’s comprehensive features and ease of use. The mobile app is highly rated on both the Apple App Store (4.8 out of 5 stars) and Google Play Store (4.7 out of 5 stars), indicating a positive user experience. However, some users have noted occasional issues with data syncing and customer support responsiveness.Security
Empower prioritizes user data security, employing bank-level encryption and strict security protocols to safeguard financial information. This ensures that users’ accounts, money, and personal data are protected.Overall User Experience
The overall user experience is highly personalized and action-driven. Empower’s interface is clean and easy to navigate, making it simple for users to manage all aspects of their finances in one place. The app provides personalized financial recommendations and insights, helping users optimize their financial health. While it is ideal for those seeking an all-in-one financial management tool, active investors may find the investment management features somewhat limited.Conclusion
In summary, Empower Finance offers a user-friendly interface that streamlines financial management, making it easier for individuals to track their spending, save money, and plan for retirement, all within a secure and highly rated app. Empower Finance - Key Features and Functionality
Empower Overview
Empower, formerly known as Personal Capital, is a comprehensive personal finance application that integrates several key features to help users manage their finances effectively. Here are the main features and how they work, including the integration of AI.Account Aggregation
Empower allows users to link various financial accounts, such as checking, savings, credit cards, loans, and investments. This provides a unified view of their financial status, making it easier to monitor and manage multiple accounts from a single dashboard.Budgeting Tools
The budgeting feature helps users create budgets and track spending across different categories. Empower automatically categorizes transactions and provides alerts when spending approaches set limits, aiding in disciplined financial management. Users can set an overall monthly spending goal, though it does not allow for category-specific goals.Automated Savings
Empower’s AutoSave feature uses AI to analyze income and expenses to determine safe amounts to transfer into savings, promoting consistent saving habits. This automated process helps users build their savings without manual intervention.Cash Advances
Eligible users can access cash advances up to $250 with no interest or late fees, providing a financial safety net for unexpected expenses. This feature is particularly useful for managing short-term financial needs.Spending Tracking
The app categorizes transactions, enabling users to monitor spending patterns and identify areas for improvement. Users can customize categories and even tag transactions for more detailed tracking.Empower Card
Empower offers a Visa debit card with several benefits, including up to 10% cash back on select purchases, early direct deposit access, and fee-free ATM withdrawals at over 37,000 locations. This card integrates seamlessly with the Empower app, enhancing the overall financial management experience.Financial Insights
Empower provides personalized financial recommendations and insights to help users optimize their financial health. The app analyzes linked accounts and offers suggestions based on the user’s financial goals and spending habits. This is achieved through AI-driven analytics that process large amounts of financial data to provide actionable insights.Investment Tracking
Empower tracks investments automatically, updating prices throughout the trading day and keeping tabs on mutual fund expenses. It also provides an overview of asset allocation, showing stock/bond allocation and other asset classes. Users can track their investment performance and make informed decisions based on the data provided.Savings Planner
The Savings Planner includes tools for Retirement Savings, Emergency Fund Savings, and Debt Paydown. Users can set and track goals for these areas, and the planner adjusts based on changes in the user’s budget. This feature helps in long-term financial planning and ensures users are on track to meet their savings and debt reduction goals.AI Integration
Empower leverages AI in several ways:Automated Savings
AI analyzes income and expenses to determine safe savings amounts.Financial Insights
AI provides personalized recommendations based on financial data analysis.Transaction Categorization
AI automatically categorizes transactions, helping users track spending patterns.Investment Tracking
AI updates investment prices and provides detailed analytics on asset allocation and performance. These AI-driven features enhance the user experience by automating routine tasks, providing insightful recommendations, and ensuring accurate financial tracking and analysis. Empower Finance - Performance and Accuracy
When evaluating the performance and accuracy of Empower Finance
Particularly in its retirement planning and financial tracking features, several points are worth considering:
Retirement Calculator Accuracy
Empower’s retirement calculator uses data from your investments, including the type of investment accounts, portfolio balance, income, and tax filing status, to estimate the success rate of your retirement plan. It factors in federal progressive tax rates but uses the highest state tax rate for state taxes, rather than calculating the actual state tax rate.
The calculator employs Monte Carlo simulations to generate forecasts and provides a success rate along with a graph that can be adjusted for normal and pessimistic scenarios. However, it is noted for being more pessimistic than other planners, partly because it automatically subtracts a 1% fee, which may not apply to DIY investors.
Limitations and Areas for Improvement
Account Aggregation Issues
Empower has been reported to have problems with linking accounts and sometimes double-counts certain accounts, which can lead to inaccuracies in net worth calculations.
Budgeting and Expense Tracking
The platform is not highly praised for its budgeting features. It does not allow for assigning specific budget values to individual categories, and some transactions may be missed. This makes it less effective for detailed expense tracking compared to other tools like Mint or Fidelity’s Fullview.
Portfolio Analysis
There have been issues with the accuracy of portfolio analysis, such as mischaracterizing certain funds (e.g., categorizing an S&P 500 Index fund as mostly cash). This can lead to incorrect asset allocation reports.
Glitches and Inconsistencies
Users have reported various glitches, such as negative savings rates despite positive cash flow, and inconsistencies in data aggregation. These issues can erode confidence in the accuracy of the financial projections.
User Experience
While Empower is generally easy to set up and use, the platform’s reliability and accuracy can be inconsistent. Users have reported needing to correct assigned categories and dealing with sporadic account aggregation failures. Despite these issues, the retirement planning features are considered better than some other planners, such as Schwab’s, and are on par with Fidelity’s tools.
Conclusion
Empower Finance has some strong features, particularly in its retirement planning and financial forecasting. However, it is crucial to be aware of the potential limitations, such as account aggregation issues, less detailed budgeting capabilities, and occasional inaccuracies in portfolio analysis. Users may find it beneficial to cross-check Empower’s results with other financial planning tools to ensure accuracy.
Empower Finance - Pricing and Plans
Empower Finance Services Overview
Empower Finance offers a variety of services and plans, each with distinct features and pricing. Here’s a breakdown of what you can expect:
Empower Budget App and Basic Financial Tools
- The Empower budget app is free and includes features such as tracking cash flow, viewing net worth, and managing investments. It syncs with thousands of financial accounts, allows you to customize budget categories, and provides real-time alerts on paychecks, bills, and purchases.
- This app also offers automated savings, investment tracking, and smart recommendations on earning more and uncovering extra savings. Additionally, it includes credit score monitoring and other financial management tools.
Empower Investment and Wealth Management
- Empower Personal Strategy is a wealth management service that requires a minimum balance of $100,000. Here are the key tiers and their associated fees:
- $100,000 to $1 million: Investors pay a management fee of 0.89% per year. They have access to a team of financial advisors and portfolios constructed from ETFs.
- $250,000 to $3 million: Investors pay a reduced management fee, ranging from 0.79% to 0.69% per year. They get access to two dedicated financial advisors and portfolios that can include individual stocks and ETFs.
- Over $3 million: The management fee further reduces, down to 0.49% for portfolios over $10 million. These investors also have access to more customized portfolios, including private equity investments.
Additional Features
- For clients with $200,000 or more in assets, Empower offers portfolios that include individual stocks in addition to ETFs. Socially responsible portfolios are also available.
- Empower provides tax-loss harvesting, automatic portfolio rebalancing, and retirement paycheck features as part of its service. It can also manage active 401(k) plans and advise on 401(k), HSA, and 529 plan allocations.
Free Options
- The Empower budget app and its associated financial management tools are free to use. Additionally, clients can schedule a free call with a financial advisor if they have linked accounts with more than $100,000 in assets.
Conclusion
In summary, Empower Finance offers both free and paid services. The free services include comprehensive financial management tools through the Empower budget app, while the paid services, such as Empower Personal Strategy, provide wealth management with access to human advisors and customized investment portfolios, but require a significant minimum balance.
Empower Finance - Integration and Compatibility
Integration with Financial Tools
Empower Finance integrates with financial tools through APIs, particularly those powered by Plaid. For instance, Fintable, a financial tool, uses Plaid to connect users’ bank accounts to Empower, allowing for the synchronization of financial data such as account balances and transaction history to platforms like Google Sheets or Airtable.
API Access and Limitations
While Empower does utilize internal APIs for its financial dashboard and services, these APIs are not publicly available for external developers. However, through partnerships like the one with SnapTrade, developers can access certain features such as OAuth authentication, long-lived connections, and retrieval of account balances and portfolio data. Notably, the Empower integration does not support trading capabilities.
Compatibility Across Devices
The Empower mobile app is available on both iPhone and iPad, requiring iOS 14.0 or later. This app allows users to manage their accounts, create budgets, and access professional investment advice from anywhere. The app is highly rated, with features highlighted by Forbes and CNBC for its ability to track net worth and provide a comprehensive financial picture.
Additional Features and Security
Empower’s mobile app and platform offer enhanced security measures, including biometric identification and multi-factor authentication, to protect user data. Users can link multiple accounts to create a budget and build their financial confidence, all while ensuring their personal information is not sold to third parties.
Retirement and Investment Planning
Empower is particularly strong in retirement planning, offering features such as the ability to enter Social Security and pension details, specify expenses, and generate forecasts using Monte Carlo simulations. Users can also create different scenarios and override certain allocations if necessary, making it a flexible tool for retirement and investment planning.
Summary
In summary, Empower Finance integrates well with various financial tools and platforms, offers a user-friendly mobile app, and provides strong security features. However, its API access is limited to specific partnerships and does not support external developer access or trading capabilities.
Empower Finance - Customer Support and Resources
Customer Support Options
Empower Finance offers several customer support options to ensure users have comprehensive assistance:24/7 Availability
Empower provides round-the-clock support through its platform. Users can access help at any time, whether through the website, phone, or online banking.Virtual Assistant
Empower features a virtual assistant that is available 24/7. This assistant can help with various tasks such as managing accounts, conducting transactions, and resolving queries through simple voice or text commands.Live Agent Support
During business hours, the virtual assistant can connect users to a live agent who can provide further assistance, ensuring a seamless transition from automated to human support.Additional Resources
Empower Finance offers a range of resources to help users manage their finances effectively:Personal Dashboard
The Empower Personal Dashboard allows users to track their net worth, analyze investment portfolios, manage income and expenses, and run retirement planning calculations. This dashboard provides a holistic view of one’s financial health and updates automatically as accounts are linked.Automated Tracking
Users can automatically track their net worth, investment fees, and asset allocation without the need for manual updates.Weekly Updates
Empower sends weekly email updates that include snapshots of the user’s net worth, market performance, upcoming bills, and accounts that need attention.Tax Loss Harvesting
Empower practices tax loss harvesting and tax location, which can help users gain up to 1% in after-tax returns annually.Financial Insights
Users can subscribe to Empower’s blog, “The Currency,” to gain insights into financial management and planning.Ease of Use
The platform is designed to be user-friendly, allowing users to sign up quickly and link their various financial accounts. This process is straightforward and takes only a few minutes, providing a comprehensive picture of one’s finances. By leveraging these features and resources, Empower Finance ensures that users have the tools and support needed to manage their finances effectively and achieve their financial goals. Empower Finance - Pros and Cons
Advantages
Comprehensive Financial Management
Empower offers a service that is similar to what a traditional financial advisor provides but at a lower cost. It includes personalized financial advice and management, which can be beneficial for investors with higher account balances.
Automation and Efficiency
Empower uses AI and automation to manage investments, which can analyze financial data faster and more accurately than humans. This can save time and help make better financial decisions.
Cash Management
Empower provides a cash management account called Personal Cash, which is FDIC-insured up to $5 million and offers unlimited transfers without a minimum balance. Although it lacks some features like a debit card, it is a useful adjunct to the investing service.
High-End Features
For investors with substantial assets, Empower’s tiered fee structure can become more cost-effective as the asset value increases. For example, fees decrease as assets surpass certain thresholds, such as 0.79% for the first $3 million and 0.49% for amounts over $10 million.
Disadvantages
High Fees
Empower is relatively expensive compared to other robo-advisors. The annual fees start at 0.89% for assets up to $1 million, which is more than twice the industry standard of around 0.25% plus ETF fees.
High Account Minimum
Empower has a high account minimum of $100,000, which can be a significant barrier for new or smaller investors. This minimum applies only to the investing account, not the cash management account.
Limited Cash Management Features
While Empower’s cash management account is functional, it lacks some features compared to competitors like Betterment and Wealthfront. For instance, it does not currently offer a debit card, although this is being developed.
Potential for Overdependence
Similar to other financial tools, there is a risk of overdependence on the services provided by Empower, particularly if users rely heavily on its automated features without balancing them with human oversight.
Conclusion
In summary, Empower is a solid choice for investors with higher account balances who value a comprehensive financial management experience similar to traditional advisors but may not be the best fit for those with smaller accounts or looking for lower fees.
Empower Finance - Comparison with Competitors
When Considering Empower Finance
When considering Empower Finance in the category of AI-driven self-improvement and financial management tools, it’s important to highlight its unique features and compare them with potential alternatives.
Unique Features of Empower Finance
- Comprehensive Budgeting: Empower offers an “Effortless Budgeting” feature that allows users to customize budget categories and receive real-time alerts on paychecks, bills, and purchases. This helps in keeping spending in check and ensuring financial goals are met.
- AutoSave: This feature automatically sets aside money based on the user’s account balance, cash inflows, and outflows, helping users achieve their savings goals.
- Cash Advance and Credit Line: Empower provides a cash advance of up to $300 and a line of credit up to $1,000, which can be repaid with zero interest and no late fees. The Empower Card also offers early paycheck access and cashback on select purchases.
- Investment and Retirement Planning: Empower’s tools include long-term financial planning, investment intelligence, and retirement readiness features, all accessible through a single dashboard.
Potential Alternatives
Mezzi AI
- Account Organization and Investment Tracking: Mezzi AI is a strong alternative for users facing connectivity issues or data security concerns with Empower. Mezzi offers deeper insights into investment tracking and retirement planning without the need for expensive advisors.
- Targeted Rebalancing: Mezzi AI provides continuous portfolio alignment and targeted rebalancing, ensuring users’ portfolios are efficiently adjusted to meet their financial objectives.
- AI-Driven Insights: Mezzi AI focuses on fee-saving recommendations, tax optimization, and autonomous wealth management, making it a viable option for those seeking more advanced AI-driven financial management.
Personal Capital
While Empower is often compared to Personal Capital, it’s worth noting that Personal Capital itself has its own set of features, including investment tracking and financial planning. However, users may face similar issues such as account connectivity challenges and data security concerns, which Mezzi AI addresses more effectively.
Key Differences
- Connectivity and Data Security: Mezzi AI stands out by offering better account connectivity and enhanced data security features, which are critical for comprehensive financial management.
- AI-Driven Financial Management: Mezzi AI provides more advanced AI-driven insights and automated portfolio management, which can be more appealing to users looking for a more technology-driven approach.
- User Experience: Empower’s user-friendly interface and features like AutoSave and cash advances make it a strong choice for those focusing on budgeting and immediate financial needs. However, Mezzi AI might be more suitable for investors seeking long-term wealth growth and detailed financial analysis.
In summary, Empower Finance is a solid choice for users needing comprehensive budgeting, cash advances, and basic investment tracking. However, for those seeking more advanced AI-driven financial management, deeper investment insights, and better account connectivity, Mezzi AI could be a superior alternative.
Empower Finance - Frequently Asked Questions
Frequently Asked Questions about Empower’s Financial Services
What is Empower Retirement and what services do they offer?
Empower Retirement is one of the largest retirement service providers in the United States. They offer a range of services including 401(k) plan management, self-directed brokerage accounts, financial wellness resources, and personalized retirement strategies. For example, their “My Total Retirement” program provides a personalized approach to investing, considering your lifestyle, situation, and goals.Will my investment choices change with the transition to Empower?
No, the investment choices are not changing. Your current fund lineup will remain the same. You can refer to the Notice of Investment Returns & Fee Comparison for detailed information on plan investments.What happens to my self-directed brokerage account (SDBA) during the transition?
Your SDBA balance will automatically transfer to Empower as part of the transition. However, during the blackout period, you will have no access to your funds in your SDBA and will be unable to actively direct your investments. Ensure your investment elections are set prior to the start of the blackout period.What financial wellness resources will be available with Empower?
Empower offers several financial wellness resources, including My Financial Path, Learning Center, Next Step Evaluator, Retirement Readiness Reviews, and Advisory Services. These tools help you take control of your finances, make sense of your money, and plan for retirement. For instance, My Financial Path provides personalized, actionable steps to reduce financial stress and achieve long-term financial goals.How does the My Total Retirement strategy work?
My Total Retirement is a personalized investment strategy created by experienced investment professionals. It goes beyond typical age-based strategies to consider your lifestyle, situation, and goals. Financial professionals continually review and adjust your strategy to ensure it remains aligned with your evolving needs. There is an asset-based fee for managed accounts.What happens to my outstanding loan during the transition?
Your outstanding loan will automatically transfer from your previous provider to Empower. However, the loan balance will not be reflected in the total account balance shown on the website. You can view the details of your loan balance under Loans and Withdrawals within My Accounts. If you are repaying a loan through automated clearing house (ACH) debits, you will need to contact Empower to establish your banking instructions to continue repayment.Are there any new products or services offered by Empower?
Yes, Empower offers new products and services such as the Empower Brokerage account, which allows experienced investors to allocate their assets over a broad array of investment options. Additionally, Empower provides Retirement Readiness Reviews and Advisory Services, which can help you prepare for retirement and make informed financial decisions.How do I access my 401(k) plan account after the transition to Empower?
You will access your 401(k) plan account through new, dedicated 401(k) resources provided by Empower. You will be notified by email and/or postcard once access is available after the blackout period.What is the blackout period, and how does it affect my account?
The blackout period is a time during which you will have no access to your account and will be unable to make changes or actively direct your investments. This period is necessary for the transition process. You will be notified when the blackout period starts and ends, and you can make changes to your account once it is lifted.Can Empower manage my other financial accounts, such as IRAs and HSAs?
Yes, Empower can manage various types of accounts, including non-retirement accounts, Roth, traditional, rollover, and SEP IRAs, trusts, and even 401(k), HSA, and 529 plan allocations. They also provide investment reviews and recommendations for these accounts.What are the fees associated with Empower’s managed accounts?
Empower Personal Strategy has a management fee starting at 0.89% of assets managed for the first $1 million, with lower fees for higher balances. There are no setup or onboarding fees, and the annual fee is all-inclusive. Empower Finance - Conclusion and Recommendation
Final Assessment of Empower Finance
Empower Finance is a comprehensive personal finance application that offers a wide range of features to help users manage their financial lives more effectively. Here’s a detailed look at who would benefit most from using Empower and an overall recommendation.Key Features and Benefits
Empower integrates several crucial financial management tools, including:- Account Aggregation: Users can link various financial accounts, such as checking, savings, credit cards, loans, and investments, to get a unified view of their financial status.
- Budgeting Tools: The app allows users to create budgets, track spending across categories, and set financial goals. It also provides alerts when spending nears set limits, helping users stay disciplined.
- Automated Savings: Empower’s AutoSave feature analyzes income and expenses to determine safe amounts to transfer into savings, promoting consistent saving habits.
- Cash Advances: Eligible users can access cash advances up to $250 with no interest or late fees, providing a safety net for unexpected expenses.
- Spending Tracking: The app categorizes transactions, enabling users to monitor spending patterns and identify areas for improvement.
- Financial Insights: Empower offers personalized financial recommendations and insights to help users optimize their financial health.
Who Would Benefit Most
Empower is particularly beneficial for several types of individuals:- Young Professionals: Those starting their careers can use Empower to manage their finances effectively, track spending, and build savings and investment habits early on.
- Small Business Owners: By monitoring multiple accounts and tracking expenses, small business owners can better manage their personal and business finances.
- Retirees: Empower’s retirement planning tools and investment tracking features can help retirees monitor their financial health and ensure they are on track to meet their retirement goals.
Additional Benefits
- Affordable Credit Access: Empower strives to make credit accessible to all individuals, regardless of their financial background, offering competitive rates and flexible repayment options.
- Credit Health Improvement: The app provides tools and resources to help users improve their credit scores and build a positive credit history.
- Empower Card: The Empower Visa debit card offers benefits like cash back on select purchases, early direct deposit access, and fee-free ATM withdrawals.
Overall Recommendation
Empower Finance is an excellent choice for anyone looking to streamline their financial management. Here are some key points to consider:- Comprehensive Financial View: Empower provides a 360-degree view of your finances, making it easier to track and manage all your accounts in one place.
- User-Friendly Interface: The app is designed to be user-friendly, with features like automated savings and spending tracking that simplify financial management.
- Personalized Financial Insights: Empower offers personalized recommendations and insights to help users make informed financial decisions.