They get assessments of how risky their investments are and their allocations to various asset classes and geographies. They also can measure fees on their mutual funds and judge whether the performance justifies the price. Some of this mirrors what's available on other sites such as Wikinvest and Sigfig.com, and with personal financial management software such as Mint.com.

Personal Capital wants to go further. It plans to match customers who seek hands-on help with one of its registered investment professionals. That's the part of the business that Harris said is "a pretty big swing for the fence," and the company is competing with portfolio advisory services from Charles Schwab and Fidelity Investments and with thousands of independent broker-dealers around the country.

The start-up currently employs eight wealth advisors in a call center in San Francisco and plans to add to that staff as the volume of customers grows. Each client is assigned an advisor who designs a personalized investment strategy and is available to talk via telephone, e-mail, video chat or instant messenger.

The company will charge an annual fee of 0.75% to 0.95% of the invested assets, compared with the average for the wealth management industry of 1.5% to 2%. "We've tried to combine real-time data tools that allow you to understand and take control of your financial decisions with the ability to have a personal advisor, to whom you can delegate," Harris said.
The company will face challenges. It's launching into a volatile stock market and a faltering economic recovery. Jim Bruene, editor of the Online Banking Report, is skeptical of the company's plans but said he thinks the market environment might help.
"There's a lot of volatility, and people are looking for advisors," he said. "On the other hand, will they go to a brand-new Internet company or will they go back to a name they have heard about for the last 100 years?"

There are other issues facing Personal Capital, such as: Why would anyone trust a financial advisor whom they've never met with some of the most important decisions they'll ever face? Mitch Tuchman, CEO of a portfolio management software maker called MarketRiders, said Harris is wading into a field that tends to revolve around trust and relationships.


Orphaned 401(k) Plans
Expect more 401(k) assets to be frozen due to abandonment if client plans go unmonitored, warns Rania V. Sedhom, an attorney and principal with New York-based Buck Consultants. 401(k) plans become abandoned, or "orphaned," when employers shut their doors or declare bankruptcy, and it generally happens with small and midsize businesses. It can happen if an employer flees the country or simply stops contributions because of financial difficulties. Or when two employers merge and one merger partner's 401(k) plan is simply ignored. And 401(k)s also can become abandonead through death, neglect, bankruptcy or the jailing of an employer.

A 401(k) plan, Sedhom says, need only be inactive for 12 months to be abandoned. Once that happens, a plan participant's retirement stash can be held hostage. Even though an investment company, bank, brokerage or life insurance company may be holding assets in the plan, nobody is legally permitted to disburse them until specific rules are followed. Meanwhile, a plan's investment and operational fees still must be paid during abandonment. Depending upon the wording in the plan's contract, it's possible that employees could be saddled with that bill.

Sehom worries that abandoned plans could soon become a major issue given recent rumblings in Washington about the possibility of taxing 401(k)s as part of federal deficit reduction efforts.

"That's a little bit scary for most people," she says. Such talk could prompt clients and/or employers to halt plan contributions, rendering a plan inactive. Amid market downturns, she adds, clients often avoid opening 401(k) statements-another potential move toward inactivity.

Once a plan is abandoned, 401(k) funds can only be released after a "qualified termination administrator" is appointed by the U.S. Department of Labor Employee Benefits Security Administration. The appointee must be someone eligible under IRS rules to serve as a trustee or issuer of an individual retirement plan, or somebody who holds the assets of the abandoned plan. These are often banks, trust companies, mutual fund families or insurance companies.

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