SigFig Review
  • Commissions and Fees
  • Ease of Use
  • Investment Options
  • Performance
  • Support
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Summary

Any good investor/trader knows that a good robo-advisor could change everything. SigFig is one of those robo-advisors. With many tools, features, and more SigFig could make a difference in your investing and trading. Read our review to learn all the pros and cons of SigFig and decide if this robo-advisor is right for you.

About SigFig

Sigfig.com is a unique personal robo-advisory service that provides automated portfolio management functions with a holistic approach that provides both algorithmic and human advice and insights. Sigfig functions as an add-on interface that can link to accounts at TD Ameritrade, Fidelity and Schwab for free portfolio tracking. Investing directly through a SigFig account (held at TD Ameritrade) enables account management services with full access to the automated portfolio functions along with free consultations with human financial advisors.   

History

Operating out of San Francisco, CA, SigFig was founded by Mike Sha and Parker Conrad in 2007 originally as Wikinvest, an investment research portal providing analysis, news and charting tools. After building up an active niche user base of over 400,000, the company refined its strategy to become a portfolio tracking service providing investment advisor referrals and fully converted to SigFig in 2015. SigFig Wealth Management, LLC is a registered investment advisory company and a subsidiary of Nvest, Inc. The company has evolved by fusing design, data science and digital innovation to develop an intuitive, simple yet powerful investing platform. SigFig integrates high-quality investment recommendations with automated functionality both conveniently and economically for 800,000 investors and over $400 billion in assets under management.

SigFig Dashboard

How SigFig Works

SigFig offers a free account that allows access to the Portfolio Tracker tool. Like most robo-advisors, users are walked through a series of questions pertaining to lifestyles, financial goals, needs and risk metrics to create an investor profile. Unlike other robo-advisors, Sig Fig enables users to link accounts from third-party brokers utilizing the free Portfolio Tracker. This tool lets users view all their investments in one place as SigFig provides insights and recommendations on optimizing portfolios based on the investor profile. Users can take the Risk Questionnaire to refine their risk profile. SigFig crunches the numbers to recommend ideal asset allocation classes and amounts. Utilizing exchange-traded-funds (ETFs) in nine asset classes are the primary components of portfolios. 

Users can enable SigFig to automatically invest in the personally designed portfolios through a SigFig Managed Account. Additional features include automated portfolio rebalancing/reinvesting, tax-optimized sales, tax-loss harvesting, tax-efficient migration, cash reinvestment, scheduled deposits and access to human investment advisers. 

Account Requirements

While SigFig is a licensed investment advisor, they don’t hold accounts in-house. They are an advisory service works like an add-on product that manages existing brokerage accounts automatically to the degree allowed by the customer. SigFig Managed Accounts require a $2,000 minimum balance and an online brokerage account at either TD Ameritrade, Schwab or Fidelity. SigFig will create an account through TD Ameritrade for users who sign up directly through SigFig.

SigFig Pricing and Fees

Sign-up for Portfolio Tracker is free. SigFig Managements Accounts are free for the first $10,000 in funds, then an annual fee of 0.25% applies on the rest. There are no additional charges for trading, rebalancing or transfers. They also support individual and joint non-retirement accounts and trusts. For retirement accounts, they support Roth, traditional, SEP and rollover IRAs. 

Indirect Fees

There are indirect fees associated with the underlying asset classes. SigFig selects from 27 mostly passive ETFs with embedded management fees that range from 0.07% to 0.95%. This is common with all robo-advisors.

SigFig Guidance

SigFig Platform 

SigFig provides both desktop and mobile app for iOS and Android. SigFig also runs on Apple Watch for ultimately wearable accessibility. The Portfolio Tracker is the main tool that gives a comprehensive bird’s eye view of all investments. Track all accounts in one place, select which functions to automate and get weekly updates. The platform truly embraces the power of automation, convenience, access and transparency. 

Investing Tools

SigFig is all about convenience and letting the algorithms manage optimization. After answering the onboarding and risk profile questions, SigFig will analyze your portfolios with the SigFig Guidance is a tool. These algorithms will highlight the pain points and weak areas in your portfolios including: Volatility, Cash Drag, Expensive Funds, Geographic Diversification, Stock /Bong Split and Single Stock Concentration. 

SigFig Guidance2

Therefore, there isn’t much by way of investing tools. Since it is an add-on to online brokers Fidelity, TD Ameritrade and Schwab, users are left to use the investing tools like charting, news and research from their existing platforms.

Automated Functions

SigFig Managed Accounts have the benefit of automated features. Automatic rebalancing triggers when portfolio holdings transcend beyond target allocations by several percentage points. Tax-loss harvesting will swap out identical ETFs or instruments to take advantage of the tax-loss on underperforming holdings and offset capital gains on outperforming positions. As a caveat, sometime the swap may involve taking a position that is not commission-free, but the algorithms ensure that benefit outweigh the drawbacks prior to execution. Dividend reinvestment is self-explanatory. 

SigFig Balanced Portfolio

Portfolios

Portfolios are designed to serve the goals and risk profiles of the investor. SigFig invests via 27 ETFs in nine asset classes including stocks, indices and bond funds. Most ETFs are commission-free from iShares or Schwab. Users can adjust their risk level anytime to see how the algorithms adjust allocations and assets to rebuild a personalized portfolio. This provides additional flexibility to more experienced investors that wish to manually adjust during risk-on and risk-off macro market periods. However, it’s important not to fall into micro managing since it’s not meant to be a day trading tool. It’s basically a set it and forget it type of service as you take advantage of the automation aspects. The most tedious legwork of diversification, tax-loss harvesting, rebalancing and tax-efficient investing is what I find to be the biggest benefit of SigFig. 

SigFig Performance

Like all robo-advisors, long-only positions are taken and generally track the performance of the S&P 500 index. The only other hedge is diversification through a higher allocation in bond or fixed-income ETFs. Timing entry and exits can make a big difference in the long-run, but that involves active management and goes against the passive management nature of automation. Besides, nothing guarantees active management ensures better returns and could wind up losing out of opportunities costs. Unfortunately, there are no direct hedging plays for a falling market since levered-ETFs are designed only for short-term investment and decay quickly in low volatility markets. 

Comparisons

SigFig is a more personalized robo-advisor compared to Betterment and Wealthfront since it consolidates accounts in one platform and starts charging 0.25% management fees above $10,000 compared to $5,000. The costs are lower but minimum balance of $2,000 is a higher barrier to entry compared to the $500 recommended starting balance. SigFig doesn’t have the round-up feature of Acorn or Stash, which enables the app to collect spare change to transfer into investments. It’s not a micro-investing platform for newbies just getting into the markets. It doesn’t offer debit cards or checking accounts since it’s an add-on tool, but all the automation tools makes for a very convenient cost-effective way to manage your portfolios.

Key Differentiators

SigFig Guidance indicators like Cash Drag is useful as it notifies that excess cash could be better put to work, especially when excess fees are spotted. SigFig combines automation with access to human investment advisors. Some clients will lean more heavily on human advisors while the ideal tech-savvy customers will prefer mostly automated functions. Human advisors are free for consultations to customers under the SigFig Management Accounts, which require a minimum $10,000 balance. SigFig is added as an advisor on your accounts at TD Ameritrade, Fidelity and Schwab. 

Trustworthiness

SigFig is a registered investment advisor. Since funds are kept at individual brokerage accounts, they are also protected through the brokerages including SIPC insurance (up to $500,000 per customer) and regulated as members of FINRA. Data is protected using 256-bit SSL encryption and doesn’t sell user information.

Who is SigFig Best Suited For?

SigFig is best suited for semi-experienced investors looking for a low-cost personalized robo-advisor functions with the flexibility to made manual adjustments as needed. The higher minimum account balance caters to larger accounts, not micro investing customers. There’s not a lot of learning material so investors are on their own to research the underlying ETFs or work with a human advisor for more details. 

Pros

  • Free Portfolio Tracker service provides excellent insights and recommendations on existing holdings in one consolidated platform
  • Flexible enough for experienced investors to adjust risk profiles anytime
  • Automated functions take the legwork out of tedious manual management
  • Simple and intuitive dashboard functions and layouts
  • Free access to live human investment advisors
  • Weekly updates enable passive portfolio management 24/7

Cons

  • Not suitable for micro investing or spare change investments
  • Very little educational content or resources for newbies