SigFig is a Robo-advisor that works using third-party investment brokerage firms that will help you manage your portfolio with unlimited human advice. It offers low management fees and a free portfolio tracker that help you manage your portfolio if you do not actively manage your investments. SigFig is a great investment platform for beginner and experienced investors. Keep reading this SigFig review to help you make informed financial decisions.
What Is SigFig?
Established in 2007 in San Francisco, California, SigFig has had a range of names, including Wikinvest and Nvest. SigFig was co-founded by Mike Sha, who previously helped launch Amazon Prime and Amazon Visa credit. The company leadership has a member with unique backgrounds from tech giants like Amazon, Facebook, Google, and Yahoo, and financial professionals and scholars.
SigFig’s primary focus is on an advanced portfolio tracker for portfolio management. SigFig offers unlimited human counseling and advice for a low management fee, which is not often seen in Robo-advisor spaces. However, access to a human advisor comes at an additional advisory fee.
|Management fees||Free for the first $10,000, 0.25% after that|
|Account types available||
|Best for||No-fuss portfolio management|
SigFig has an investment strategy that monitors, analyzes, and improves any portfolio by automatically rebalancing and diversifying its investments by reducing the management fees and risk involved. The company’s goal is to be the middleman between financial advisors and retail investors while offering you the option to stay on top of your investments.
1. SigFig Product Tier
The SigFig investment platform has two-tier products. They include:
It helps keep your portfolio diversified and well-balanced while maximizing your earning potential. It charges nothing for the first $10,000 and 0.25% p.a; for a minimum investment of $2,000.
Asset management is made up of the following asset classes:
- Real Estate
- U.S. Stocks
- Developed Markets (non-U. S)
- U.S Bonds
- Municipal bonds and Mutual funds
- Treasury Inflation-Protected Securities
- Emerging Market Sovereign Debt
- Short-Term U.S Treasuries
Every asset class is represented by a single ETF (exchange-traded funds). Additionally, the ETFs are commission-free and selected from Schwab, Vanguard, and iShares. It is important to note that the exact mix of shares in your account will solely depend on your brokerage account.
This is a free tool that aggregates your investment portfolio in one place. The tool is free and requires no minimum investment to access it. Once you link all your accounts, SigFig links them up and shows you the performance of your entire portfolio.
The portfolio tracker offer access to other SigFig services, including Reporting Dashboards, Investment Account Sync, External Portfolio analysis, and live support online and in a phone chat.
2. Tax Loss Harvesting (TLH)
Tax Loss Harvesting has become a very common feature offered by most Robo-advisors. However, SigFig offers a more holistic strategy with the investment tax consequences by providing tax-optimized sales and tax-efficient migration.
The company also engages in ‘Whitelisting’ when you first open your account with them. This is where the investment you already hold with your portfolio is retained as long as they are in close SigFig allocation. The process helps reduce capital gain taxes resulting from SigFig revamping your existing investment portfolio.
3. Automatic Dividend Reinvesting
SigFig automatically reinvests your dividends, and any cash contribution to the account is also invested on your behalf. The main aim of this process is minimizing the ‘cash drag’ and ensuring that all the cash in your account is always invested. Additionally, your account will hold enough cash to pay your management fee.
4. SigFig Mobile Apps
The firm has iPad, iPhone, iTouch, Android, Apple Watch, and Windows 8 tablet apps. The app’s functionality is very similar to the desktop version, making it one of the best smartphone investment apps.
Account Security: SigFig only manages your account, but it does not take custody of the actual funds. The primary brokerage firms hold your account through either Schwab, Fidelity, or T.D. Ameritrade. Every one of these brokerage firms maintains coverage through SIPC. Your account is therefore protected for up to $500,00 in securities and cash in case of broker failures. It is important to note that SIPC does not cover any losses caused by market failure.
Perks and Limitations
SigFig is a great investment platform if you are looking for hands-off portfolio management for the long term. It has a tool that will help you stay on top of your portfolio management even for the account that SigFig does not manage. Here is a look at some of the advantages and disadvantages of SigFig:
1. Competitive Fees
SigFig has the most competitive fees among its peers. There are very few Robo-advisors available where you will have access to financial advisors with a minimum balance of $2,0000, and $10,000 is managed for free.
2. Diversified Portfolio
Sig Fig offers well-diversified U.S. and global ETFs from established firms. It also provides an easy way to change your asset allocation if a situation changes. Additionally, in some cases, you might not need to open a new investment account to start using the Robo advisor.
3. Portfolio Tracking Tool
The portfolio tracking feature helps you keep track of all your portfolios on SigFig or other management platforms.
4. Tax Loss Harvesting
SigFig goes beyond the usual tax loss harvesting by including tax-efficient migration, tax-optimized sales, and whitelisting.
1. Recommended Advice Might Be Wrong
In some cases, the advice offered by financial advisors might be inaccurate. It is essential to confirm with other sources before making your investment decision.
2. High Fee on Diversified Income Portfolio
The platform charges relatively high fees of 0.50% on income-oriented portfolios.
3. Limited Investment Options
You can only use SigFig if you have an investment account with Charles Schwab, Fidelity, or T.D. Ameritrade.
Who Is It For?
SigFig is a great investment option for investors who would instead not manage their portfolios or pay a broker to manage them actively. So, who is SigFig designed for?
1. Customers of Brokerage Firms Such as Vanguard, T.D. Ameritrade and Fidelity
SigFig has partnered with the largest financial institutions in the industry to provide high-quality Robo-advisor services. This means if you already have an investment account with a financial institution and you would like to keep off the day-to-day management, the company can help you save money on the active brokerages
2. Investors Who Would Like to Monitor Their Multiple Accounts in One Location
SigFig offers a free portfolio tracker that helps investors track their multiple accounts. The tool is free and does not offer any disadvantages.
3. Investors Looking for a Decent All-Round Robo-Advisor
SigFig offers competitive fees when compared to its competitors in the industry. This means it is an excellent choice for the average investor. Additionally, the platform provides tax advantage services for free if your account is under $10,000, which is commendable compared to its peers.
4. For Investors with More Than $25,000 in Investable Assets
You might consider getting a human advisor if you have more than $25,000 in investable assets. SigFig has the SmartAsset financial advisor matching tool to help you match with an advisor in your area to suit your needs.
How SigFig Guidance Works?
The platform launched SigFig Guidance to help investors deal with service problems such as poor diversification and cash flow drag. The free tool utilizes findings from investor data to optimize portfolios in minutes and find ways to keep you from losing money.
Once you connect any of your accounts with SigFig, the SigFig guidance will diagnose the problem promptly, diagnose the most common issues in your portfolio and offer personalized recommendations on how to manage the risk, improve your returns and lower the management fees.
Here is how SigFig Guidance works:
- Enter the login details for all your investment account and answer the risk assessment questionnaire.
- SigFig Guidance analyzes your portfolio by comparing and contrasting all your current allocations.
- Send you a report of all the problematic aspect of your investment portfolio and recommends an optimized portfolio to avoid all the common mistakes detected.
SigFig Vs. Others Robo Advisors
SigFig compared quite decently among its competitors. The platform offers unique features such as the portfolio tracker and manages accounts of up to $10,000 for free. Once your portfolio crosses the threshold, it charges an 0.25% fee. Here is an overview of how SigFig compares to other Robo advisors in the industry:
|Management Fee||Minimum Balance||Best For|
|0.25% of the balance above $10,000||$2,000||
|0.25% – 0.40%||$0||
|Hedgeable||0.30% – 0.75%||$1||
How to Open an Account?
It will only take a minute to open a new account with SigFig and input all your credentials from other brokerage firms. To open a new account, you will need to follow the following steps:
- Go to SigFig’s official website and signup.
- Go to the overview section. Here you can add your account or see all your investments at a glance. You will also see your overall balance, all your current holdings, and the U.S. stock ratings of the assets in your portfolio.
- Go to ‘View Holdings’ to see all the details on your portfolio. You can click on the ‘Report Card’ tab to see your portfolio’s current standing.
- The platform will make suggestions based on your risk tolerance and other factors to optimize your portfolio. You will need to complete a series of questions. They include the questions on your:
- Investment time horizon
- Amount of income you want to save
- The amount you have in liquid assets
- Risk tolerance
All the information above will help SigFig determine how to optimize your portfolio precisely.
Related Questions (FAQs)
1. Is SigFig Safe?
Yes. SigFig-managed accounts are not in its custody. Schwab, Fidelity, and T.D. hold your accounts. Ameritrade. Each of these brokerage firms has coverage through the SIPC.
2. What Funds Does SigFig Use?
SigFig offers a variety of investment strategies to fit specific risks. The platform favors ETFs like iShares and Schwab, which provide commission finds for exchange trading. The company has partnered with three brokerage firms to offer the best investment services.
3. Is SigFig Free?
SigFig is only free for the first $10,000 managed. After you have passed the threshold, the platform charges a management fee of 0.25%. There are expense ratios related to ETFs on your investment portfolio. These ratios are often between 0.07% and 0.15%. Additionally, some transactions also trigger transaction fees, like in the case of tax-loss harvesting. However, the platform claims that it only charges the fees if the benefits outweigh them.
The portfolio tracker by SigFig is also free to use whether or not you are under asset management. It is a great tool to see all your accounts in one place, including your 401 (k), free of charge.
4. How Does SigFig Recommend Your Portfolio?
SigFig recommends your portfolio based on financial goals, time horizons, and risk tolerances. The platform recommends to invest in ETFs for your portfolio since they are low-cost and make adjusting asset allocation easy.
SigFig is a great investment platform for investors who want to employ a hands-off investment strategy. The free portfolio tracker allows investors to keep track of their portfolios under one roof. The firm also offers human financial advice at a competitive rate. It is important to note that the investment advisor may be unbiased, and the services come with high advisory fees.
- SigFig is a Robo-advisor that works with third-party investment brokerage firms.
- The platform has a unique portfolio tracker aggregating investor portfolios in one place.
- SigFig acts as the middleman between retail investors and financial advisors.
- SigFig offers a holistic approach to tax loss harvesting by providing tax-efficient and tax-optimized sales services.
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