SigFig is arobo-advisor with a twist. Unlike competitors, you don’t invest your money directly with SigFig. Instead, SigFig has partnered with three brokers — Fidelity, TD Ameritrade, and Schwab — and its role is in managing your money. After you answer a few simple questions, SigFig will invest your funds in an ideal mix of ETFs that’s right for your situation.
SigFig shines in its low advisory fees, as you pay no money management fee at all if SigFig manages $10,000 or less of your money. And it provides something most robo-advisors don’t: access to financial experts who can provide personalized advice. But SigFig’s high minimum balance requirement to open an account is disappointing for an affordable advisory service, and some investors won’t like that SigFig requires a separate brokerage account.
Who should consider SigFig
If you have at least $2000.00 available to be managed by a robo-advisor, SigFig is an option worth considering. SigFig is an ideal choice if you already have a brokerage account with Fidelity, TD Ameritrade, or Schwab and you’re just tired of picking your investments. You can give SigFig control over some or all of the money already invested with these brokerage firms, and SigFig will invest it in an appropriate mix of low-cost ETFs based on your risk tolerance and financial goals.
SigFig makes it easy to start investing and allows you to take a hands-off approach. SigFig will rebalance your portfolio automatically, and even offers tax-loss harvesting. Tax-loss harvesting involves strategically selling losing investments to offset taxable gains, and it can reduce the taxes owed on investment income.
If you don’t want a separate brokerage account or aren’t comfortable giving SigFig access to your existing account, you’ll need to look elsewhere for a robo-advisor. Other options, including Betterment , allow you to deposit funds directly to be invested.
SigFig fees and features
|Amount minimum to open account|
|Account fees (annual, transfer, inactivity)|
|Tax loss harvesting|
|Tax loss harvesting detail||SigFig offers tax loss harvesting with a trading algorithm to help avoid wash sales.|
|Offers fractional shares|
|Ease of use|
|Mobile app||iOS, Android|
|Customer support||Phone, Chat, Email|
Strengths of SigFig
SigFig offers some great features that make it a competitive option among robo-advisors. Some advantages include:
- Low advisory fees: You’ll pay no fee at all if you want SigFig to manage $10,000 or less of your money. Other competitors, such as Betterment , start charging a fee from the first dollar invested. For accounts over $10,000, the advisory fee with SigFig is just 0.25%. This is on par with or lower than competitors, including E-Trade’s Core Portfolios, which charges 0.30 for robo-advising.
- Access to advisors: SigFig allows you to schedule phone appointments to speak directly with qualified financial advisors. Other robo-advisors, such as Wealthfront, don’t offer any comparable consulting services.
- Tax-loss harvesting: All SigFig accounts get free tax-loss harvesting, which helps to minimize taxes paid on investment gains. Many other robo-advisors either don’t offer tax-loss harvesting or limit it to accounts with high balances. With Schwab Intelligent Portfolios Premium™, for example, tax-loss harvesting is only available on accounts with at least $50,000 invested.
- Easy, hands-off investing: Give SigFig access to the portfolio funds you’d like it to manage and your money will be put into appropriate ETFs and automatically rebalanced as necessary to maintain your desired risk profile. Getting started is as simple as answering a few questions about your age, assets, financial goals, and the level of risk you’re comfortable with. And, you can track your progress online or by using intuitive mobile apps for iPhone or Android.
Drawbacks of SigFig
- You need a lot of money to get started. You’ll need to make a $2000.00 minimum deposit if you want your funds to be managed by SigFig. This is far above the minimums required by competitors such as Betterment , which has no minimum deposit requirement, and Wealthfront, which requires only $500 to get started.
- You’ll need a brokerage account. You must have an account with Fidelity, Schwab, or TD Ameritrade. While SigFig will open a TD Ameritrade account for you if you don’t already have an account with one of these brokers, many people don’t want to maintain a separate SigFig and brokerage account when they could have just one single account with competitors such as Wealthfront and Betterment .
- There are no local branches. While you can speak with a financial advisor on the phone and can get support via Chat and Email as well, there’s no local branch to visit. Some competitors provide a brick-and-mortar location you can go to for help, such as E-Trade, which has more than 30 branches.
Is SigFig safe?
SigFig is a member of the SIPC, which means invested funds are safe from loss if SigFig faces financial hardship. Up to $500,000 in your brokerage account is protected so you have lots of peace-of-mind.
SigFig also takes privacy and security seriously, which is important because you must give SigFig your credentials to log into your brokerage account with TD Ameritrade, Fidelity, or Schwab. SigFig uses 256-bit SSL encryption — the data is encrypted from the moment you log in until you log out. SigFig also promises never to sell your information.
But SigFig is investing your assets in ETFs, which aren’t guaranteed to go up. Whenever you invest, there’s a risk of loss so you need to be aware that you could end up with less money than you start with.
If you already have a brokerage account with Fidelity, Schwab or TD Ameritrade, and you want a simple way to have some of your funds managed by a robo-advisor, SigFig can provide it — as long as you have at least $2000.00 to start investing. But if you’re looking for a standalone robo-advisor that doesn’t have such a high minimum balance requirement, Wealthfront or Betterment may be better options for you.