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Updated on Wednesday, December 9, 2020
SigFig is a financial services company that offers automatic portfolio management for investment accounts at TD Ameritrade, Fidelity and Schwab. Like other robo-advisors, SigFig will recommend a well-diversified portfolio of exchange-traded funds (ETFs), curated for you based on factors like your risk tolerance and financial targets, and will put those recommendations into place as part of its portfolio management service. Essentially, SigFig does the heavy lifting of investing for you, and makes sure your investments are optimized to reach their highest potential.
|Management fee||0.25% annual advisory fee for accounts of $10,000 and above|
|Accounts offered||Individual and joint brokerage accounts; Traditional, Roth and SEP IRA accounts|
|Access to human advisors||Yes|
- What is SigFig and how does it work?
- SigFig investment approach
- SigFig fees
- SigFig features and tools
- SigFig user experience
- SigFig safety and security
- Is SigFig worth it?
What is SigFig and how does it work?
SigFig provides you with automated portfolio management for your existing accounts at big brokers including TD Ameritrade, Fidelity and Schwab — think of it as an automated, robo-advisor extension that you can add on to your existing investment accounts. SigFig is added to your existing account as an advisor, and from there, it will manage your investment account by reinvesting current holdings and automatically rebalancing.
SigFig also offers the standard service that robo-advisors are most well-known for. With SigFig Managed Portfolios, you will receive a balanced and diversified portfolio made up of low-cost ETFs selected for you based on factors including your age, risk tolerance and financial targets. Your invested funds are held at SigFig’s partner brokerages, and if you do not already have an investment account open with TD Ameritrade, Fidelity or Schwab, SigFig will open one for you at TD Ameritrade.
- Low fees: SigFig does not charge a monthly fee for investors with less than $10,000 invested, making it one of the more cost-friendly portfolio management platforms out there. Only investors with $10,000 or more invested will be billed a 0.25% management fee each month, a rate that is pretty in line with other robo-advisors. Additionally, SigFig does not charge any transaction fees, commission fees or trading fees.
- Access to human financial advisors: A rarity in the robo-advisor world, SigFig features the option to connect with a human financial advisor. Investment consultations lasting 15 minutes can easily be scheduled through SigFig’s online scheduling portal. This is a valuable feature that should not be overlooked, as many robo-advisors do not even offer customer support over the phone, simply relying on email support — yet SigFig goes a step further, offering investment consultation in addition to basic customer support.
- Portfolio management provided for existing accounts: Investors who want to benefit from the automated portfolio management of a robo-advisor but don’t want to move their money from an existing brokerage account will benefit from SigFig, as it allows you to use its services while keeping your money in existing accounts at TD Ameritrade, Fidelity and Schwab. This is a convenient feature not offered by many robo-advisors.
- Portfolio analysis for several accounts in one spot: Investors who have multiple accounts — whether at one brokerage or several — will benefit from SigFig’s Portfolio Analysis tool. This free feature allows you to monitor all of your accounts across many different brokerages on one screen, and it goes a step further by providing you with email summaries of their performance, as well as free analysis of weak spots. If you feel like simply keeping track of all of your investments is a task in itself, this is a great tool.
- High minimum: Compared with its competitors, SigFig requires a hefty minimum of $2,000. SigFig says that part of the reason for its minimum is that since the market determines the price of ETF shares, it is the lowest amount with which it can properly align the actual asset allocation of your portfolio to the asset allocation of your choosing.
- Limited brokerage partners: In order to have a SigFig Managed account, your funds will need to be invested in an account at one of its partner brokerage firms, which include just TD Ameritrade, Fidelity and Schwab. If you do not already have an account open at one of those three brokerages, SigFig will open an account for you at TD Ameritrade. For investors who want more flexibility in choosing which brokerage they have an account with — or who do not find any of those three brokerages appealing — you don’t have any other option.
- Limited asset classes: Similar to other robo-advisors, SigFig will invest solely in commission-free, index-based ETFs that span nine asset classes. While this is certainly enough to serve as a well-diversified portfolio, investors interested in investments other than ETFs, such as futures and cryptocurrency, may want to look elsewhere.
- No cash management component: While many of its competitors offer robust cash management services, giving customers access to accounts that allow them to easily save or spend their funds, SigFig solely invests your cash. It does not offer a cash management component, and therefore does not offer FDIC insurance coverage nor interest earned on cash that might be idly sitting by.
SigFig investment approach
|Socially Responsible Investing|
SigFig’s portfolios are crafted from low-cost ETFs, offered across nine asset classes including:
- U.S. stocks
- Developed markets stocks
- Emerging markets stocks
- Real estate
- U.S. bonds
- Treasury inflation-protected securities
- Emerging market sovereign debt
- Short-term U.S. treasuries
The ETFs that SigFig invests in are commission-free and index-based from Vanguard, State Street, Fidelity, iShares and Schwab.
Before recommending a portfolio, SigFig has you answer an online questionnaire about your investment goals and current financial situation. Then, you will receive a recommended portfolio based on your goals and risk tolerance, which you can open and fund through one of its three partner brokerages.
Like other robo-advisors, SigFig offers conservative, moderate and aggressive portfolios, based on factors such as your risk tolerance and time horizon. It’s worth noting that unlike other robo-advisors, SigFig allows you to adjust your own risk tolerance and asset allocation as you see fit.
Additionally, rebalancing is a core feature of most robo-advisors, and SigFig is no exception. SigFig will rebalance your portfolio when the market moves your portfolio away from its target asset allocation by more than a few percentage points.
SigFig offers tax-loss harvesting as a way for its customers to potentially decrease their tax liability. With tax-loss harvesting, SigFig will look for opportunities in which it can sell holdings with losses to offset any realized gains, which could ultimately lower your tax bill.
By nature, SigFig also does not trade often, as to not trigger as many taxable events by prioritizing long-term gains over short-term gains. Additionally, if you have an existing account and do not want a particular security to be sold for tax reasons, SigFig allows you to only have a portion of your account managed by them, restricting access from the security you want to keep separate.
- Annual management fee: 0.25% per month after the first $10,000
- Investment expense ratios: Average range is 0.07%-0.15%
SigFig stands out for its low fees, only charging an annual management fee of 0.25% that is billed monthly only for balances of $10,000 or more.
Other fees include the expense ratio for the underlying ETFs that make up your portfolio, as well as trading fees you may incur if you opt into tax-loss harvesting.
SigFig features and tools
SigFig Managed Account
SigFig differentiates itself from other robo-advisors by offering a feature that manages investment accounts you have at other brokerage firms. If you have an account at TD Ameritrade Institutional, Fidelity or Schwab, you can add SigFig as an advisor to that account, enabling it to deploy its robo-advising services — such as investing your funds in a diversified mix of low-cost ETFs and and automatically rebalancing — to your existing investment account.
If you have an investment account open somewhere other than those three brokerages, SigFig even offers the option to move your account to TD Ameritrade, where it will manage it from there.
SigFig’s Portfolio Tracker allows you to sync and view all of your existing investment accounts — including 401(k) plans, IRAs and brokerage accounts — at over 80 brokerages, all in one place. It then provides you with weekly email summaries on your portfolios’ performance, free analysis on any issues (such as overexposure to one stock or hidden fees) and insightful charts and graphs.
This is an incredibly useful tool for investors who have multiple accounts — whether at one brokerage or several — and want to ensure that all of their investments are being optimized to reach their full potential.
SigFig user experience
SigFig boasts both an iOS and Android app, which feature clean and uncluttered snapshots of the current state of all of your investment accounts, all in one place. It enhances the user experience through charts and graphs showing investment performance over time, as well as your investments’ potential value.
SigFig really shines when it comes to customer service. In addition to offering access to financial advisors, it offers customer service via phone, email or chat. Customer support is available by phone, Monday through Friday 6 a.m. PST to 3 p.m. PST at 855-9-SigFig, as well as by emailing [email protected] or by using the chat feature on its website (available Monday through Friday, 6 a.m. PST to 3 p.m. PST).
SigFig safety and security
- Partner brokerages are SIPC members
- SSL encryption
SigFig is not a member of SIPC, but the current brokerage firms that act as custodians of your money are, and therefore your funds are covered by SIPC insurance. SIPC coverage protects up to $500,000 (including up to $250,000 cash), should the brokerage firm fail.
Additionally, SigFig uses a 256-bit SSL encryption to protect your account when you are signing on. You’ll also be required to enter your brokerage credentials before accessing SigFig, as an extra layer of protection.
Is SigFig worth it?
For investors who already have accounts with TD Ameritrade, Fidelity or Schwab, SigFig is an excellent add-on to consider. While it might not be rich in shiny bells and whistles (like automatic recurring investments or cash management accounts), SigFig’s Portfolio Tracker feature and its access to human financial advisors are reasons enough to consider its investment services.
Additionally, SigFig offers benefits for both hands-on and hands-off investors, as it provides you with a recommended portfolio of ETFs while also allowing you to adjust your own risk tolerance (and therefore your own asset allocation) if you see fit. This is a type of flexibility that is typically not offered by robo-advisors.
However, in the case that you do not have a minimum of $2,000 to invest, or you would like to invest outside of ETFs, there are other robo-advisors out there that will likely be a better fit.
Alternatives to SigFig
|Account minimum||Annual fee||Accounts offered|
|SigFig||$2,000||0.25% for accounts above $10,000||Traditional and joint brokerage accounts. Roth, Traditional and SEP IRAs|
|Betterment||$0||0.25%||Traditional and joint brokerage accounts, Roth, Traditional and SEP and inherited IRAs, trust accounts|
|Wealthfront||$500||0.25%||Individual, joint and trust brokerage accounts, Traditional, Roth and SEP IRA accounts, 529 College Savings|
SigFig vs. Betterment
The core difference between SigFig and Betterment is in the services they provide. While Betterment operates primarily as a robo-advisor, investing your funds into a Betterment investment account and offering automated portfolio management, SigFig manages investments that are invested in funds at its partner brokerages. Although SigFig also provides automatic portfolio management and recommends portfolios built of ETFs — like Betterment — you do not invest your funds directly into a SigFig account.
Other key differences between SigFig and Betterment are their fee structures. SigFig only charges its 0.25% fee on funds above $10,000, but it requires a $2,000 minimum. Meanwhile, Betterment charges a 0.25% fee on all funds, but does not require a minimum. If you are looking for a new investment account and want to start small, Betterment is likely the better option. However, if you have an existing account at one of SigFig’s partner brokers, SigFig is the more convenient and cost-efficient option.
SigFig vs. Wealthfront
Similar to Betterment, Wealthfront is also its own brokerage, so you are investing your funds directly with them. In contrast, SigFig manages and invests your funds in investment accounts at its partner brokerages. While both SigFig and Wealthfront essentially serve the same function — investing your money in a recommended portfolio made up of low-cost funds — where those accounts actually live is where they differ.
Also similar to Betterment, Wealthfront offers a banking service, providing interest on funds that you keep in cash in its cash management account. If you are looking for an entirely new investment account (as opposed to the management of an existing account), as well as a lower minimum, Wealthfront might be your best bet.
All information included in this profile is accurate as of 10/22/2020. For more information, please consult SigFig’s website.
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.