SigFig Review & Everything You Need To Know about SigFig

You are not the only one looking for a Sigfig Review, in fact, that in itself is a smart step. If you are looking for a portfolio manager that is technologically advanced and has low fees? It might seem impossible, but SigFig offers all of this and more. This article, therefore, gives a review about SigFig.

SigFig Review

If you’re looking for an affordable robo-advisor for your retirement account or investment account, SigFig offers free management for accounts up to $10,000. After that, you’ll pay 0.25% which is comparable to Wealthfront and Betterment.

This robo-advisor is for those who are tech-savvy and enjoy keeping an eye on their finances on the go. All accounts come with a free portfolio tracker, and there’s a useful mobile app, which is not something you’ll see across the robo-advisor field.

However, the $2,000 account minimum seems high when compared to other free management services that have $1 or $500 as a minimum.

For now, you’re also limited to taxable accounts and retirement accounts as SigFig doesn’t offer trusts or 529 college savings plans (though it says it’s working on it).

What SigFig Offers

SigFig, like many robo advisors, offers low fees through exchange-traded funds (ETFs). What SigFig does is act as the conduit between you and your broker. This is different compared to traditional robo advisors, which allow you to invest directly with them.

SigFig offers joint and individual accounts, as well as IRAs (Roth, Traditional, Rollover, SEP, and SIMPLE IRAs are included in that mix). As far as asset allocation goes, SigFig offers the following combinations:

  • U.S. stocks
  • Developed markets
  • Emerging markets stocks
  • Real estate
  • S. bonds
  • Treasury inflation-protected securities
  • Municipal bonds
  • Emerging market sovereign debt
  • S. Treasuries

SigFig Pros and Cons

Pros

Easy To Use Interface: A hallmark of SigFig’s platform is its easy-to-use, highly intuitive, and simple-to-navigate platform. Beginner investors will not struggle to find their way around the website.

Tax-Loss Harvesting: SigFig provides its tax-loss harvesting service designed to improve after-tax returns as part of its service, unlike some robo-advisors who charge an add-on fee for this feature.

Comparison Tools: SigFig has lots of great tools, including ones that compare expense ratios on existing portfolios and identify better, lower-fee funds.

SigFig Review

Low Fees: SigFig charges no management fees on amounts up to $10,000 and just 0.25% on amounts above $10,000 for standard accounts. Diversified Income Portfolio investors pay 0.5% of assets under management.

Income Product: SigFig shines with its retiree-focused income product, Diversified Income Portfolio, that targets 4% annual yields. Most robo-advisors are focused on growth and returns rather than income, and some even restrict new clients above a certain age.

Cons

Timeline of Back-testing: The timeline of analysis SigFig uses to compare fund performance is 3 years which is not especially long, and it tends to be heavily reliant on Sharpe ratio for decision-making.

No Live Advisors: Investors seeking a more personal investing experience should consider alternatives, such as Personal Capital, who connect clients with live financial advisors.

Account Balance Minimums: SigFig has an account balance minimum of $2,000, which is high relative to many other robo-advisors who have no minimums at all.

Pricing: How Much Does SigFig Cost?

Option Name Management Fee Minimum Balance Features
$2,000 – $10,000 $0 $2,000 Live chat and phone support, investment advisor
$10,001+ 0.25% $10,000 Live chat and phone support, investment advisor

SigFig, like most robo-advisors, doesn’t charge commission, transaction or trade fees. The funds bought with your account don’t have trading commissions either. Some of the ETFs that will make up your portfolio will have a management fee, also called an expense ratio.

SigFig strives to find ETFs with low or appropriate fees for the asset class in order save you as much money as possible. The average expense ratio is 0.07% to 0.15%.

After you break the threshold of $10,000, your account will have a 0.25% annual fee. This fee is billed monthly and will be deducted from your account automatically. A small portion of cash will remain in your account to pay for the fee, it won’t get pulled from an investment.

If you stay below the $10,000 mark, your managed account will have no annual fee. To open an account, you will need to deposit at least $2,000, but you’ll get all the same features as a managed account without paying the advisory fee up until you go over $10,000.

At any time, you can cancel your account penalty-free. You just have to give the company a call to initiate the request.

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How Does Sigfig Work?

how doe sigfig work

SigFig’s goal is to help you invest better. They manage your account while keeping your funds with your existing broker, as long as it’s one of the three partner brokers.

If your money is elsewhere, or you have yet to choose a broker, SigFig will start your account with TD Ameritrade and manage your funds through them. SigFig offers two different account options:

  • Portfolio Tracker: This free service tracks your existing portfolio. It does not manage the portfolio, but tracks it for you, no matter which brokerage you use. You’ll answer a few brief questions to gauge your risk tolerance. The system then provides advice regarding your current portfolio and how you could make it better.
  • Managed Accounts: This is SigFig’s bread and butter. They help you balance your portfolio while minimizing costs and diversifying the risk. You’ll answer questions regarding your risk tolerance, income, invested assets, and age. The robo-advisor will create a recommended portfolio and manage it for you moving forward.

SigFig offers taxable accounts for both individual and joint accounts as well as IRAs, including Roth, Traditional, Rollover, SEP and SIMPLE IRAs.

Reasons You May Want To Look Elsewhere

You need at least $2,000 for an initial investment. If you are just starting out, $2,000 can seem pretty steep. Compared to its competitors, like Wealthfront, which requires only $500, the minimum initial investment can seem too high.

You must invest with one of the three partner brokers. If you have a brokerage account with someone other than TD Ameritrade, Fidelity, or Charles Schwab, you will have to change brokers.

This could result in additional costs and time. SigFig does say that they minimize the costs by whitelisting, but it could be difficult to avoid costs altogether.

They have a small account selection. Your only options are taxable accounts (individual or joint) or IRAs. They do not offer 529 savings plans, 401(k)s, or any other investment or banking options.

Bottom Line

sigfig review

Is SigFig right for you? If you already use one of the three preferred brokerages and you have less than $10,000 invested, it’s a no-brainer because it costs nothing. If you have more than $10,000 invested or you are already with a different broker, you may want to look elsewhere as the fees could get rather high.

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