SigFig Robo-Advisor 2024 Review
Warren Buffet said it best, “Successful investing takes time, disciple and patience.”
Luckily, investing your hard-earned money became a lot easier, and less expensive, once robo-advisors entered the market.
From small startups to big banks playing catchup, there are now over 200 robo-advisors offering hands-off digital advisory services for every level of investor.
SigFig is a hybrid robo-advisor of sorts. Their goal is to help you become a better investor by managing your money held at three of the largest brokerage firms:
- Charles Schwab
- Fidelity
- TD Ameritrade
So, how does SigFig stack up against other robo-advisors?
Here’s what you need to keep in mind when deciding if SigFig is the best robo-advisor for you.
SigFig is great for...
- First-time investors
- Existing Schwab, Fidelity and TD Ameritrade customers
- Small investors
- Cheap robo-advisory services
Benefits of Using a Robo-Advisor
A “robo-advisor” is a digital financial service tool that uses complex software to manage personalized investment portfolios based on an individual’s risk tolerance and financial goals.
Robo-advisors make investing more accessible by offering the personalized service of a money manager with smaller initial investments and lower fees.
It’s like having your own computerized financial planner who crunches data all day.
How SigFig Works
SigFig offers two types of products to its customers.
- Portfolio Tracker. SigFig’s free Portfolio Tracker is a program that analyzes and monitors your entire investment portfolio all in one place.
- Managed Accounts. Sigfig manages your accounts held at third-party brokerage firms.
To open a SigFig managed account, you’ll need to answer a series of questions on the website to determine you’re the best investment plan for you.
Answers to questions like your date of birth, household income, liquid assets and risk tolerance will be used to build your investment plan.
Once you complete the questionnaire and click on “Build My Investment Plan,” SigFig presents you with a proposed optimal portfolio.
It details the standard allocations that make up your portfolio. This includes the percentages each asset class makes up in your portfolio and why this investment plan makes the most sense for you.
You can change your risk tolerance at any point, that will trigger a change in your standard allocations.
If you choose to open a new account with SigFig and do not have an existing account with Schwab, Fidelity, or TD Ameritrade, the money will be held in a TD Ameritrade account.
Whether you’re looking to save for a house or plan for retirement, SigFig manages your money to help you reach these goals.
Types of Accounts
Sig Fig manages personal investment accounts and IRA accounts including:
- Taxable investment accounts (individual and joint)
- Traditional IRAs
- SEP-IRA
- Roth IRAs
- Rollover IRAs
The website indicates that they are working to add additional accounts in the future, including 401(k) and 529 plans.
Investment Strategy
SigFig’s investment strategy is to minimize risk by building diversified individual portfolios using low-cost exchange-traded funds (ETFs) from iShares, Vanguard, and/or Schwab.
They focus on building individualized well-diversified portfolios, made up of the right mix of low-cost, commission-free ETFs. The exact percentage and mix of funds depend on each individual’s risk tolerance.
They’ve identified nine key asset classes that based on past performance, have the biggest impact on returns coupled with a diversified portfolio.
You can expect to see a combination of the following nine asset classes in a Sigfig managed account:
SigFig ETF pool
| Asset Class | Fidelity | TD Ameritrade | Schwab |
|---|---|---|---|
| Treasury Inflation Protected Securities | TIP | IPE | SCHP |
| U.S. Bonds | AGG | SPAB | SCHZ |
| Short Term Treasuries | SHY | SPTS | SCHO |
| Emerging Market Debt | EMB | EMB | PCY |
| U.S. Municipal Bonds | MUB | MUB | TFI |
| U.S. Equity | ITOT | SPTM | SCHB |
| Developed Market Equity | IEFA | SPDW | SCHF |
| Emerging Market Equity | IEMg | SPEM | SCHE |
| Real Estate | FREL | USRT | SCHH |
Fees
SigFig does not charge an annual advisory fee for accounts between $2K (minimum investment requirement) and $10K.
For accounts totaling more than $10K, you’ll pay an annual advisory fee of 0.25 percent on assets under management after the first $10K.
This fee is automatically deducted from your account on the last business day of each month.
For example, if you have an account with a monthly balance of $20,000, you’ll pay $2.08 in fees each month.
Similar to other robo-advisors, SigFig doesn’t charge commission, transaction or rebalancing fees.
In addition, you’ll pay a fee for each ETF in your portfolio since almost all ETFs come with fees.
SigFig focuses on funding portfolios with a mix of commission-free ETFs, with annual expense ratios ranging from 0.07 percent to 0.15 percent.
Rebalancing
Similar to its competitors, SigFig automatically rebalances weightings of the assets held in your account.
This way, your portfolio isn’t suddenly out of whack and you stay on track based on your financial goals and risk tolerance.
Tax Loss Harvesting
SigFig offers a full suite of tax-advantaged investment strategies.
SigFig uses Tax-loss Harvesting (TLH) technology to help generate greater tax savings for clients.
TLH is an automated process that monitors specific asset class investments on a regular basis in order to sell off any that have declined in value, to offset investments that have gained in value. By selling these investments below the purchase price, a loss is generated, offsetting the impact of taxable gains.
The tax savings are then reinvested in your portfolio.
Losses generated by TLH can be used to offset up to $3,000 of ordinary income or gains, which can lower the overall amount you pay in taxes each year.
Financial advisors and wealth managers have long been following this practice, by manually monitoring client’s accounts in order to offset gains with losses. Technology has now automated this process, replacing the need for an advisor to manually check each account.
In order to participate in this tax-savings strategy, customers must choose to take advantage of TLH for any of their managed SigFig taxable accounts.
Online Experience
SigFig is a robo-advisor service without completely removing the human touch.
The website offers a plethora of information and is easy to use. Whether you want to learn about their investment philosophy or review account performance, all of this can be done on their website.
The FAQ section on the website is expansive and seemingly answers almost any question that a customer might need to ask.
If you still have questions, unlike some of its competitors, SigFig customers have access to the investment advisory team. From the SigFig website, you can send an email, chat or schedule a 15-minute appointment in advance.
In addition, customers can also call the support team Monday through Friday, free of charge.
Mobile Experience
SigFig is consistently recognized as having one of the top investment apps for iOS and Android users.
Before customers can use the app, they’ll need to set up an account on the SigFig website. Once you download and log into the free app, you can do almost anything.
The app offers almost all the capabilities of the website, at the convenience of your fingertips.
The SigFig app is a great way to see all of your investment accounts in one place.
Some of the best mobile app features are:
- View all your investment accounts in a single dashboard
- See account performance, asset allocation, risk tolerance, and more, for each
- individual account
Contact the investment advisory team
Research Tools
SigFig’s Portfolio Tracker and mobile app sync all of your investments in one place. If you have managed accounts with them as well, SigFig is your one-stop shop.
There is a plethora of information available about your entire portfolio performance, down to the ticker, price, change, and 52-week range. From charts to graphs, you can stay on top of your portfolio just by opening the app.
In addition, customers receive weekly emails detailing the performance of your entire portfolio.
On top of that, you receive alerts for any news that might have an impact on any part of your portfolio.
If you’re looking to estimate how much money you need to save to reach certain goals, SigFig offers personal finance scenarios. These help you estimate projected portfolio values based on your financial goals.
This tool is helpful to understand what you need to save for a home, retire or to build wealth.
If you’re looking to dig a little deeper into SigFig past portfolio performance, you can email the company to request a one-year historical backtest to show you how different portfolios performed over the previous year.
Conclusion
If you already have a brokerage account with TD Ameritrade, Schwab or Fidelity, and have less than $10K, it’s free to open an account with SigFig.
At no additional cost, why not sign up for investment analysis and management.
If you have more than $10k invested somewhere else, the hassle of moving your accounts on top of fees could add up.
There’s no question that SigFig’s free Portfolio Tracker can benefit every type of investor.
So, even if you’re not looking to open a managed account, it can’t hurt to track your existing portfolio in one place, all from the convenience of your smartphone.
