SigFig is different from robot investors in that it cooperates with cooperative brokerage companies-Charles Schwab, Fidelity and TD Ameritrade. If you have existing funds in the first two brokerage companies, SigFig will manage your assets there. Otherwise, Fig An account will be opened for you at TD Ameritrade.
What is SigFig and how does it work?
SigFig is a robot investment platform that cooperates with third-party brokerage companies-Charles Schwab, Fidelity and TD Ameritrade. If you invest your liquid assets in any of these three brokerage companies, you will keep your funds there and SigFig will manage them. Otherwise, if you want to open a brand new account, SigFig will open a managed TD Ameritrade account for you.
First, you will sign up for their account management service, and SigFig will begin to analyze your investment portfolio and make recommendations on the best asset allocation. It will also continue to monitor and improve your investment portfolio by diversifying investments and automatically rebalancing them.
The goal is to ensure that you have access to affordable consulting services and options to align your investment portfolio with your financial goals. In addition to low management fees, SigFig also aims to find investors’ exchange-traded funds (ETFs) with low fees for selected asset classes to help save money-average fee ratios range from 0.07% to 0.15%.
SigFig Portfolio Account
Best for passive investors
- Mixed investment in four different Vanguard ETFs
- Monitor your portfolio daily
- Low cost
SigFig monitors your investment portfolio from your affiliated cooperative brokerage account and automatically rebalances your asset allocation to help minimize fees and reduce risks. Other tools include a free portfolio tracker, you can view all your investments in one place, and unlimited meetings with financial advisors.
SigFig Portfolio Account
This free feature allows you to link other brokerage accounts (whether with a partner company or not) so that you can track your investment progress. You will receive an email every week with an overall view of your portfolio performance, current investment news and top securities of the week.
This tracker will not actively manage all parts of your portfolio, only the partner brokers you choose to join.
Other features of the portfolio tracker include live chat and phone support, reporting dashboards, and external portfolio analysis.
Commissions and fees
SigFig does not charge consulting fees to the escrow account for the first 10,000 USD managed for you. Once this amount is exceeded, the annual consulting fee is 0.25% of your investment amount.
Of course, you also have to pay for the assets in your portfolio—that is, the expense ratio of index funds, ETFs, and mutual funds. These are usually between 0.07% and 0.15%. SigFig aims to provide you with the lowest possible expense ratio so that you can use more funds for investment.
SigFig helps investors create a diversified investment portfolio designed to help you achieve your goals. Your funds will be mixed and invested in various funds based on risk tolerance and other factors.
Some of the assets (represented by ETFs) that you may find in your portfolio include:
- U.S. stocks
- U.S. bonds
- Developed market stocks (international)
- Emerging market stocks
- Short-term U.S. Treasuries
- Treasury inflation-protected securities
- Municipal bonds
- Emerging market sovereign debt
- real estate
Portfolio management companies like ETFs that do not charge commissions-they chose Vanguard, iShares and Schwab ETFs. Your exact portfolio depends on the brokerage account you currently have, as there may be ETFs held only in a partner company.
As it works with Fidelity, TD Ameritrade and Schwab, you can also view a breakdown of the types of funds you can invest in. You can view this list on SigFig’s website.
To learn more about your proposed portfolio allocation, you can log in to your SigFig account and go to the “Guide” section. Asset allocation is based on the answers in the questionnaire SigFig you provided when you opened your account.
These questions are designed to help determine your financial goals and risk tolerance. The recommendation is to change whenever you change the risk level or want to edit the asset allocation.
If you are not sure why this process or SigFig makes some suggestions, you can consult a customer representative. During their working hours, you can get a 15-minute free consultation to discuss your investment options.
In addition, you can view more information about each underlying investment by looking at the historical trend for a year to understand the performance of its portfolio (you can find it on their website).
Human Financial Advisor
The point of robo-advisors is that you can trust brokers and use their proprietary algorithms to make investment decisions on your behalf. However, if you still need the advice of a human financial advisor, there are some options.
Many robo-advisors offer this feature, although it may have a higher minimum account requirement or upgrade to a higher level product. This is why SigFig provides unrestricted financial consulting for all paying customers is a kind of fresh air.
Once you sign up for SigFig’s portfolio management service, you can sign up for free consultation as many times as you need-you need to schedule an appointment. Utilizing this service means you can get additional investment insights and other tailored advice to help you improve your financial situation.
SigFig manages your investment portfolio based on the asset allocation and asset class that it believes best suits your financial goals. As mentioned earlier, SigFig will gain insight into what you want by looking at the answers you provided from the initial questionnaire.
It will also analyze your existing investment portfolio to understand your current allocation. Then, if there are any discrepancies, it will highlight the potentially problematic parts of your portfolio and recommend an approach that is more suitable for your goals.
For example, if your existing fund is too conservative, SigFig may recommend a more aggressive configuration or highlight securities with high expense ratios. Whenever your portfolio deviates from your target allocation, it will also automatically rebalance your portfolio.
Tax loss collection
SigFig provides customers with free tax losses, no matter how much they invest. This investment strategy helps you minimize taxes by selling assets with capital losses to offset the gains gained.
You can talk to a representative by phone, live chat, or email during SigFig office hours, Monday to Friday from 9 am to 6 pm Eastern Standard Time.
|Financial tool||Portfolio Tracker||Free consultant meeting|
|Combination||9 ETFs||Mix 9 asset classes|
|Automatic rebalance||Yes||Free for all accounts|
|Tax loss collection||Yes||Free for all accounts|
|account type||Individual/joint taxable||Five IRAs|
|Pricing and fees||0% of the first $10,000 fee||0.25% over USD 25,000|
|Customer Support||Phone, email and chat||9 am to 6 pm Eastern Standard Time, MF|
Pros and cons of SigFig
SigFig may be right for you, depending on which features are important to you.
- SigFig charges some of the lowest fees among the robo-advisors available. First of all, you don’t need to pay any management fee for the first $10,000 of your investment, once that amount is exceeded, it’s only 0.25%.
- Anyone who invests through SigFig can get help from a financial advisor for free-you can make unlimited appointments.
- If you have invested assets in a partner broker and don’t want to move them, you can keep them in place to save your time.
- Considering that the requirements of other competitors are much lower, the minimum account opening amount of $2,000 may be offensive to some people.
- Although you can open taxable accounts and retirement accounts, those who want other options, such as assistance with 401(k) accounts, need to look elsewhere.
Is SigFig right for you?
If you have an existing brokerage or IRA account and don’t want to manage it yourself, SigFig is a good choice. If you want to pay as little management fee as possible, this is also a good choice, because you will pay 0% of the first investment of $10,000.
However, if you do not have an account with Fidelity, Schwab, or TD Ameritrade, technically speaking, you will not be able to let SigFig manage your funds-although they may add more partner companies in the future. This means that if you don’t want to pay high management fees and potential transfer fees, then keeping your assets in a partner company is a wise choice.
If you are opening a new brokerage account, please make sure you like the services provided by TD Ameritrade because your funds will be stored there.
The free portfolio tracker is a great tool that can help you monitor external portfolio accounts, and the access to human financial advisors is not too rudimentary.
Overall, SigFig is a fair competitor because you will pay low fees through automatic rebalancing and tax loss collection services. In addition, if you don’t have an investment of $10,000 or more, you will pay less.
However, if you want more flexibility in asset selection and want to manage your entire investment portfolio (such as your 401k account), then SigFig may not be your best choice.
Frequently Asked Questions (FAQ) about SigFig
We have answered some of the most frequently asked questions about the robotic consulting platform SigFig.
What products does SigFig offer?
The two main products of SigFig’s business are their portfolio tracker and asset management services. Portfolio Tracker is a free tool where you can summarize your portfolio (even external portfolios) in order to view your investment performance. SigFig’s asset management services will balance your investment portfolio and ensure its diversification based on factors such as your risk tolerance and other financial goals. The management fee is very low.
What advice does SigFig have for my portfolio?
SigFig recommends assets based on the answers provided in your questionnaire. These answers are related to factors such as your risk tolerance, expected financial goals, and time frame. It will recommend asset allocation based on different asset classes in the ETF, which can include securities such as stocks, bonds, real estate, government bonds, and inflation-protected securities.
Are there any disadvantages to using robo-advisors?
Robo-advisors allow you to experience investing by letting brokers automatically invest your funds in allocations based on your risk tolerance and financial goals. However, investors may not have that much flexibility, depending on the robo-advisor. While some allow investors to customize some of their investment portfolios, others may not have limited securities issuances.
Contributor Sarah Li-Cain is a personal finance writer based in Jacksonville, Florida, specializing in real estate, insurance, banking, loans, and credit. She is the host of the Buzzsprout and Beyond the Dollar podcasts.