SigFig is unlike robo-investors in that it works with partnering brokerage companies — Charles Schwab, Fidelity and TD Ameritrade. If you have existing funds with the first two brokerages, SigFig will manage your assets there. Otherwise, SigFig will open an account for you at TD Ameritrade.
What Is SigFig and How Does it Work?
SigFig is a robo investing platform partnering with third-party brokerage firms — Charles Schwab, Fidelity, and TD Ameritrade. If you have current assets invested at any of these three brokerages, you’ll keep the money there and SigFig will manage them. Otherwise, if you want to open a brand new account, then SigFig will open a managed TD Ameritrade account for you.
To start, you’ll sign up for their account management service and SigFig will go to work analyzing your portfolio and make suggestions on what asset allocations are best. It’ll also continue to monitor and improve your portfolio by diversifying investments and automatically rebalance them.
The goal is to ensure you’re getting affordable advisory services and options to make your portfolio align with your financial goals. Aside from low management fees, SigFig aims to find investors’ exchange traded funds (ETFs) with low fees with the selected asset classes to help save money — average expense ratios range from 0.07% to 0.15%.
SigFig Portfolio Account
Invests in a mix of four different Vanguard ETFs
Portfolios monitored daily
This free feature allows you to link other brokerage accounts (whether or not it’s with partnering companies) so you can track how your investments are faring. You’ll get a weekly email on items such as an overall view of your portfolio’s performance, current investment news, and the week’s top securities.
This tracker won’t actively manage all parts of your portfolio, only ones with partnering brokerages you’ve opted into.
Other features of the Portfolio Tracker include life chat and phone support, reporting dashboards, and analysis of external portfolios.
Commissions and Fees
Managed accounts won’t be charged advisory fees for the first $10,000 SigFig managed for you. Once you exceed this amount, the annual advisory fee is 0.25% of your invested amount.
Of course, you’ll also have to pay fees on the assets in your portfolio — aka expense ratios for index funds, ETFs and mutual funds. These usually range from 0.07% to 0.15%. SigFig aims to get you the lowest expense ratios possible so you can keep more money towards your investments.
SigFig helps investors with creating a diversified portfolio designed to help you reach your goals. Your money will be invested in a mix of various funds based on factors such as your risk tolerance level.
Some of the assets you may find in your portfolio (represented by ETFs) include:
Developed markets stocks (international)
Emerging markets stocks
Short-term U.S. treasuries
Treasury inflation-protected securities
Emerging market sovereign debt
The portfolio management company likes ETFs that don’t have commission fees — ones from Vanguard, iShares, and Schwab are chosen. Your exact portfolio mix depends on the brokerage accounts you currently have, since there may be ETFs that are only held at one partnering company.
Since it partners with Fidelity, TD Ameritrade and Schwab, you’ll also be able to see a breakdown of the types of funds you may be able to invest in. You can see this list on SigFig’s website.
To find out more about your suggested portfolio allocation, you can log into your SigFig account and head to the “Guidance” section. The asset allocations are based on your answers from the questionnaire SigFig provided when you opened your account.
The questions are designed to help to figure out your financial goals and risk tolerance. Recommendations will change whenever you change your risk level or when you want to edit your asset allocation.
If you’re ever unsure about the process or why SigFig made certain recommendations, you can speak to a customer representative. During their business hours, you can receive a free 15-minute consultation to talk through your investment options.
Plus, you can look up more information on each underlying investment by looking at one-year historical trends to see how their portfolios performed (you can find it on their website).
Human Financial Advisors
The point of robo-advisors is that you can trust the brokerage to help you make investment decisions on your behalf using their proprietary algorithms. However, there are options if you still want the advice of human financial advisors.
Plenty of robo-advisors offer this feature, though it can come with higher account minimum requirements or to upgrade to a higher tier offering. That’s why SigFig offering unlimited financial counseling for all paid clients is a breath of fresh air.
Once you’ve signed up for SigFig’s portfolio management services, you can sign up for free consultations as many times as you want — you’ll need to schedule an appointment. Taking advantage of this service means you can get additional investing insights and other advice tailored to help with your financial well-being.
SigFig manages your portfolio based on asset allocations and asset classes it believes will best suit your financial goals. As mentioned before, SigFig will gain insight into what you want by looking at the answers you provide from the initial questionnaire.
It’ll also analyze your existing portfolio to see what your current allocations are. Then, if there are any discrepancies, it’ll highlight potential problematic parts of your portfolio and recommend an approach that’s more optimized towards your goals.
For instance, if you have existing funds that are too conservative, SigFig might recommend a more aggressive allocation, or highlight securities that have high expense ratios. It’ll also automatically rebalance your portfolio whenever it deviates from your target allocation.
Tax Loss Harvesting
SigFig offers free tax-loss harvesting for customers, no matter how much it is invested. This investment strategy helps you to minimize taxes by selling assets that have capital losses to offset gains made.
You can speak with a representative during SigFig’s office hours from Monday to Friday, 9 a.m. to 6 p.m. EST via phone, live chat, or email.
SigFig at a Glance
Free advisor sessions
Mix from 9 asset classes
Free for all accounts
Tax Loss Harvesting
Free for all accounts
Pricing and Fees
0% fee for 1st $10,000
0.25% above $25,000
Phone, email and chat
9 a.m.-6 p.m. EST, M-F
Pros and Cons of SigFig
SigFig may be a good fit depending on what features are important to you.
SigFig charges some of the lowest fees amongst available robo-advisors. For one, you don’t have to pay any management fees for the first $10,000 invested, and it’s a low 0.25% once it exceeds that.
Anyone who invests through SigFig can get the help of financial advisors for free — you have unlimited appointments.
If you have assets invested with partnering brokerages and don’t want to move them, you can keep them where they are, saving you time.
The $2,000 account opening minimum may be off-putting to some, considering other competitors have much lower requirements.
While you can open taxable and retirement accounts, those who want other options, such as assistance with their 401(k) accounts need to look elsewhere.
Is SigFig Right for You?
SigFig is a good fit if you have an existing brokerage or IRA account and don’t want to manage it yourself. It’s also a good fit if you want to pay as little in management fees as possible, since you’ll pay exactly 0% for your first $10,000 invested.
However, if you don’t have accounts with Fidelity, Schwab, TD Ameritrade, you technically won’t be able to have SigFig manage your funds — though they may add more partner companies in the future. That means if you want to stop paying high management fees and potentially transfer fees, then keeping assets with partner companies is a smart choice.
If you’re opening a new brokerage account, be sure you like what’s on offer with TD Ameritrade, as your funds will be held there.
The free portfolio tracker is a nice tool to help you monitor external portfolio accounts, and the access to human financial advisors isn’t too shabby either.
Overall, SigFig is a fair contender based on the fact that you’ll pay low fees with automatic rebalance and tax loss harvesting services. Plus, if you don’t have $10,000 or more invested, you’ll pay even less.
However, if you want more flexibility in your choices of assets, and want your entire portfolio (such as your 401k account) managed, then SigFig may not be the best option for you.
Frequently Asked Questions (FAQs) About SigFig
We’ve answered some of the most common questions about SigFig, the robo-advising platform.
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.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.