Staff Columnist, Kevin Mercadante
SigFig Robo-Advisor Expert Review
SigFig is a robo-advisor that manages your account while it is held in popular investment brokerage platforms, like Schwab, Fidelity, and TD Ameritrade. They offer comprehensive portfolio management, and at very reasonable fees.
SigFig provides two different portfolio management levels, one free and the other paid:
1. Sigfig Portfolio Tracker: Free investment tracking and analysis tool.
2. Managed Portfolio: A comprehensive investment manager with many features including tax-loss harvesting.
In fact, SigFig was listed as one of The Robo Report’s best performing robo-advisors, according to ThinkAdvisor.
Contents
- SigFig Robo-Advisor Expert Review
- SigFig Robo Advising Features at a Glance
- What Differentiates SigFig Robo Investing From Competitors
- Who Benefits from the SigFig Financial Advisor Robo?
- SigFig Features and Fees
- SigFig Pros and Cons
- How SigFig Compares – SigFig Alternatives
- SigFig Robo-Advisor Review Wrap Up
SigFig Robo Advising Features at a Glance
| Overview | Automated investment management robo-advisor that lets you keep your investments in an existing brokerage account. |
| Minimum Investment Amount | $2,000 for the Managed Portfolio |
| Fee Structure | 0.25% of AUM above $10,000 |
| Top Features | Can work with your existing brokerage accounts; 24/7/365 customer contact; Full suite of tax-advantaged investment strategies, including tax-loss harvesting |
| Free Services | $10,000 managed for free. Offers free Portfolio Tracker; Mobile app – iPad, iPhone and Android |
| Contact & Investing Advice | Available by email 24/7, live chat, or phone, during normal business hours. Financial advisors available for managed account holders. |
| Investment Funds | Low-cost, commission-free ETFs primarily from Vanguard, iShares and Charles Schwab |
| Accounts Available | Individual & joint investment accounts. Roth, Traditional, SEP, Simple & rollover IRAs. |
| Promotions | First $10,000 is managed for free |
What Differentiates SigFig Robo Investing From Competitors
SigFig Free Portfolio Tracker
Even if you don’t want to sign up for a SigFig managed portfolio you can still take advantage of the platform’s free Portfolio Tracker. With the SigFig Free Portfolio Tracker you have access to some of the services available on the managed portfolio, including:
• Investment Account Sync
• Portfolio Tracker
• Reporting Dashboards
• External Portfolio Analysis-SigFig Guidance
• Live Chat/Phone Support
While SigFig manages your portfolio, they don’t actually hold your money in custody. The account is held in either Fidelity, TD Ameritrade Institutional or Schwab accounts. However, if your account is not held with one of these brokers, SigFig will assist in transferring your assets.
Don’t worry, you’re in complete control of the funding of the account. Only you can direct the movement of cash in or out of your account – SigFig helps you manage the funds in the account by syncing everything in one place. Meanwhile, all accounts come with SIPC (Securities Investor Protection Corp) coverage for up to $500,000, including $250,000 in cash.
Another firm with free portfolio tracking and review is the Personal Capital Dashboard.
Tax-advantaged Investing
Tax-advantaged investing is available on SigFig’s Managed Portfolio at no additional charge. They use four different strategies in order to provide the biggest tax advantage:
- Tax-Optimized Sales — Tax-efficient strategies are applied whenever SigFig sells investments during rebalancing, minimizing your tax liability.
- Tax-Loss Harvesting — This is the process of selling losing investment positions to offset gains on the sale of winning investments. It’s generally used to minimize taxable short-term capital gains, and is not used in tax-sheltered retirement plans. (Comparable investment positions are later purchased to maintain the intended asset allocation). SigFig provides this service at your option.
- Tax-Efficient Migration — SigFig concentrates income generating assets in tax-sheltered accounts, while capital gain-generating assets are held in taxable accounts, to take advantage of lower capital gains tax rates.
- Whitelisting — If investments you already own are close to SigFig’s portfolio allocation, they will be kept in your account to minimize taxable capital gains.
Who Benefits from the SigFig Financial Advisor Robo?
Is SigFig right for you?
- SigFig is an excellent choice if you already hold your investments through Schwab, Fidelity, or TD Ameritrade. It’s also an excellent choice for small investors, since the first $10,000 of your portfolio is managed for free.
- SigFig might be better than some robo-advisors for passive investors, since they not only include a portfolio of stocks and bonds, but also real estate. Of course, there are other robo-advisors with real estate holdings such as WiseBanyan and Wealthfront.
- The tax-advantaged investing package is quite comprehensive within the robo-advisory pool.
SigFig Features and Fees
In addition to the tax-advantaged features and free portfolio tracker, there’s more to investigate.
Features Available with the SigFig Managed Portfolio
- Investment Account Sync — SigFig syncs all of your investment accounts to enable you to view your holdings in one place.
- Free Portfolio Tracker — Track the performance of all your investment accounts.
- Reporting Dashboards — Provides reports on investment performance over time, including fee breakdowns, holdings summary, and other important statistics.
- External Portfolio Analysis — SigFig Guidance analyzes your external investment accounts, then provides recommendations on fees and diversification.
- Live Chat/Phone Support — 24/7 customer contact, 365 days a year, by phone, email or live chat. Email only during non-business hours and week-ends. While Ally Invest Managed Portfolios is available by phone until 11:00 PM on week-days and during the day on Saturdays.
- Investment Advisor — Free consultation with an investment advisor to discuss your investment strategy. Easy online financial advisor appointment signup.
- Personalized Portfolio Allocation — A personalized portfolio is designed for you based on your investment goals and risk tolerance.
- Cash Optimization — Keeps your money reinvested to minimize cash drag.
- Automated Rebalancing — Your account is monitored daily, and is rebalanced when there’s a significant change from your predetermined asset allocation.
- Automated Reinvesting — Dividends and extra cash are automatically reinvested to keep your portfolio fully invested at all times. A small amount of cash is held to pay the management fee, then all other cash is invested.
- Tax Benefits—The four benefits listed above—Tax-Optimized Sales, Tax Loss Harvesting, Tax-Efficient Migration, and Whitelisting—are all included as well.
Bonus; Best Portfolio Management Software for Investors
SigFig Investing
SigFig uses commission-free ETFs, from Vanguard, iShares and Schwab. The current mix of funds in the Managed Portfolio includes the following funds:
| Asset Class | Fidelity | TD Ameritrade | Charles Schwab |
|---|---|---|---|
| Treasury Inflation Protected Security | TIP | TIP | SCHP |
| US Bonds | AGG | AGG | SCHZ |
| Short-Term Treasuries | SHY | SHY | SCHO |
| Emerging Market Bonds | EMB | PCY | PCY |
| US Municipal Bonds | MUB | MUB | TFI |
| US Equity | ITOT | VTI | SCHB |
| Developed Market International Stock | IEFA | VEA | SCHF |
| Emerging Market International Stock | IEMG | VMO | SCHE |
| Real Estate | FREL | VNQ | SCHH |
SigFig Sign-up Process – How Does SigFig Work?
Learn how to open an account with SigFig next.
Signing up for SigFig takes place online. You are directed to a screen that asks you to provide the following information:
- Your age
- Your investment time horizon – less than five years, 5 to 10 years, or 10+ years
- Household income
- Amount of income that you save
- Amount of your liquid assets
- Your risk tolerance
The risk tolerance is a self-evaluation that gives you the following choices:
- Very Low – Any loss would be intolerable.
- Low – You would tolerate losing up to 10% of your value in a market downturn.
- Medium – You would tolerate losing up to 25% of your value in a market downturn.
- High – You would tolerate losing up to 50% of your value in a market downturn.
- Very High – You would tolerate losing more than 50% of your value in a market downturn.
- Not Sure? – You’re directed to take a four-question questionnaire to determine your tolerance for risk.
Once you complete the information requested, you click the Build My Investment Plan button, and you’ll be shown your portfolio.
What does SigFig Recommend for Your Portfolio?
The SigFig portfolio recommendations includes various mixes or asset allocations of stock bond and real estate funds. The proportions vary based upon your risk tolerance level. More conservative investors will have greater percentages of bond funds while more aggressive portfolios lean towards heavier stock fund allocations.
After answering the quick risk and goals questionnaire, you get chart of your recommended asset mix. One of the reasons we like SigFig is that you can change your asset percentages with a quick shift of the asset allocation slider bar.
Portfolio Recommendations
This moderate asset allocation includes:
62% Stock Funds:
- 35% U.S. Equity ETF
- 14% International Developed Market International Equity ETF
- 13% International Emerging Market International Equity ETF
38% Bond Fund ETF
- 5% Short Term Treasury Bond ETF
- 6% TIPS (inflation-protected) Bond ETF
- 24% U.S. Investment Grade Bond ETF
You can also change your risk level at any time by logging into your SigFig account, and then clicking the Managed tab. From there, click Edit Allocation to change your risk level, and create a new portfolio allocation consistent with that level.
What are SigFig Fees?
SigFig manages the first $10,000 of your Managed Portfolio for free. After that, the fee is 0.25% of your account balance, which is charged on the last business day of the month, and deducted from the uninvested cash balance in your account.
There are no commissions or other transaction fees charged to your account. Investment fees do apply to the ETFs held in the account, and those have an average expense ratio of between 0.07% and 0.15%.
The .25% management fee is low among the robo-advisors with financial advisors.
Is SigFig Safe?
Account security is paramount and because your accounts remain at the brokerage firms like TD Ameritrade and Schwab you can be certain that the account is well protected. Your brokerage account assets are protected by SIPC which insures against losses up to $500,000 due to the failure of the investment firm.
Of course, when investing in the financial markets, you aren’t protected in the normal ups and downs in value of your stock, bond and real estate funds.
SigFig Customer Service
We like the ease of access to customer service at SigFig:
- Live chat and phone contact on the site Monday through Friday 6AM to 6PM Pacific time.
- Email 24/7.
- Schedule an appointment with a Financial Consultant.
Sigfig App
The SigFig Wealth Management App is available for android and iOS devices. You can sync accounts at over 50 leading brokerages for investment for review with the Portfolio Tracker. The SigFig app is secure and encrypts your financial information.
SigFig Pros and Cons
SigFig Robo Advising Pros
- SigFig allows you to keep your portfolio at Schwab, TD Amertrade Institutional or Fidelity – that’s great if you already have accounts at those firms.
- The management fee of 0.25% is well below the 1.00 – 1.50% charged by traditional investment managers; the first $10,000 is managed for free, which is great news for smaller-scale or beginning investors.
- Your portfolio is invested in stocks and bonds, but also real estate, which adds an extra layer of diversification to the investment mix.
- You have the ability to adjust your risk tolerance, and thereby change your portfolio allocations is important.
- The comprehensive tax-advantaged investing strategy is among the best available.
SigFig Robo Advising Cons
- If you don’t invest with Fidelity, Schwab, or TD Ameritrade, you will have to change accounts over to TD Ameritrade, and you might incur taxable expenses. This isn’t terribly uncommon, though; most other robo-advisors require you to transfer your funds to their platform.
- Though they do offer the free Portfolio Tracker, it’s very limited in the service level it provides.
How SigFig Compares – SigFig Alternatives
Both Betterment and Personal Capital offer financial advisors. While Personal Capital has a more comprehensive free investment dashboard, including recommendations. When choosing the best robo-advisor for you, consider what features matter most!
SigFig vs. Betterment
| SigFig | Betterment | |
|---|---|---|
| Overview | Automated investment management robo-advisor that lets you keep your investments in an existing brokerage account. | A goals based automated investment advisor. Betterment bills itself as, "Investing Made Better." Offers a variety of human financial planning options. |
| Minimum Investment Amount | No minimum amount for access to free tools. $100,000 minimum for access to paid investment management services. | There is no minimum investment amount required for Digital. $100,000 required for premium. |
| Fee Structure | $2,000 for the Managed Portfolio. | Digital-0.25% AUM up to $2 million. Premium-0.40% AUM up to $2 million Reduced fees above $2 million. |
| Top Features | Can work with your existing brokerage accounts; 24/7/365 customer contact; Full suite of tax-advantaged investment strategies, including tax-loss harvesting. | Goal-based ETF investment portfolio. Rebalancing. Tax-loss harvesting. SRI, smart beta + income portfolios. Human financial advisor access. |
| Free Services | $10,000 managed for free. Offers free Portfolio Tracker; Mobile app – iPad, iPhone and Android. | See promotions. |
| Contact & Investing Advice | Available by email 24/7, live chat, or phone, during normal business hours. Financial advisors available for managed account holders. | Phone and email support, 7 days per week. |
| Investment Funds | Low-cost, commission-free ETFs primarily from Vanguard, iShares and Charles Schwab. | Low-cost, commission-free ETFs. |
| Accounts Available | Individual & joint investment accounts. Roth, Traditional, SEP, Simple & rollover IRAs. | Single + joint taxable brokerage. Roth, traditional, rollover + SEP IRA. Trust. |
| Promotions | First $10,000 is managed for free. | Free management fee promotion in effect (time limited) |
Personal Capital vs. SigFig
| Personal Capital | SigFig | |
|---|---|---|
| Overview | Personal Capital offers stellar free investment management tools. Their paid money management platform is comprehensive, & includes financial advisors for all. | Automated investment management robo-advisor that lets you keep your investments in an existing brokerage account. |
| Minimum Investment Amount | No minimum amount for access to free tools. $100,000 minimum for access to paid investment management services. | $2,000 for the Managed Portfolio. There is no minimum to use the free Portfolio Tracker. |
| Fee Structure | Zero fees for access to free investment management tracking & recommendations. Paid investment management charges graduated fees. For assets between $1,000,0000-$3,000,000 .89% of AUM. Fee drops to 0.49% for accounts over $10,000,000. | 0.25% of AUM above $10,000. |
| Top Features | Paid feature includes access to dedicated financial advisor. Investment & financial account analysis & recommendations, retirement planner, rebalancing, tax-loss harvesting, saving & spending tracker, retirement planner & more. | Can work with your existing brokerage accounts; 24/7/365 customer contact; Full suite of tax-advantaged investment strategies, including tax-loss harvesting. |
| Free Services | Spending, saving & investment transaction & performance reports. Retirement & 401(k) fee analyzers. Net worth tracker. Asset Allocation report. Recommendations for improvement & more. | $10,000 managed for free. Offers free Portfolio Tracker; Mobile app – iPad, iPhone and Android. |
| Contact & Investing Advice | Phone M-F 6 am-6 pm PT Email-24/7 | Available by email 24/7, live chat, or phone, during normal business hours. Financial advisors available for managed account holders. |
| Investment Funds | Free service-analyzes your existing investments. The paid Personal Capital Advisors invests in individual stocks (for large accounts) & stock, bond & alternative ETFs. | Low-cost, commission-free ETFs primarily from Vanguard, iShares and Charles Schwab. |
| Accounts Available | Individual + joint investment accounts. Roth, traditional, SEP + rollover IRAs. Trusts. | Individual & joint investment accounts. Roth, Traditional, SEP, Simple & rollover IRAs. |
| Promotions | Superb free money and investment management dashboard. | First $10,000 is managed for free. |
Try the Robo-Advisor Selection Wizard for a handy way to choose a computerized investment advisor.
SigFig Robo-Advisor Review Wrap Up
SigFig is definitely one of the better robo-advisor platforms available. The free portfolio tracker is an attractive feature, although Personal Capital’s free financial dashboard includes monitoring of all financial accounts, while SigFig analyzes and tracks only investment accounts.
The fact that they include real estate in your portfolio, while not entirely unusual, is not exactly common either. It offers an extra layer of diversification to your portfolio, particularly during times when real estate is performing well. The fee structure on the Managed Portfolio matches that of more popular robo-advisors, like Betterment and Ellevest.
For further information, visit the SigFig robo-advisor site.
