SigFig Review 2021 – Live Advisors and Low Fees

SigFig is a robo-advisor that manages your account while it is held in popular brokerage platforms, like Charles Schwab, Fidelity, and TD Ameritrade. They offer comprehensive portfolio management, and reasonable costs.

Launched in 2012, the firm boasts $835 million assets under management. The Summer 2020 analysis of the platform by Backend Benchmarking awarded the company the prestigious #1 ranking for “Best Overall Robo-advisor.”

SigFig offers live financial advisors for all customers. All you need is $2,000 to sign up for the managed accounts. As an added bonus, the company manages your first $10,000 for free!

What is SigFig?

SigFig uses science and data to help new and advanced users simplify investing.

The platform provides two different portfolio management levels, one free and the other paid:

1.  Sigfig Portfolio Tracker: Free investment tracking and analysis tool. (More details below.)

2. Managed Portfolio: A comprehensive, low-fee investment manager with many features including tax-loss harvesting.

While SigFig manages your portfolio, they don’t actually hold your money in custody. The managed account is held with either Fidelity, TD Ameritrade Institutional or Schwab. However, if your account is not held with one of these brokers, SigFig will assist in transferring your assets.

SigFig Robo Advising Features at a Glance

Who is SigFig Best for?

The free portfolio tracker is great for anyone who wants to monitor their investments, plan for retirement, and check on fees.

Even if you don’t want to sign up for a low cost SigFig managed portfolio you can still take advantage of the free Financial Tracker. It offers access to some of the services available with the paid managed portfolio option.

Another firm with free portfolio tracking and review is the Personal Capital Dashboard.

If you already hold your investments through Schwab, Fidelity, or TD Ameritrade the platform is a good choice.

Small investors, with $2,000 to $10,000 will benefit from the free investment management.

SigFig might be better diversified than some robo-advisors for passive investors, since they not only include stock and bond asset classes, but also real estate. Of course, there are other robos with real estate holdings such as Axos Invest and Wealthfront.

SigFig Robo-Advisor Drill Down

Sign-up Process – How Does SigFig Work?

Answer a few quick questions regarding:

• 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? – Take a four-question questionnaire to determine your tolerance for risk.

Once you complete the information requested, click the Build My Investment Plan button, and view your portfolio.

Your personalized portfolio is based on your money goals and risk tolerance.

What does SigFig Recommend for Your Portfolio?

The SigFig portfolio recommendations include 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.

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

After you open an account, you can change your risk level at any time by logging in and clicking the Managed tab. From there, click Edit Allocation to change your risk level, and create a new portfolio allocation consistent with that level.

SigFig Investing

SigFig uses commission-free ETFs, from Vanguard, iShares and Schwab. The funds boast low advisory fees. The current mix of funds in the Managed Portfolio includes the following funds:

Tax-advantaged Investing

SigFig’s Managed Portfolio includes tax-advantagesd investing for no additional charge. They use four different strategies in order to provide the biggest tax advantage:

1. Tax-Optimized Sales — The algorithm applies tax-efficient strategies whenever there’s a sale of a fund during rebalancing, minimizing your tax liability.
2. Tax-Loss Harvesting — This is the process of selling losing positions to offset gains on the sale of winners. This approach minimizes taxable short-term capital gains, and is not used in tax-sheltered retirement plans. (Comparable assets are later purchased to maintain the intended asset allocation). You may opt in or out for this service.
3. 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.
4. Whitelisting — If ETFs you already own are close to SigFig’s portfolio allocation, they will be kept in your account to minimize taxable capital gains.

Bonus; Best Portfolio Management Software for Investors

Rebalancing

Like all robo-advisors, your account is rebalanced regularly. That means the asset classes are returned to your preferred allocation.

If you had a 60% stock and 40% bond mix and over time stocks performed well your investments might drift to 70% and 30%. The platform would sell 10% stocks and buy 10% bond etfs to return to your preferred allocation.

The automatic rebalancing is a sound way to temper risk and might even help long term returns.

Portfolio Tracker

This is one our favorite tools. After linking accounts you’ll have access to:

• Reporting dashboards with many features
• External Portfolio Analysis-SigFig Guidance
• Built-in retirement planner. You can adjust the retirement date, standard of living, risk profile, investment strategy and more.
• Information regarding problems like poor diversification and high management fees.

Fees and Minimums

Investment management requires a $2,000 account minimum. There are no management fees or minimums for the free portfolio tracker

Newbies seeking low minimums might consider SoFi Invest or Betterment.

SigFig offers fee-free management for the first $10,000 of your portfolio. After that, the annual fee is 0.25% of AUM of your account balance. It 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.

Fund advisory fees do apply to the exchange traded funds held in the account, and those have a low 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 Fidelity and Schwab you can be certain that the account is well protected. The SIPC insures your brokerage account against losses up to $500,000, including $250,000 in cash, due to the failure of the 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.

Customer Service

We like the ease of access to customer service at SigFig:

• Live chat and phone support on the site Monday through Friday 6AM to 6PM Pacific time.
• Email 24/7.
• Schedule an appointment with a Financial Consultant.

Although, Ally Invest Managed Portfolios contact is available by phone until 11:00 PM on week-days and during the day on Saturdays.

Mobile App

The SigFig Wealth Management App is available for android and iOS devices. You can sync accounts at over 50 leading brokerages for review with the Portfolio Tracker. The SigFig app is secure and encrypts your financial information.

Users generally like the app, although a few complain that the more advanced charts and tracking are only available for the paying customers.

Pros and Cons

Advantages

• 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 money 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 and municipal bond funds for added diversification.
• 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.
• External Portfolio Analysis analyzes all of your external financial accounts, then provides recommendations on fees and diversification.
• The FREE SigFig portfolio tracker is worth it for anyone, whether you elect to use the paid service or not.

Disadvantages

• 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.
• The $2,000 account minimum might be steep for those just getting started.
• No fractional share investing available.

SigFig Robo-Advisor Review Wrap Up

SigFig is definitely one of the better robo-advisor platforms available. The free tools are 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 platform creates a smart investment strategy and is great for creating a diversified portfolio with diverse asset classes in line with your financial goals.

The low cost platform is a strong competitor for a best robo-advisor list.

For further information, visit the SigFig website.

Comparisons – SigFig Alternatives

Both Betterment and Personal Capital offer financial advisors. Personal Capital has a more comprehensive free financial dashboard than SigFig, including recommendations. Betterment has no minimum investment requirement, great for new investors.

When choosing the best investment manager for you, consider what features matter most!

Betterment vs. Personal Capital

Try the Robo-Advisor Selection Wizard for a handy way to choose a computerized investment advisor. 

Related:

• SoFi Invest Review
• Ally Invest Managed Portfolios Review
• Axos Invest Review
• Merrill Edge Guided Inesting Review
• List of Robo Advisors
• FutureAdvisor Review

*Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t believe is valuable.