If you’re looking for an affordable robo-advisor for your retirement account or investment account, SigFig offers free management for accounts up to $10,000. After that, you’ll pay 0.25% which is comparable to Wealthfront and Betterment.
This robo-advisor is for those who are tech-savvy and enjoy keeping an eye on their finances on the go. All accounts come with a free portfolio tracker, and there's a useful mobile app, which is not something you’ll see across the robo-advisor field.
However, the $2,000 account minimum seems high when compared to other free management services that have $1 or $500 as a minimum. For now, you’re also limited to taxable accounts and retirement accounts as SigFig doesn’t offer trusts or 529 college savings plans (though it says it’s working on it).
Investors looking for a simple and easy interface; Free portfolio tracking
Small selection of account options; $2,000 account minimum
Pricing: How Much Does SigFig Cost?
|Investment Option||Management Fee||Minimum Balance||Features|
|$2,000 - $10,000||$0||$2,000||Live chat and phone support, investment advisor|
|$10,001+||0.25%||$10,000||Live chat and phone support, investment advisor|
$2,000 - $10,000
SigFig, like most robo-advisors, doesn’t charge commission, transaction or trade fees. The funds bought with your account don’t have trading commissions either. Some of the ETFs that will make up your portfolio will have a management fee, also called an expense ratio. SigFig strives to find ETFs with low or appropriate fees for the asset class in order save you as much money as possible. The average expense ratio is 0.07% to 0.15%.
After you break the threshold of $10,000, your account will have a 0.25% annual fee. This fee is billed monthly and will be deducted from your account automatically. A small portion of cash will remain in your account to pay for the fee, it won’t get pulled from an investment.
If you stay below the $10,000 mark, your managed account will have no annual fee. To open an account, you will need to deposit at least $2,000, but you’ll get all the same features as a managed account without paying the advisory fee up until you go over $10,000.
At any time, you can cancel your account penalty-free. You just have to give the company a call to initiate the request.
SigFig's Investing Strategy
SigFig promises an efficient, well-diversified portfolio invested in a mix of funds depending on your risk level. The company favors commission-free exchange-traded funds (ETFs), such as funds from Vanguard, iShares and Schwab. It's partnered with three supporting brokerages: Fidelity, TD Ameritrade and Schwab. For each brokerage, there’s a breakdown of the exact funds the company invests in. If you’re curious and want to know more, you can find that list under the frequently asked questions page on SigFig’s website.
Wondering about your proposed portfolio? You can find it under the “Guidance” tab in your SigFig account. The suggested portfolio is based on the questions you answered when opening the account. Those questions helped determine your risk tolerance and overall financial goals. You can change the risk level at any time and you can choose a new portfolio by editing your allocation.
SigFig identifies nine key asset classes to help get the biggest returns and to diversify your portfolio. If you ever want to speak with a human about the process, 15-minute investment consultations are offered during weekday business hours, free of charge.
Looking for more information, such as historical performance? You can get a one-year historical back test that’ll show you how various portfolios performed. You can email the company to get that information.
SigFig offers individual or joint taxable investment accounts, and all IRA types: Roth, tradition, rollover and SEP.
- Taxable Accounts
- Roth IRA
- SEP IRA
SigFig offers two services: a free portfolio tracker and a free-to-0.25%-fee managed account.
The online portfolio tracker is free and available for anyone to use. It provides one place to see all of your investments, across any number of banks, a place for you to track your current portfolio. You’ll get reporting dashboards and external portfolio analysis with the free portfolio tracker. It’s an option for you if you’d just like to monitor and analyze all of your accounts in one spot online.
The other service offered is managed accounts, which are free until you exceed $10,000. Once you do, you’ll start paying the advisory fee of 0.25%. All managed accounts, regardless of account balance, come with a wide variety of features. You’ll get all the same monitoring services as with the free portfolio tracker and on top of that, you’ll add some premium features such as tax-loss harvesting and tax-optimized sales. Those two features are for taxable accounts, also known as investment accounts, and will help you save money come tax season.
All accounts receive automated rebalancing, which means if your investments drift off the course of your original portfolio allocation, funds will be bought or sold to automatically bring you back on track.
A feature that’s unique to managed accounts is a live investment advisor you’ll have access to over the phone. You’ll also have live chat and phone support for any account as well, which means if you have any questions, you’ll always have a route to an answer.
With a managed account, you’ll also have cash optimization and automated reinvesting, two actions that’ll help keep your money invested and working, rather than sitting in your account.
For the tech-savvy, there's an award-winning iPhone and Android app. You can track your investments on the go and monitor your investment accounts in a dashboard that displays current status and a personalized investment strategy.
Who SigFig Is For
If you already have an IRA or investment account and would rather not manage it yourself, or pay fees for a broker to actively manage it, SigFig may be a good fit. Customers of brokerages such as Fidelity, Schwab, TD Ameritrade, Vanguard, Wells Fargo and more can sync with SigFig easily. The company is partnered with some of the largest financial institutions to provide robo-advisor services. This means if you already have an IRA or other investment account with a financial institution, you could hand off the day-to-day management to SigFig and save money on active brokerage fees. It also means you wouldn’t have to liquidate your account to open a new account at SigFig, the management would just transfer to the company, which saves you trading fees.
The free portfolio tracker is also a great service for those who want to monitor multiple accounts in one location. Since it’s free, there’s not much of a downside to the service.
And for those looking for an all-around decent robo-advisor, SigFig’s fees are comparable to market competitors, which makes the company a good choice for the average investor. You can also receive all the tax advantage services for free, if you have an account under $10,000, which is unique among many competitors that save the service for premium accounts only.
- Tax Loss Harvesting
- Automatic Rebalancing
- Human Advisors
- Direct Indexing
- Fractional Shares
How SigFig Works
When you sign up for a managed account, you’ll be asked a number of questions to determine your risk tolerance. You’ll need your financial information including income, assets and date of birth, along with other information to get going. As for funds, you’ll need at least $2,000 to open an account. You’ll deposit the initial funds by linking an external bank account. Once you’ve funded your account, investments will be made based off of your recommended portfolio.
If you already have an account at TD Ameritrade, Fidelity or Schwab, SigFig will be added as an advisor and your account will be managed at the brokerage by SigFig. If you’re adding an external account to SigFig, it’ll be moved to TD Ameritrade and SigFig will manage the funds from there.
You can change your risk level at any time, which will cause your portfolio to be adjusted. You can login to your account or call to do so. When you want to withdraw money, you can send funds to your linked external checkings or savings account.
As for monitoring your account, you can use the website or the mobile app. Either option will show you your investments in a dashboard display, making it simple and easy to keep an eye on your nest eggs.
What’s the Catch?
The biggest downside to SigFig is the lack of account options. You can only choose from IRAs or taxable accounts. The company doesn’t offer college savings plans, trusts, business accounts or other investment options. On the product side, it’s sparse compared to many other robo-advisors.
Another prominent downside is the minimum deposit of $2,000. This means the company doesn’t have the option to invest in fractional shares, and it’s also a barrier to entry for those looking to open an account with more modest funds.
And finally, the company seems to be positioned as a middleman between large banks and robo-advisors. Instead of offering its services independently, all accounts are partnered with a bank, such as TD Ameritrade.
Competition: How SigFig Stacks Up?
SigFig ranks decently next to competitors. Not only does it offer a free portfolio tracker, something that’s rather unique in the robo-advisor field, but you can also have a free managed account up to $10,000. Wealthfront is similar in that the company also doesn’t charge fees for $10,000 and below. Where Wealthfront differs is that the minimum deposit is $500 compared to SigFig’s $2,000. You also can find more account options at Wealthfront such as college savings plans. However, you won’t get a live advisor with Wealthfront, which SigFig offers with all managed accounts.
If you’re looking for an entirely free robo-advisor, there’s WiseBanyan. However, with WiseBanyan you’ll have to pay extra for tax-loss harvesting and other tax strategies, which SigFig offers for all managed taxable accounts.
As for tech, SigFig has one of the better mobile apps, if that’s something you find important. Business Insider and Google Play have rated it as one of the better robo-advisor apps, and general user reviews are positive.
If you’re looking for a different portfolio strategy than what SigFig offers, you’ll have to look at Hedgeable. It’s one of the few robo-advisors that differs from “modern portfolio theory,” which is what the vast majority of the big-name advisors, including Betterment, Wealthfront and SigFig, subscribe to. However, Hedgeable has higher advisory fees, and starts off at 0.75% for $1 and up. Fees go down as your account grows, but only reach comparable levels to SigFig when you invest $1 million or more.
Lastly, you likely won’t be satisfied with SigFig’s account offerings if you’re looking to open multiple accounts for different purposes under one robo-advisore. The company is solidly rooted in the traditional offerings of retirement accounts and taxable accounts. If you’re looking for a wider range of choices such as trusts and 401(k)s or other alternate accounts, you may have better luck with Betterment or Wealthfront.
Bottom Line: Should You Use SigFig?
If you already have an IRA or investment account with one of SigFig’s bank partners, it might be in your best interest to use its services for account management rather than opening an account with a competitor, such as Wealthfront or Betterment. It could save you fees, and make the process simpler, but it’s up to you and your financial situation. If you’re shopping around for the most features for the lowest advisory fee, SigFig does stack up with fees around the same price as competitors. You also get a live advisor with the company and the fees don’t increase as you hit higher balance numbers. Plus, the company offers free historical performance, which allows you to make an informed choice. Overall, if you’re opening one of the accounts offered, it’s a solid choice for a robo-advisor.