Founded in 2007, SigFig Financial Management LLC is a wholly-owned subsidiary of Nvest, Inc., providing algorithmic advisory services for new accounts opened at TD Ameritrade Institutional and pre-existing funds held at TD Ameritrade, Charles Schwab, and Fidelity Investments. SigFig is a convenient way to manage your long-term portfolio if you are a current or prospective client of these three brokerages. It is perhaps best thought of as a bolt-on robo-advisor that you can access through your broker, in contrast to the stand-alone offerings made directly to individual investors. SigFig also offers a free portfolio tracker and contracts with other financial institutions to license and co-brand its advisory and management software.

Pros

  • Can talk with a financial advisor

  • Tax-loss harvesting

  • Strong performance record

  • Full-featured

Cons

  • Limited to supported brokerages

  • Little customization

  • No socially conscious funds

  • Weak goal planning

Account Setup

3.6

The onboarding process for SigFig is very simple. It asks you just six questions about age, income, risk tolerance, savings percentage, and investment horizon. A “Not Sure” button for risk tolerance opens a context menu that lets the system fill in the blank with four additional checkbox-type questions. There are no tools, calculators, or breakdowns into specific goals, while the investment horizon allows you just three entries – short, intermediate, and long term – with no definitions of what those actually mean in terms of time.

Of course, this simplicity owes largely to the fact that SigFig doesn’t offer investment accounts, but rather helps you manage existing brokerage accounts. If you don’t have a brokerage account already, SigFig facilitates setting one up. In that event, the process requires significantly more effort and time, including three to five business days before the account funds are available.

Once you have an account set up, your answers to the SigFig onboarding tool will generate a portfolio recommendation and percentage allocation that follows typical Modern Portfolio Theory (MPT). You can call a phone number under the pie chart if you want to learn more about the plan. The proposal does tell you which exchange-traded funds (ETFs) will populate your portfolio, but there’s just one security for each of nine asset classes, so the portfolio contents will match lists provided for the three supported brokerages.

You can also choose to set aside just a portion of assets for SigFig management through the account interface. SigFig offers individual and joint taxable accounts as well as traditional IRAs, Roth IRAs, and SEP retirement accounts. Clients can roll over qualified retirement plans from former employers, but SigFig does not manage 401(k) or 529 plans at this time.

The Setting Every Community Up for Retirement Enhancement (SECURE) Act expanded retirement guidelines for 2020 and beyond. For example, under the new law, required minimum distributions (RMDs) no longer have to be taken at 70.5 but at age 72. The law also removed the age limit for contributing to traditional IRA accounts.

Goal Setting

2.9

SigFig offers solid tracking tools but it falls a bit short when it comes to goal-setting resources. SigFig’s retirement and wealth-building sections can assist you with goal planning, but its well-populated blog can be tough to find because it’s poorly linked to the main pages. While those articles include goal planning topics, they lack many of the calculators or other tools to make the job easier.

The account management interface does offer timely advice through the Guidance app as well as metrics about funding levels and portfolio mix if your goals aren’t on track or your profile has changed. You can also review monthly transactions and paper trade model portfolios, as well as build watch lists.

Account Services 

3.3

SigFig provides a good balance between human and automated advice. The platform provides the following account services to discretionary clients:

  • Displaying third-party portfolios in an easily accessible interface
  • Tracking and analyzing holdings
  • Distributing real-time and delayed market data and news
  • Tax-loss harvesting
  • Recommending low-cost ETFs based on risk profile, current investments, and transaction history
  • Periodically rebalancing the portfolio

You can set up a 15-minute online appointment with a financial advisor before account funding and continue contact as long as $10,000 or more is actively managed. However, SigFig does not offer banking services, other than those already provided through third-party brokerage accounts at TD Ameritrade, Charles Schwab, and Fidelity Investments. The site also declares that “our technology tirelessly reinvests dividends,” but the FAQ states that “dividend payments will accumulate as cash in your portfolio.” It is not clear whether dividend reinvestment occurs or not. 

Portfolio Contents

2.1

SigFig populates your portfolio with low-expense and commission-free ETFs from a security universe that’s different at each supported brokerage. All three lists contain just nine funds that are sub-divided into the following asset classes: U.S. stocks, developed markets, U.S. bonds, Treasury Inflation-Protected Securities (TIPS), municipal bonds, emerging market debt, short-term U.S. Treasuries, emerging markets, and real estate. Vanguard, iShares, and Schwab ETFs comprise the bulk of securities, in line with SigFig’s low-cost investment and index methodology.

Disclosures also state that mutual funds populate portfolios, but marketing and onboarding information refer solely to ETF purchases, so the material referring to mutual funds may be out of date.

Portfolio Management

5

SigFig provides links to a white paper on a low-cost investment methodology based on MPT that boils down to the following elements:

  • Research asset classes to measure performance in different market and economic conditions
  • Select investment vehicles that provide diversification of market coverage at a lower cost
  • Create portfolios matched to a range of risk tolerances, applying MPT techniques
  • Ask clients to explain goals and preferences in order to balance investing risk with expected returns
  • Monitor and rebalance portfolios to maintain the model asset allocation

The fine print states that the rebalancing of your portfolio may occur at different time intervals, based on your portfolio characteristics. The rebalancing process follows typical methodology, increasing exposure to allocations that have shrunk below targets while decreasing exposure to allocations that have expanded above targets. You cannot add or subtract from your portfolio, but the advisory agreement allows reasonable restrictions that may replace one ETF with an alternate from a similar asset class.

User Experience

4.1

Mobile Experience:

SigFig offers dedicated and full-featured mobile apps for iPhone and Android operating systems, with robust account management functions that eliminate the need for you to log on to a personal computer. Both systems provide additional security through two-factor authentication. 

Desktop Experience:

The website is easy to navigate, highlighting major account features, services, and disclosures. Contact information can be difficult to find as it is hidden behind a small box at the bottom right of each web page. Despite some minor flaws, SigFig has done an excellent overall job of implementing account management and goal tracking services through its website.  

Customer Service

4.5

SigFig’s customer service hours are listed as 6:00 a.m. to 6:00 p.m., Monday through Friday. You can contact SigFig by telephone, live chat, or email, but “meetings” with financial advisors are conducted through a web conferencing app. As mentioned, each page on the website includes a tiny box displaying two men and the word “Questions,” leading to a live chat link that’s easily missed. Other than that, there’s no contact link on the top or bottom menus.

Telephone contact attempts produced a variety of “on-hold” delays, averaging an acceptable one minute and 33 seconds to speak with customer representatives who were knowledgeable about program details. The FAQ answers most questions, but some information has been split into a separate and possibly outdated Help app that’s linked only through FAQ answers.

Education & Security

3.6

SigFig’s educational resources could probably use a refresh. A dedicated blog features a wealth of investment, retirement, and goal planning articles as well as dozens of personal finance articles that you can access. The content is well-organized, with a search box, topic listing and an assortment of popular posts. As previously mentioned, SigFig doesn’t give you a lot in the way of calculators or tools, and most articles are somewhat dated, with the last entry more than three months prior to our review.

SigFig’s security is equal to that of other robo-advisors. The site uses 256-bit SSL encryption and other top-shelf security measures. The supported brokerages provide access to Securities Investor Protection Corporation (SIPC) insurance and excess insurance. 

Commissions & Fees

3.8

SigFig is good value for your money when it comes to commissions and fees. Although there is a $2,000 minimum deposit, the platform charges a monthly 0.25% advisory fee only after your assets exceed $10,000. You also pay fees on ETFs but the funds are chosen for their low expense ratios, averaging between 0.07% and 0.15%. There are no trading or termination fees, although ETF sales may generate miscellaneous transaction costs. 

Is SigFig a Good Fit For You?

SigFig is an excellent fit if you are already a client of TD Ameritrade, Charles Schwab, or Fidelity Investments and are looking to leverage the power of a robo-advisor in your portfolio. SigFig also boasts a strong track record of above-average performance, thanks in part to its focus on low-fee ETFs. Moreover, there is a level of comfort that comes with working through established brokerages compared to relatively new robo-advisors.

Overall, SigFig is a very affordable way to get professional help for your long-term financial goals, especially if you are just starting out and fall into the space between $2,000 and $10,000, where the service is free. You get textbook MPT recommendations and management for your portfolio and you save a lot of money that would otherwise be eaten away through fees for that advice. SigFig may be a bolt-on from your brokerage, but its features and results hold up very well against the other robo-advisors it competes with.

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Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of robo-advisors. Our 2019 reviews are the result of six months of evaluating all aspects of 32 robo-advisor platforms, including the user experience, goal setting capabilities, portfolio contents, costs and fees, security, mobile experience, and customer service. We collected over 300 data points that weighed into our scoring system.

Every robo-advisor we reviewed was asked to fill out a 50-point survey about their platform that we used in our evaluation. Many of the robo-advisors also provided us with in-person demonstrations of their platforms.

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