SigFig is a convenient way to manage a long-term portfolio, offering both advisory services to clients and a free portfolio tracker to the public. Founded in 2007, SigFig Financial Management LLC is a wholly-owned subsidiary of Nvest, Inc., providing algorithmic advisory services for client accounts. SigFig also contracts with other financial institutions to license and co-brand its advisory and management software.
- SigFig offers a free portfolio analysis tool that can uncover hidden fees, avoid overexposure to a single stock or industry, and help balance risk.
- Portfolios are invested in low-cost ETFs and diversified across nine asset classes, and are intended to give you exposure to investments both in the U.S. and internationally.
Customers' funds are managed by SigFig, but those assets are held at (and trades clear through) three partner brokers: TD Ameritrade, Charles Schwab, and Fidelity Investments. If you don’t yet have an account with one of the partners, then part of the startup process is creating an account with TD Ameritrade Institutional. You grant SigFig trading authorization on the account—and you never have to go to the partner's website or mobile app to manage the funds, though you can take advantage of other brokerage and banking services offered there.
Access to financial advisors.
Tax-loss harvesting available.
Performance records disclosed before investing.
No socially responsible options.
Goal planning limited to retirement.
Limited education offerings.
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. You are setting up a single pot of money to invest so there are no breakdowns for specific goals such as buying a home. The investment horizon is limited to just three entries – short, intermediate, and long term – which are not spelled out in terms of what those actually mean. You get to interpret your investment horizon for yourself.
It's easiest to get started if you have an existing brokerage account with Charles Schwab, Fidelity or TD Ameritrade. If you don’t, though, SigFig facilitates setting one up or transferring an existing brokerage account to one domiciled with TD Ameritrade Institutional. In that event, the process requires more effort and time, which means you'll have 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 displayed beneath the pie chart if you want to learn more about the plan. The proposal tells you exactly which exchange-traded funds (ETFs) will populate your portfolio, but there’s just one security for each of nine asset classes. The portfolio contents match ETFs available at each of the three supported brokerages. Portfolios held at Schwab or Fidelity tend to utilize their proprietary ETFs.
You can follow SigFig's recommendations at no cost, by making all the transactions in your brokerage account on your own, or you can choose to set aside a portion of assets for SigFig to manage through the account interface.
SigFig offers individual and joint taxable accounts as well as traditional IRAs and Roth IRAs. College savings 529 plans were added in the last year. Clients can roll over qualified retirement plans from former employers, but SigFig does not manage 401(k) or trust accounts 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.
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.
SigFig provides a good balance between human and automated advice. The platform provides the following account services:
- Displaying third-party portfolios in an easily accessible interface
- Tracking and analyzing holdings
- Distributing real-time and delayed market data and news
- Recommending low-cost ETFs based on client's 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.
No interest is paid on cash balances. Dividend payments accumulate as cash, which is used to pay the management fees, and any excess is reinvested when there is enough on hand to purchase your most underweight holding.
SigFig does not offer banking or cash management services for its managed accounts, but clients can use those provided through their brokerage accounts at TD Ameritrade, Charles Schwab, and/or Fidelity Investments.
SigFig populates your portfolio with low-expense 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. There are a total of 40 portfolios available (20 taxable and 20 tax-advantaged) made up of ETFs.
- Vanguard, iShares, and Schwab ETFs comprise the bulk of securities, in line with SigFig’s low-cost investment and index methodology.
- There is no socially-responsible investing option.
If you've already got an account at a partner brokerage that contains mutual funds, the portfolio development tool will consider them as candidates for your portfolio. There aren't any mutual funds that are used otherwise.
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 investment risk with expected returns
- Monitor and rebalance portfolios to maintain the model asset allocation
- Tax Loss Harvesting is available for taxable accounts
Rebalancing of your portfolio may occur at different time intervals, based on your portfolio characteristics. A 3-5% drift from the model triggers a rebalance. 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 ETFs that are not on SigFig's list to your portfolio, but the advisory agreement allows reasonable restrictions that may replace one ETF with an alternate from a similar asset class.
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.
The website is easy to navigate, highlighting major account features, services, and disclosures. If you have questions, there is a ubiquitous box at the bottom right of each page that, when clicked on, displays a phone number or lets you schedule a call with an advisor. SigFig has done an excellent overall job of implementing account management and goal tracking services through its website.
SigFig’s customer service hours are listed as 6:00 a.m. to 3:00 p.m., Monday through Friday. You can contact SigFig by telephone, live chat, or email, or schedule a meeting with a financial advisor through a web conferencing app.
When we first tested SigFig's telephone support services during the summer of 2019, 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. Since then, SigFig has eliminated phone support for its free portfolio recommendation service, and the firm assures us that wait times have dropped to approximately 15 seconds. The FAQ is well-organized and answers most questions.
Education & Security
SigFig’s educational resources are primarily dedicated to retirement planning. The site's blog, however, has gone missing; a click results in "404 - Page Not Found" as of April 2020. 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 site uses 256-bit SSL encryption and other top-shelf security measures. A company representative assures us that SigFig’s security is “military grade” since they can partner with several top financial institutions. The supported brokerages provide access to Securities Investor Protection Corporation (SIPC) insurance and excess insurance.
Commissions & Fees
SigFig is a 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.
- Monthly cost to manage a $5,000 portfolio: $0
- Monthly cost to manage a $25,000 portfolio: $5.21
- Monthly cost to manage a $100,000 portfolio: $20.83
Is SigFig a Good Fit For You?
SigFig is an easy addition to your money management 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's features and results hold up very well against the other robo-advisors it competes with.
Investopedia Robo-Advisor Rating Methodology
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Overall Star Rating Explained
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The Review Process
To evaluate these platforms, we sent questionnaires with over 100 queries to the participating robo-advisories. Most of the companies we reviewed gave us socially-distanced video demonstrations of their platforms and services during August 2020.
From the questionnaires, the hands-on testing of the platforms, and the platform demonstrations, we scored each category and then combined the category scores into an overall rating for each robo-advisor. Each category covers the critical elements users need to thoroughly evaluate a robo-advisor.