The company’s investment strategies work to analyze, monitor and improve any portfolio, automatically balancing and diversifying investments while reducing risk and minimizing fees. SigFig’s goal is to be a middleman between retail investors and advisors while offering you options to stay on top of your investment portfolio.
SigFig offers two tiers of products:
- Portfolio Tracker — A free tracking tool that aggregates your entire investment portfolio in one place. Cost: free. Minimum investment: none.
- Asset Management — Keep your portfolio balanced and diversified while maximizing your investment earning potential. Cost: free for the first $10,000; after that, 0.25% per year. Minimum investment: $2,000.
Once you’ve linked all of your investment accounts, SigFig gives advice and shows the performance of your entire portfolio.
The Holdings section of the site could be very useful if you have multiple accounts with different brokers (and who doesn’t?). The functionality is very similar to Quicken. SigFig gives a great bird’s-eye view of your complete portfolio.
Within SigFig, you can import only brokerage firms. Unlike with Mint.com or Personal Capital, you can’t manage your credit card or checking accounts. So it may not be the best app aggregator for all your financial accounts.
|Fees||First $10k managed free; 0.25%/year for $10k+; 0.50% for Diversified Income Portfolio|
|Tax Loss Harvesting|
Daily, Weekly, Monthly, Bimonthly and Quarterly
|Customer Service||Phone: M–F 6A–6P PT; Live Chat: M–F 6A–6P PT; Email|
- Tax Loss Harvesting (TLH) — SigFig offers this feature, which has become increasingly common among robo advisors. But SigFig takes a more holistic strategy with investment tax consequences. In addition to TLH, it also provides tax-optimized sales (strategies to minimize taxes from rebalancing) and tax-efficient migration (income-generating investments are held in tax-sheltered accounts). SigFig also engages in “whitelisting” when you first open an account. That’s a process whereby investments that you already hold in your portfolio are retained, as long as they are close to the SigFig allocation. This minimizes the capital gains taxes that might result from SigFig completely revamping your existing portfolio. TLH requires a minimum account balance of $10,000.
- SigFig Mobile Apps — SigFig currently has apps for iPhone, iPad, iTouch, Apple Watch, Android and Windows 8 tablet. For this review of SigFig, I tested the iPhone app.Once you set up your account via their website, it’s pretty easy to set up on your mobile device too. The mobile app functionality is very similar to the desktop version, which is why we named it one of the best investment apps for smartphones.
- Automatic Dividend Reinvesting — Dividends are automatically reinvested. And new cash contributed to the account is also invested for you. The intent is to minimize “cash drag” by keeping your account fully invested at all times. The account will hold only enough cash to pay the management fee.
- Account Security — SigFig manages your account, but it does not actually take custody of the funds. Your account is actually held through either Fidelity, Schwab or TD Ameritrade. Each of those brokers maintains coverage through SIPC. That means that your account is protected for up to $500,000 in cash and securities (including $250,000 in cash) in the event of broker failure. (SIPC coverage does not extend to losses due to market factors.)
According to Gregg, a representative of the company, analyzing data from $350 billion in tracked assets led to the discovery that 90% of investors in the service had costly problems, from cash flow drag to poor diversification. In an effort to rectify this, SigFig launched a feature called SigFig Guidance.
This is a free automated tool that uses findings from investor data to optimize your portfolio in minutes and find ways to help you stop losing money. By simply connecting any investment account to SigFig, SigFig Guidance instantly diagnoses common problems and offers unbiased, personalized recommendations for how to manage risk, improve returns and lower fees.
Just like FutureAdvisor, SigFig connects to existing accounts; most of the other robo advisors require investors to hand over cash in order to properly invest. It takes only three minutes to analyze your portfolio, identifying common investor mistakes.
Here's how it works:
- Enter the credentials for your investment accounts and answer the questions on the risk assessment questionnaire.
- Guidance analyzes your portfolio and drills down to compare and contrast current allocations.
- Your report flags problematic aspects in your investments and recommends an optimized portfolio that avoids common mistakes.
SigFig's Three Product Tiers
The Portfolio Tracker feature is completely free and entails getting a weekly email summary of how your investments are doing. This weekly report includes this week’s top movers, the latest portfolio news and a snapshot of your portfolio performance.
Of course, it doesn’t actively manage your portfolio. But it does provide a high-altitude assessment of your holdings on an ongoing basis.
Use of the Portfolio Tracker also comes with access to other SigFig services, including Investment Account Sync, Reporting Dashboards, External Portfolio Analysis and live support (phone and online chat).
This is SigFig's primary product offering. It includes the following services:
- Investment Account Sync
- Portfolio Tracker
- Reporting Dashboards
- External Portfolio Analysis
- Live support (phone and chat)
- A free consultation with an investment advisor to discuss your investment strategy
- Personalized Portfolio Allocation
- Cash Optimization (to minimize “cash drag” on invested funds)
- Automatic rebalancing
- Automatic reinvestment
SigFig Asset Management requires a minimum investment of $2,000. It's free for the first $10,000 invested, after which you'll be charged an annual advisory fee of 0.25%.
The Asset Management investment mix is comprised of the following asset classes:
- U.S. Stocks
- Developed Markets (non-U.S.) Stocks
- Emerging Markets Stocks
- Real Estate
- U.S. Bonds
- Treasury Inflation-Protected Securities
- Municipal Bonds
- Emerging Market Sovereign Debt
- Short-Term U.S. Treasurys
Each asset class will be represented by a single exchange traded fund (ETF). The ETFs are commission-free and selected from Vanguard, Schwab, and iShares. The exact mix of ETFs will depend upon the brokerage account that you have. For the most part, there will be a set of ETFs unique to accounts held at Fidelity, Schwab or TD Ameritrade.
|Minimum to Open Account||$100,000||$0||$2,000|
|Advice Options||Automated, Human Assisted||Automated, Human Assisted||Automated|
|Socially Responsible Investing|
How to Open an Account With SigFig
To start, we suggest trying out the Portfolio Tracker for free. It takes about 60 seconds to create a new account and input your brokerage information.
You will then be taken to the “Overview” section, where you can either add more accounts to your portfolio or see all of your investments at a glance. SigFig will show your overall balance and current holdings, as well as the U.S. stock market ratings of assets in your portfolio.
Below this, you’ll see a breakdown in which you can select “View Holdings” to see all the details. If you click on the “Report Card” tab, you’ll see the current standing of your portfolio and how it stacks up to the market.
Take it one step further and optimize your portfolio with suggestions based on your risk tolerance and several other factors. This process takes only a few seconds to complete, as you’ll be asked a series of questions, including:
- Your age
- Your investment time horizon — less than five years, five to 10 years, or 10-plus years
- Your household income
- The amount of your income that you save
- The amount of your liquid assets
- Your risk tolerance
You’ll then be asked to do a self-evaluation that will determine your risk tolerance. You’ll be asked a series of questions that will determine your reaction to losing money in your portfolio. That will enable SigFig to more precisely optimize your portfolio allocations.
Using SigFig as an aggregator is great, and the comparison features, daily updates and fee breakdown really give you a good sense of your portfolio. However, while SigFig’s financial advisors may be unbiased, the service does recommend funds loaded with fees.
Also on the downside, SigFig’s calculations do not take into account a longer time frame and rely too much on the Sharpe Ratio for future performance. The recommended portfolio advice is just OK, as it can be very inaccurate if taken at face value. And the recommendations seem to focus on the previous performance of the various ETFs or mutual funds you own, rather than a good asset allocation mix.
We would recommend using SigFig for the aggregation features and not so much for the recommendations.