SigFig Review – A Robo-Advisor with Free Human Advice
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Fast Facts
Account minimum:
$2,000
Cost:
Free for the first $10,000, 0.25% annually thereafter
Access to human advisor:
Yes; for free
Portfolio rebalancing:
Yes
Cash management account:
No
Investment type:
Pre-built portfolios
Robo-advisors are all the rage these days. The global robo-advisor market share is expected to grow to $135 billion by 2026, the Business Research Company estimates.
Robo-advisors like SigFig provide automated investment services, and they're especially ideal for beginners or someone short on time and who can't commit hours to researching investments. They work by asking questions about your financial situation and goals and then making investments accordingly. They're also inexpensive and don't require vast swathes of investing capital, making them suitable for mom-and-pop investors.
Related: The Best Robo Advisors.
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What is SigFig
SigFig Wealth Management is an SEC-registered investment advisor and a subsidiary of Nvest Inc. The company, co-founded in 2006 by Mike Sha, started as a portfolio tracker. It is currently in four countries — the U.S., Canada, India, and Singapore — with over 175 employees. The company is backed by revered financial institutions such as Morgan Stanley, Comerica, Santander, UBS, and Wells Fargo. According to Crunchbase, SigFig has raised $119.5 million in funding. The company has a mobile app for both Android and Apple devices.
SigFig has 40 pre-built portfolio options, but you can only invest in exchange-traded funds (ETFs) and real estate investment trusts (REITs). It offers individual, joint, and custodial accounts and traditional IRAs, Roth IRAs, and SEP IRAs. The company doesn't have cash management or savings accounts, so if a dividend has been paid out in your portfolio, it will remain as cash until automatic reinvestment occurs. SigFig also offers portfolio rebalancing.
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How does SigFig work?
Signing up is easy. You'll be asked questions about your financial situation, risk tolerance, financial goals, and investment experience. You can choose from five levels to indicate your risk tolerance or answer a few questions designed to pinpoint how you feel about risk. You can choose from three investment horizons — Short (less than five years), Intermediate (five to 10 years), and Long (over 10 years). You can't choose outside of these three options, however. After you've responded to the questionnaire, SigFig will recommend a portfolio consisting mainly of six to nine low-fee ETFs, bonds, and real estate.
You can dive deep into portfolio details, such as asset classes and the overall risk profile. Have questions? You can schedule a call with a human adviser. Once you're all set, you can grant SigFig access to your existing Charles Schwab or Fidelity account. If you don't have a brokerage account with any of these two firms, you can still use SigFig, and the app will open an account for you.
Related: Best Trading Platforms for Beginners
How much does SigFig cost?
SigFig is a low-cost robo-advisor, and it is commission-free. Managed accounts aren't charged any annual fee on the first $10,000 in your account. Once you top that, the management fee is 0.25% per year, which aligns with industry norms. You also don't have to worry about fees for terminating an IRA or transferring your account. These fees eat into your returns, and by removing them, SigFig made itself an attractive option for investors looking to maximize their returns.
SigFig features
Access to human advisors
Even in robo-investing, sometimes you just want to turn to a human for help. SigFig gives you unlimited access to human, financial advisors. At SigFig's competitors, this option is typically reserved for premium service users, but SigFig makes human, financial advice accessible to all of its users at no additional cost. In fact, you can talk to a human advisor even before you join the platform to help you clear up any questions and get clarification.
Brokerage account integration
If you have an existing account with Charles Schwab or Fidelity Investments, you can grant access to SigFig, which can then manage your balance without having to move money out of your existing account. In addition, giving access to SigFig may also be a savvy money decision because these brokerages' robo-advisors likely charge more than SigFig. And if you'd like to use SigFig as a robo-advisor but don't have a brokerage with any of these firms, you can just sign up, and SigFig will open an account for you.
Portfolio analysis tool
SigFig also offers a free investment portfolio analysis tool, which you can use without utilizing its robo-advisory services. This tool provides a holistic asset allocation review once you sync an external investment account. The tool can track portfolios, analyze holdings, conduct a fee analysis, and glean historical and projected returns and volatility. It also offers portfolio geographical diversification.
Related: 10 Best Stock Research Websites
Portfolio management options
Most robo-advisors offer fewer than 10 ETFs, but SigFig offers over 20. More options make it easier to build a portfolio that meets your needs and goals. SigFig also offers automatic rebalancing and tax-loss harvesting strategies. Rebalancing ensures your portfolio allocations don't drift from their initial target, and tax-loss harvesting is an investment strategy meant to reduce your capital gains tax from selling a profitable investment. This strategy isn't available in retirement accounts.
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- 30-Day Membership-Fee-Back Guarantee
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Who should or shouldn't use SigFig
As a low-cost robo-advisor, SigFig suits investors looking for options that don't dent the wallet. The fees it charges are very competitive, and SigFig delivers bang for your buck overall. It works best for users who already have an account with Charles Schwab or Fidelity because it can help you automate your existing investment accounts. If human advice is important to you, SigFig offers that at no additional cost.
Experienced investors or those looking for robust money management tools may find SigFig lacking in a few areas.
SigFig pros and cons
Pros
- Free and unlimited access to human advisers.
- Tax-loss harvesting strategies and automatic portfolio rebalancing.
- Competitive pricing.
- Free portfolio analysis tool.
Cons
- Account minimum of $2,000 is applicable.
- Lacks ESG investment options.
- No cash management account.
- Can't invest in fractional shares.
SigFig vs. its competitors
Robo-advisor | Account minimum | Management fee | Account types | Cash management account |
SigFig | $2,000 | Free for the first $10,000, 0.25% annually after that | Individual, joint, and custodial accounts; traditional IRAs, Roth IRAs, SEP IRAs | None |
Fidelity Go | $0 to open, $10 to invest | Up to $25,000 - free; more than $25,000 - 0.35% per year | Individual, joint taxable; Roth IRA, traditional IRA, rollover IRA, HSA | Yes |
Schwab Intelligent Portfolios | $5,000 for the basic plan, $25,000 for the premium tier | Free for the basic tier, $30 monthly if you're on the premium plan | Individual, custodial, and joint taxable; Roth, traditional, and rollover IRAs; trusts; SEP IRA and SIMPLE IRA | Yes |
Vanguard Digital Advisor | $3,000 | 0.20% per year | Individual taxable, Roth IRA, traditional IRA, rollover IRAs, and eligible 401-K plans | No |
Fidelity Go
Like SigFig, Fidelity is ideal for rookie investors who are cost conscious. Fidelity offers individual and joint taxable accounts, as well as Roth IRA, traditional IRA and rollover IRA, and health savings accounts. There's no account minimum, but you'll need a minimum investment of $10 in your account if you're looking to invest. You can put money toward nine Fidelity Flex funds across eight asset classes. Fidelity also offers a cash management account with no account fees, a debit card, and up to $1.3 million in FDIC insurance. And like SigFig, Fidelity also offers rebalancing, but a human does it, not any algorithm like SigFig. There are no management fees if your account has $25,000. Anything more than that, and you'll pay 0.35% annually.
Schwab Intelligent Portfolios
Schwab offers individual, custodial, and joint taxable accounts; Roth, traditional, and rollover IRAs; trusts; Simplified Employee Pension Plan IRA and SIMPLE IRA, targeted at small employers. The account minimum is high: $5,000 for the basic tier and $30,000 for the premium plan. The investing platform doesn't charge any management fee if you're on the basic plan, but if you switch to the premium tier, you'll have to shell out $30 per month. Schwab offers 50 ETFs across 20 asset classes and an FDIC-backed bank account. Several goal-setting and tracking tools are also at your disposal.
Vanguard Digital Advisor
At $3,000, Vanguard has a higher account minimum than SigFig, but it charges 0.20% of assets annually as a management fee, lower than what SigFig charges. Its portfolio comprises four Vanguard ETFs, and it offers an individual taxable account, Roth IRA, traditional IRA, rollover IRAs, and eligible 401-K plans. It doesn't provide a cash management account, however. You'll have access to a retirement planning calculator, a debt payoff tool, and screeners. Vanguard also offers a rebalancing service.
SigFig FAQs
What is SigFig's fund expense ratio?
It ranges between 0.07% to 0.15%.
How often can I reach out for human advice?
SigFig offers unlimited access to human financial advice at no additional cost.
Does SigFig offer fractional shares?
SigFig doesn't currently allow you buy fractional shares of an ETF.
The bottom line
SigFig is a low-cost robo-advisor suitable for beginners that offers diversified portfolio options. SigFig has priced its offerings very competitively; it charges low fees, and you don't have to worry about pesky account fees. This ensures you maximize your returns without worrying about fees potentially eating into them. Access to a human advisor is also a great option, especially considering it comes at no additional cost. Other robo-advisors typically restrict human advice to premium users. Overall, SigFig gets a lot of things right, even if it isn't as feature-rich as a few other services.
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Writer
Jasir Jawaid is Joy Wallet's Assistant Editor. He has more than 13 years of experience as a journalist covering Wall Street, equities, financial policy and regulation, and cryptocurrency and blockchain.
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