Sigfig Review [2023]: Free financial advice rocks

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Sigfig Review

Table of Contents:

• What is Sigfig

• How does Sigfig Work

• Sigfig Pricing

• Pros

• Cons

• Alternatives to Sigfig

• How to set up a Sigfig Account

• Sigfig Feature Set

The world of finance has evolved over the years, and robo-advisors have become increasingly popular due to their cost-effective and efficient investment management services. One such platform that has made a mark in this space is SigFig. This comprehensive review aims to provide you with a thorough understanding of SigFig's features, performance, and customer experience, helping you decide if this platform is the right fit for your investment needs.

How does Sigfig Score:

Cost and Fees: 9 out of 10

Security: 8 out of 10

Ease of Use: 8 out of 10

Features and Tools: 9 out of 10

Overall: 9 out of 10

Pros and Cons of Sigfig

Advantages

• Low minimum investment requirement

• Competitive fee structure

• Seamless integration with other financial platforms

• Tax-loss harvesting and tax-efficient strategies

• Intuitive mobile app and website

• Responsive customer support

Drawbacks

• Limited account types compared to some competitors

• No direct indexing or fractional shares

• No option for socially responsible investing (SRI)

What We Like About Sigfig

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What is Sigfig?

Sigfig Logo

SigFig is a digital investment and financial wellness platform that aims to help investors and institutions make informed decisions about their investments. The platform was founded in 2006 and has since grown to become a leading investment platform with over $835 billion in assets under management.

The platform uses sophisticated algorithms to analyze your investment portfolio and suggest improvements based on your financial goals and risk tolerance. SigFig also offers a suite of investment services, including automated portfolio management, tax-efficient investing, and personalized financial planning.

They offer a fee-free account of up to $10,000 (with an account minimum of $2,000). In addition to their robo-advising and reasonable account requirements, they offer unlimited access to human financial advisors. You won't find that offer with any other robo-advising companies so this really is a key benefit that sets them apart from their competition.

SigFig Company Overview

A Brief History of SigFig

SigFig began its journey in 2007 as WikiInvest, a platform that allowed users to research and track investments. In 2011, the company pivoted and rebranded as SigFig, focusing on offering robo-advisor services to cater to the growing demand for automated investment management.

Founders and Leadership

The company was founded by Mike Sha and Parker Conrad, both experienced entrepreneurs with backgrounds in finance and technology. Under their leadership, SigFig has developed a reputation for providing accessible and sophisticated investment services.

Target Audience and Business Model

SigFig caters to a wide range of investors, from beginners to seasoned professionals. It provides investment management solutions tailored to the unique financial situations of side hustlers, freelancers, and small businesses. Whether you're juggling multiple income streams or navigating the challenges of self-employment, SigFig understands your needs and offers investment services designed to align with your goals.

In addition, SigFig is an ideal choice for high-net-worth individuals and accredited investors seeking sophisticated investment management services. The platform caters to the specific requirements of this discerning group, providing personalized advice and portfolio strategies that align with their financial objectives.

SigFig also recognizes the global nature of investing. It is accessible to international investors, allowing them to manage their investments through the platform. Whether you reside outside the United States or have an interest in diversifying your portfolio internationally, SigFig provides the necessary tools and resources to meet your investment needs.

By catering to side hustlers, freelancers, small businesses, high-net-worth individuals, accredited investors, and international investors, SigFig offers a comprehensive solution for a diverse range of clients, ensuring that each investor receives personalized attention and guidance.

Account Types and Features

SigFig understands the importance of planning for the future and offers specialized options for retirement planning and college savings accounts. Whether you're aiming for a comfortable retirement or saving for your child's education, SigFig provides the tools and resources to help you achieve your long-term financial goals.

For retirement planning, SigFig offers options such as Traditional IRAs, Roth IRAs, and SEP IRAs. These account types provide tax advantages and allow you to grow your savings over time, ensuring a secure and prosperous retirement.

If you're saving for college expenses, SigFig falls short. Sigfig does not offer college savings plans, so you will have to find an alternative. You can go directly to the NEST 529 site to set up a college savings account, work with a financial advisor, or find some alternative that works best for you!

By catering to retirement planning and college savings, SigFig demonstrates its commitment to helping investors navigate important life milestones and secure their financial future.

Supported Account Types

SigFig supports a variety of account types, including:

• Individual taxable accounts

• Joint taxable accounts

• Traditional IRAs

• Roth IRAs

• SEP IRAs

• Trust accounts

Minimum Investment Requirements

To get started with SigFig, you need a minimum investment of $2,000. This low entry point makes it accessible to many investors, particularly those starting their investment journey.

Portfolio Customization Options

SigFig offers several pre-built portfolios that cater to different risk tolerances and investment goals. You can choose from conservative, moderate, or aggressive portfolios, each designed with a mix of low-cost ETFs that provide a balance between stocks, bonds, and other asset classes.

Investment Strategy and Asset Allocation

SigFig follows a passive investment strategy based on Modern Portfolio Theory. The platform uses algorithms to determine an optimal asset allocation that maximizes returns for a given level of risk. SigFig primarily invests in low-cost ETFs that track various market indices.

Technology and Tools

Proprietary Algorithms

SigFig's strength lies in its proprietary algorithms that analyze your current portfolio and offer personalized recommendations to optimize asset allocation and reduce risk. These algorithms continuously monitor your investments and automatically rebalance your portfolio as needed.

Mobile App and Website Usability

SigFig offers an intuitive and user-friendly mobile app and website that provide easy access to your investments, performance tracking, and account management. You can also access a range of educational resources to help you make informed investment decisions.

Integration with Other Financial Platforms

SigFig seamlessly integrates with popular financial platforms like {Fidelity}, {TD Ameritrade}, and {Charles Schwab}. This allows you to manage and track all your investments in one place, making it easier to maintain a holistic view of your financial health.

Customer Support and Educational Resources

SigFig offers responsive customer support through phone, email, and live chat. The platform also provides a wealth of educational resources, including articles, videos, and tools that help you better understand investment concepts and make informed decisions.

Performance and Fees

Historical Performance

While past performance is not a guarantee of future results, SigFig's portfolios have generally demonstrated competitive returns when compared to industry benchmarks. This can be attributed to the platform's focus on low-cost ETFs and optimized asset allocation strategies.

Fee Structure

SigFig charges an annual management fee of 0.25% on account balances over $10,000. For the first $10,000, SigFig offers its services free of charge. This fee structure is competitive when compared to other popular robo-advisors, making SigFig an affordable option for investors.

Tax-Loss Harvesting and Tax-Efficient Strategies

SigFig offers tax-loss harvesting for its taxable accounts, which helps minimize the tax implications of your investments. By strategically selling assets at a loss to offset gains, tax-loss harvesting can help reduce your overall tax burden. SigFig also employs tax-efficient strategies to ensure optimal asset allocation in tax-advantaged accounts like IRAs.

Sigfig Pricing

Sigfig is awesome when it comes to cost structure. The first $10,000 you have invested with them is free of fees. After that, you pay a 0.25% fee for managing your portfolio. Compared to Betterment it is slightly better as they charge 0.40% after you have $100,000 invested. And Wealthfront which has the same fee structure.

Sigfig does have a minimum investment level at $2,000 so that is a bit of a downside if you are looking to just test the waters and find the right robo advisor for you.

Security and Privacy

Protecting User Information

SigFig takes the security of its users' information seriously. The platform employs bank-level security measures, including encryption and multi-factor authentication, to protect sensitive data.

Regulatory Compliance and Oversight

SigFig is registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA). This ensures that SigFig operates under strict regulatory oversight and adheres to industry best practices.

Customer Reviews and Testimonials

A thorough analysis of customer reviews from various sources reveals that SigFig has a generally positive reputation among users. Common themes in the feedback include:

• Ease of use and convenience

• Competitive fees and performance

• Responsive customer support

However, some users have expressed concerns about the limited account types and the lack of socially responsible investing options.

Sigfig Alternatives

Acorns

Acorns is an investment app aimed at helping people, particularly those who are new to investing, start their investing journey. It utilizes a "round-up" feature that automatically invests your spare change from linked debit or credit card purchases.

• Pros

  • Easy to start with small amounts of money

  • Automated investing makes it a hands-off experience

  • Features like "Found Money" which partners with brands to boost your investments

Cons

• Fees can be high for smaller accounts

• Limited investment options

Comparison to SigFig

While Acorns is ideal for beginners who want to passively invest, SigFig offers a more comprehensive platform, making it suitable for investors of all levels. Unlike Acorns, SigFig provides a wider array of investment options and lower fees, especially for larger portfolios.

Best Option

If you're a beginner who wants to start small and with ease, Acorns can be a good option. But if you have a substantial amount to invest and seek more options, SigFig might be a better choice.

Wealthfront

Wealthfront is a robo-advisor that provides an automated investing service, as well as additional features like tax-loss harvesting and financial planning tools.

• Pros

  • Automated portfolio management

  • Tax-efficient strategies such as tax-loss harvesting

  • Free financial planning tools

• Cons

  • No direct human advisors available

  • Higher fees for smaller accounts

Comparison to SigFig

Wealthfront offers tax-loss harvesting on all accounts, whereas SigFig only offers this on accounts over $10,000. While both platforms offer automated investment management, SigFig gives its users the option to also work with human advisors, a feature that Wealthfront lacks.

Best Option

If tax-loss harvesting and purely automated investment management are your priorities, then Wealthfront would be a good choice. For those who prefer a hybrid approach with human assistance and lower fees for smaller accounts, SigFig may be the better fit.

Betterment

Betterment is another robo-advisor that provides automated investment management and financial planning tools. It stands out for its goal-setting features, making it suitable for investors with specific financial goals.

• Pros

  • Goal-based investing

  • No account minimums

  • Tax-efficient investment strategies

• Cons

  • No direct investment option

  • Higher fees for premium services

Comparison to SigFig

Betterment offers goal-based investing, which may appeal to investors with specific financial objectives. However, SigFig offers a more customizable portfolio, allowing for investments outside the pre-set portfolios. In terms of fees, SigFig provides lower costs for accounts above $10,000 compared to Betterment's flat fee structure.

Best Option

For investors with specific financial goals and beginners who don't mind paying for premium advice, Betterment could be a good choice. On the other hand, SigFig might be more appropriate for investors who want more control over their portfolio and lower costs for larger investments.

How to get started with Sigfig

Setting up an account with most personal finance apps is getting really simple. Creating a user name, password, and linking accounts typically only takes a few clicks and Sigfig is no different. You can have an account set up in about 5 minutes if you have the $2,000 handy.

First, follow this link to open your account. This link will take you to their Home Page. In the top right-hand corner, you can click on the "Invest with Sigfig" button to get your account set up.

Sigfig Home Page

As with any personal finance app you are asked a bit about who you are and what goals you have. I always focus my investing for the long term. By the time I am near retirement age I shouldn't be setting up new investment accounts. Retirement age would be the only time I would choose to make short term investments, but I probably wouldn't use a robo advisor for that.

Sigfig Setup Page

As you can see, always invest for the long term!

Sigfig Long Term Investing

I love that they lay it all out there for you right away. You get a clear picture of what your portfolio is going to look like even before you provide them a single dollar. What's more, the offer up time to speak with an advisor before you get any further in the process. A clear sign that Sigfig wants you to feel comfortable that their tools will get the job done.

Sigfig Investment Plan

Setting up an account is as simple as creating a user name and password. Providing your email address assures you get up to date portfolio information in the future.

Sigfig Open Account Page

Now that you have set up the basics it is time to fork over your hard-earned dollars and let Sigfig put it to work for you!

Linking an account is super easy. You can transfer money from a checking or savings account or you can move money from another investment account. Sigfig has every integration you can think of so no matter where your money is, you can easily get it over to Sigfig and start investing with their team.

Sigfig Account Funding

If you want to skip the funding portion at this stage you certainly can. If you choose that option Sigfig immediately offers the opportunity to speak with one of their consultants. This makes sense, if someone isn't prepared to invest their money it might help them if they can speak with a consultant about Sigfig to ease their concerns.

Sigfig Personalized Plan

Once you are ready to commit Sigfig really wants to get to know you. They also want to make sure you and they are compliant with any and all regulations so they will ask about that here as well. The more they know about you the better decisions they can make regarding your portfolio.

Sigfig Deeper Demographics

After you have set up your account, invested your money, and had it allocated to various investment tools you can take a look at your dashboard and portfolio performance. For many, this dashboard will be a place we check our overall balance and nothing else. Others will want to know where and how their money is being invested. Sigfig provides all of that data and more within their super robust dashboard.

Sigfig Dashboard

Who can benefit from using Sigfig?

I would use Sigfig if my employer didn't offer a 401k, if I were self-employed, or if I had additional funds to invest and wanted a simple solution that was hands-off. Anyone can benefit from a robo advisor and what's more, people can benefit from free access to consultants as long as you make an appointment. I'll say it again, the free consultations Sigfig offers is a HUGE benefit that should be talked about more and really does set Sigfig apart from all the competition in this space.

Summary

SigFig offers a compelling option for investors seeking a cost-effective and user-friendly robo-advisor platform. With its competitive fees, low minimum investment, and a range of investment features, SigFig is well-suited for investors of various experience levels. However, it may not be ideal for those who prioritize socially responsible investing or require a more extensive selection of account types.