Sigfig Review: Free financial advice rocks
Updated: May 19, 2021
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Have you ever heard of Betterment? Or Wealthfront? Or Robo-Advising in general? If you said yes to any of those questions then read my Sigfig review to learn more about a very similar robo advising tool that is a bit lesser-known. You might find yourself wondering why you don't use Sigfig for your investing 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
What is Sigfig?
Sigfig is a personal finance software app and robo advisor that can help you manage your retirement assets.
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.
How does Sigfig work?
Sigfig works like most other robo advisors. They allow computer modeling to determine how to allocate your retirement account for growth and security. This is based upon inputs you control such as risk tolerance and timeline.
In addition, they utilize the Modern Portfolio Theory within their software. MPT can be summarized by saying each investment is considered for how they impact the entire portfolio. Other investment strategies focus on an individual stock/bond/etc and how that individual item performs in isolation, but MPT cares about the impact on the portfolio as a whole.
This methodology is neither good nor bad, but simply a guidepost for how decisions about your portfolio are going to be made by Sigfig's software.
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.
Super low fees
Unlimited access to consultants
$2,000 account minimum
Investment tools only (no cash management or other traditional banking offerings)
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.
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.
As you can see, always invest for the long term!
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.
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.
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.
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.
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.
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.
Portfolio Construction - this is a core feature that every investment management tool contains. Where Sigfig is different is the number of available options, I would call this somewhat limited. While that could be bad for some I find it to be very positive. They make the portfolio construction process quite simple with varying levels of risk and return clearly visible for you.
Portfolio Tracker - Sigfig Portfolio Tracker is "The easiest way to manage and improve your investments", according to Sigfig. Sigfig Portfolio Tracker is a Q&A tool to help you better understand Sigfig, your investments, and how to get the most from their software platform. The labeling might be somewhat confusing, as a tracker would typically mean a dashboard of some sort, but in this case, it is not that. They do offer a nice search bar that will provide you with all the answers you might need.
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 even 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.
Sigfig is a great robo advising tool that utilizes Modern Portfolio Theory to ensure your investments are as safe as you prefer and earning a rate you expect. Their fees are in line or better than their competition, but their minimum investment is a bit high. They definitely separate themselves from the heard by offering unlimited access to consultants.