Account Minimum: $2,000 – Fees: 0 – 0.25% – Best for: Wealth Building, Retirement
SigFig has a much smaller customer base than many of the other robo-advisors on the market, but they are worth reviewing due to their unique position.
TL;DR – SigFig is a run of the mill robo-advisor. They are shifting focus to working with banks to provide automated financial recommendation technology.
What is SigFig?
SigFig is an online investing application that lets investors set up a variety of long term investment accounts. Their mission is to make high-quality investment advice accessible and affordable to investors of all wealth levels.
They take immense pride in their ability to provide personalized financial strategies based on the goals you have.
The difference is human. With apps like Wealthfront you complete a brief survey and then start investing, no human contact required. With SigFig they make it easy for you to speak with a human advisor of you need to. This a rare for a financial tech company.
Who created SigFig?
Mike Sha is the CEO of SigFig. The company began in 2007 according to Crunchbase. Prior to SigFig Mike held positions at Amazon, and founded Wikinvest. Wikinvest has since merged with SigFig. He believes the need for a hybrid of AI and human advice will continue to rise, and he spends almost no money on marketing for SigFig.
Learn a little more about Mike’s vision for SigFig in this Reuters article.
Invest your money with SigFig.
A lot of robo-advisors try to make things overly simple to attract a new demographic of users. SigFig’s account overview and analytics are thorough.
You can easily see your account balance, schedule a session with a real financial advisor and have your external accounts managed all from within their mobile app.
Setting up an account is straightforward.
Step 1: Answer some questions: SigFig has an awesome questionnaire to help them better understand your investment goals. This allows them to make the best choice for you. Check it out here.
Step 2: Create and fund your account: At this point they will ask you to create a username, email and password before going into the app. Here you can fund your account via bank or investment account. Once you have chosen this you give a little more personal information and your account is created!
SigFig for Financial Advisors.
Consumers looking for a robo-advisor will focus mainly on the features offered for them. It’s important to know what else the company does. SigFig provides tools for customers, financial advisors and bankers.
What does this mean for users?
It has become more clear in the last year that customers for SigFig are not the top priority. They also provide a robust tool set for financial advisors. Both Wealthsimple and Swell do the same thing.
For a user, this means you may be overpaying for SigFig. A financial advisor could be providing these tools and up-charging you to manage a basic automated portfolio. You could be losing over 1% in fees annually.
What does this mean for Financial Advisors?
The product SigFig provides to financial advisors is awesome. With their platform you can easily manage multiple clients, manage alerts, annual reviews, control portfolio selection and pricing and other intelligent tools to help you achieve growth.
This also provides an awesome and easy to use online dashboard for your clients to review their investment at any time.
SigFig for Bankers.
SigFig built strategic partnerships with UBS, Wells Fargo and Citizens bank to provide intelligent customer engagement tools and product recommendations based on individual client portfolios.
Rather than needing a person to give you banking advice, SigFig provides banks with the tools to automatically do that.
4 reasons we love SigFig.
- Financial Advisors are Available – Most robo-advisors place a strong focus on getting all of your answers from a machine instead of a human. SigFig has financial advisors standing by if you have questions about your portfolio or you are looking for advice. This is completely free once your account passes the $10,000 balance.
- Free Portfolio Tracker – One of SigFig’s best feature is their free portfolio tracker. They will let you sync and monitor any 401(k), IRA or brokerage account and offer you free advice on the investments. This advice should always be taken with a grain of salt.
- Standard Fees – The standard robo-advisor fee is now around 0.25 – 0.40%. SigFig holds up at a low 0.25% which is comparable to other similar platforms currently available. This plus the free tracker and financial advisors makes for a pretty sweet program all together.
- Investment Diversification – Most individual investment accounts focus on an allocation of stocks and bonds. With SigFig you can further diversify your portfolio by adding real estate investments to your portfolio.
Less than $10,000 – Free Minimum balance oof $2,000 required.
Over $10,000 – 0.25% Free access to an investment advisor.
The pricing for SigFig’s product is transparent. It’s a simple flat fee after you have $10,000 saved up. This is in line with other companies in the industry, but the features are more limited for the same price.
The only other fees would be the management fees the underlying funds charge you. Other apps do this as well.
Where SigFig could improve.
- High Account Minimum – The fee is in line with other companies like Betterment, but SigFig requires a hefty $2,000 deposit to start your account. For many of us this is not an option.
- Limited Advising Platforms – Your fund has to be coming from a TD Ameritrade, Fidelity or Schwab account. If you are using a different brokerage you will have to switch, even though some other companies have lower commissions.
A note about SigFig’s business model.
If you are just getting started with robo-advisors, beware of SigFig. 10 months ago they received $50 million in funding. An article by TechCrunch mentions SigFigs plans for the future.
Rather than target the consumer, they want to sell their advice technology directly to banks. They describe SigFig’s robo-advisor as a, “small direct to consumer business, which the company uses to test new products and services before bringing them to their main, business, customers.”
This is a huge issue for people who are planning to save long term. You are a guinea pig before a product is used by big banks.
SigFig Review: The Bottom Line
SigFig was once an up and coming robo-advisor. Recently they have pivoted towards more B2B solutions, leaving many loyal customers in the dark.
If you are an organization or investor, SigFig is a company to watch. They are well positioned to tightly partner with more banks and other financial institutions as they roll out their automated advice platform.