LAST UPDATED: June 27th, 2019
SigFig, which is short for significant figures (a financial term related to precision), was founded in 2006 and originally began as Wikinvest. SigFig is an online portfolio manager that uses patent-pending algorithms to assess your holdings according to diversification, performance, and cost. Then it assesses the potential gains you could potentially make by trading. SigFig has been recognized in Forbes, NPR, Bloomberg, Barron's, USA Today, CBS News, The Wall Street Journal, Fortune, Money, VentureBeat, and Time. They also have award-winning apps on Google Play and the Apple App Store.
- Free portfolio tracking feature
- Personalized portfolio guidance
- SigFig's pricing
SigFig was designed to help you maximize your returns and minimize fees. They will help you create an investment plan, optimize your portfolio and keep you on track through the ever-changing market conditions. SigFig believes that better investment planning will give you better results and that their clients have seen returns as high as 4.0% above the average investor. But, just as with anything else, there is a legal disclosure attached to that statement. SigFig strives to make everything as convenient as possible while making your goals their priority. They have everything setup so you can work with your preferred brokerage, while they monitor, rebalance and reinvest your assets based on the analyzed information provided and depending on your account size, their experienced advisors are just a phone call away. Other benefits include:
SigFig will help you build a well-diversified tax-efficient portfolio. They use intelligent algorithm's that are tailored to your specific needs and risk level. And the algorithm is backed up by an investment research team. SigFig gives you the best of both worlds, meaning you have the advantage of smart automation and when you add human expertise that means you get the speed and consistency of intelligent algorithmic trading with the addition of personalized care and all the experience of their investment advisors, which you will have access to via phone or live chat.
SigFig will perform an in-depth analysis of your portfolio using their SigFig scores, this will analyze your risks, fees, Sharpe ratio, asset class, any third-party ratings and the trading costs. The analytics are based on the three-year historical risk-adjusted returns for each of your funds. It will then let you know how much of each funds' performance could possibly fluctuate. Then it will recommend a particular low-fee, high-yield fund that matches your risk tolerance. You will love this bird's eye view of the performance of your entire portfolio and the fact that you can leave your assets at your existing brokerage.
SigFig allows you to securely connect with over 80 brokerages, including TD Ameritrade, Charles Schwab, ETrade, Vanguard, Scottrade, Merrill Lynch and more. Additionally, they use the same 256-bit SSL encryption that the same level banks and brokerages use to help keep your financial information safe. You will also love the fact that connecting your other brokerage accounts to SigFig is extremely easy. You just enter your login details for each of your brokerage accounts and the SigFig system will instantly and automatically connect them without hours of waiting time or any other time laden inconveniences.
Free Portfolio Tracking Feature
SigFig offers portfolio tracking and personalized advice for free. You can see all your investments in one place with the portfolio tracker. They can also sync your 401(k), IRA brokerage and advisor accounts from a wide variety of brokerages. Then the system will automatically compile all your investments onto a single dashboard. You will receive weekly summary reports of your performance, the events that impacted your portfolio and alerts about the top gainers and losers. The SigFig portfolio tracker can also analyze your portfolio to help you discover any hidden fees, any stocks or industries that are overexposed and highlight your risk ratio whether it be too risky or not risky enough. You will also be able to follow the markets in real-time for stock market quotes, news and an ongoing commentary via more than 500 resources. The SigFig program will also provide you with user-friendly charts and tools that will crunch all the numbers for you from many different market indexes and compared to how your particular portfolio compares to those of your peers.
Personalized Portfolio Guidance
SigFig's personalized portfolio guidance program offers a free, in-depth analysis of your personal portfolio and your investment strategy. It measures volatility to see if it matches your risks, your stock/bond split to see if you have the right mix of stocks and bonds, expensive funds to highlight the biggest offenders in your portfolio, geographic diversification to make sure your investments are correctly spread across domestic, foreign and any emerging markets, cash drag to identify any areas where you could be putting cash into the market and single stock concentration to ensure you aren't putting all your eggs into one basket.
With SigFig, their portfolio analysis is free, but they charge $120 per year to automatically manage your accounts, which is more affordable than hiring a financial advisor. The first $10,000 is managed for free and has a $2,000 minimum balance requirement. With anything over $10,000, the first $10,000 is still free, but the remaining balance would be a 0.25% annual fee and you get the use of an investment advisor.
- Management of financial accounts
- Basing decisions on historical information
The SigFig system is based on three years of your historical data. However, this is not always the best information to base your decisions on. What that means is that SigFig bases its advice on chasing returns and past performance. And considering the fact that you can't compare mutual funds and ETFs as an apples to apples comparison and the fact that past performance does not always guarantee results, the SigFig recommendation might not always be the right advice, depending on your particular financial goals. Therefore, care must be taken to look at all the data and weigh each fact, before taking any advice as to what's right for your particular financial situation.
Management of Financial Accounts
Unfortunately, with SigFig you can only import your investment accounts from brokerage firms, which prevents you from keeping all your financials in one place. For example, you can't manage your bank accounts, credit cards or other types of financial accounts when using the SigFig system.
Basing Decisions On Historical Information
The SigFig system is based on three years of your historical data. And while historical information is great, it's not always a good idea to accept that information as fact, as far as what's best for you and your particular future financial goals. Meaning that the SigFig system bases all its advice on chasing returns and past performance. And chasing the returns of mutual funds and ETFs, which can't be an apples to apples comparison anyway, should not be the basis of your entire investment strategy. Because not only should the two not be compared equally, but there is the fact that past performance does not always guarantee future results. So while the SigFig system is great in so many ways, you really need to break all the information down, the mutual funds and the ETFs, then assess the data according to your future financial goals to see if their recommendations fit with what you are trying to do. Additionally, you also need to take note of the SigFig disclaimer that states that they do not consider the tax implications of their recommendations. So, they are basically telling you to make decisions after taking all their advice, applying the facts and weighing it against your particular investment goals.
The Bottom Line
SigFig is a great aggregator service, as is their comparative data, daily updates and the way they breakdown fees so you can see your entire portfolio and stay well-informed about your accounts. And the website navigation and the fact that they make it so easy to connect all your accounts is great. Therefore, we have no problem recommending them as a good free aggregator service; however, you should take care when using any of their advice as fact, especially when it comes to comparing mutual funds and ETF's as they can't be compared equally. You should also realize that chasing returns is not usually the best way to make decisions about your investments. So knowing that we urge you to take the time to weigh all the facts as they pertain to your particular situation before jumping on any of their advice.
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