SigFig is an amazing investment tool. It’s a free tool that links to your current online investment brokerage and provides easy-to-read charts of your status and performance. I’ve used TDAmeritrade as my brokerage for nearly a decade now, and it doesn’t come anywhere close to displaying my portfolio as well as SigFig’s website.
You should definitely try their free service if you haven’t done so yet.
I was pretty happy with their free service, so I decided to test their paid ($10/mo) managed account, which basically automatically reallocates your investments into zero-commission (FREE) ETFs. Most of the ETFs are well-known, low-fee ETFs offered by Vanguard, so they’re good picks.
These managed accounts are for investors who don’t want to individually pick their stocks. The only setting the owner can modify is a slider that selects whether the owner wants a conservative or aggressive investment allocation. If the investments deviate from target allocation, SigFig will automatically rebalance the account to match the target.
At the most aggressive allocation, my portfolio was set to:
- 34% US Equities (VTI)
- 25% International Equities (VEA)
- 25% Emerging Markets (VWO)
- 10% – US Bonds (AGG)
- 6% Real Estate (VNQ)
- 0% Cash
At the most conservative allocation, my portfolio was set to:
- 34% – US Bonds (AGG)
- 33% – Short Term Treasury Bonds (VGSH?)
- 13% US Equities (VTI)
- 7% International Equities (VEA)
- 7% Emerging Markets (VWO)
- 6% Real Estate (VNQ)
- 0% Cash
When I signed up, it took me two weeks to transfer my TDAmeritrade account control over to SigFig’s control. While control was handed over, the account still remained on TD Ameritrade’s side, though on their TDA Advisor Client website instead of their individual investor website.
We ran into several issues during the transfer that delayed the process over a week. I needed to sign some TDA waiver forms on paper and email them to SigFig. Fortunately, SigFig support was excellent and pretty much hand-held me the entire way.
Once the account transfer completed, within 2 trading days, my existing investments were liquidated (That did cost me regular commission fees to TDA), and the new SigFig investments were purchased (no commission fees)
Overall, I’m pretty happy with SigFig’s managed accounts. If I weren’t the type of person who enjoys with my investment choices, I’d probably stick with it. It’s something I’d definitely recommend to my mom because she’s proven she’s unable to make investment decisions.
$10/mo is a very small fee for anyone who has a $25K+ account. People are known to make stupid choices jumping in and out of the market. While managed 401K accounts typically grow an average of 5-10%/yr (even after commission fees), individual investors on average only make 2% because they try to time the market, and do so very poorly. Having a managed account prevents jumping in at the wrong time or pulling out too soon.
- Zero-commission ETFs
- It’s a managed account. You put money in and don’t think about it. It’s worry free!
- Greatly out-performs the average individual investor
- First 6-months months are free. Afterwards, it’s just $10/mo, which is a bargain price. I don’t think any other managed accounts are anywhere near this cheap.
- Both the Web interface and charts are gorgeous
- It’s not for everyone. If you like playing with stocks and gambling, you’ll probably want to manage your own account. With this managed account, you can’t pick your own stocks.
- The most aggressive allocation closely matches aggressive allocations for mutual funds, but it might still be too conservative for some.
- All of SigFig’s tools are already provided freely. You don’t need to pay for the managed account to get them
- Theoretically, you could just mirror SigFig’s investment choices and manually reallocate your stocks. But that introduces the human emotion factor and isn’t worth trying to save $10/mo.
For a complete FAQ, check https://www.sigfig.com/site/#/faq