|The Journey of a SigFig Recommendation|
|We Diagnose Your Portfolio||We Gauge Your Situation||We Send You Advice|
|Every week, we run 100+ tests on
your investments to find ways for
you to save and make more.
|Next, we personalize and tailor
your advice to your unique
|Finally, we deliver clear,
actionable investment advice
right to your virtual doorstep.
Common Questions & Disclosures
Are there general disclosures I should be aware of?
- No guarantee or representation is made that our investment advice will be 100% successful. Our advice relies on historical data, and past performance is never a guarantee of future returns.
- Our advice relies on data provided by your brokerage, which may be incomplete, inaccurate, or misinterpreted. Your advice is based upon your existing investment portfolio and transaction history. Consider your individual circumstances, risk tolerance and needs prior to following our advice.
- Certain transactions give rise to substantial risk and are not suitable for all investors. You should not enter into any transaction unless you fully understand the risks and have independently determined that such transactions are appropriate for your needs.
- Our advice is generated via automated software. We test this software extensively and repeatedly to ensure its accuracy. However, undetected bugs may exist in the software (or be introduced unintentionally in the future) that result in flawed advice.
- Our advice is based only on the accounts you have synced with us.
- If your account sync stops working, we base your advice on the last available data we have for you, which may be out of date. For up to date advice, ensure your brokerage accounts are syncing correctly.
- Brokerage savings estimates are specific to the listed fee types and do not account for other kinds of fees.
- We do not consider the tax implications of our advice. Please consult your tax advisor.
Is your advice biased since it’s tied to revenue?
Our advice is driven by data, not opinion. It makes no difference to our algorithms who your advisor or broker is. Among dozens of other data points, we rank your advice in order of savings, earnings, and severity - all of which are decided by computers with no skin in the game.
How do you come up with my mutual fund/ETF advice?
Everyday people don’t have the technology needed to quickly sift through more than 20,000 funds to find the diamonds in the rough. That’s where we come in. SigFig looks at the funds you currently own, crunches the numbers, and recommends less expensive, better performing funds. It’s a pretty sweet deal. We do all the work; you rake in all the savings.
Here’s how our fund analysis works:
- We make an apples to apples comparison: We only compare your fund to other funds in its category. In addition, we only compare your fund to funds with the same share class.
- We then analyze:
- 3- year historical risk adjusted returns of your fund vs. all other funds in its category
- Fees (including ongoing and one-time load fees) of your fund vs. all other funds in its category
- Sharpe ratio of your fund vs all other funds in its category.
- Similarity in holdings between your fund an all other funds in its category
- Third-party ratings from sources such as Lipper.
- Trading costs associated with switching holdings.
Can you give me the technical details behind your mutual fund/ETF advice?
- We only recommend funds within the same category of funds you own: For example, if you own an emerging markets mutual fund, we might recommend a different emerging markets mutual fund, but would not recommend an S&P 500 fund instead. We currently don’t assess if it’s appropriate for you to own a fund or ETF in this category, or whether your holdings in this category are larger or smaller than they should be, given your risk tolerance. We simply suggest an alternative if the data shows there is a better solution based on your existing holdings.
- We calculate missed earnings as the difference in cumulative performance of our best recommendation versus your current fund over the last 3 years. We assume a 3 year holding period regardless of how long you’ve held your current mutual fund. Three years may not be long enough to evaluate a fund in a variety of different market conditions. Conversely, this timeframe may be too long to accurately evaluate recent changes to the fund's strategy or management.
- We will only give you a recommendation if the historical 1yr performance difference between your fund and the one we recommend is at least $100, based on the number of shares you own of your current fund.
- We sometimes recommend a fund that charges a "load" fee — a one-time payment to the company that operates the fund. Load fees may be charged up-front, at the time you purchase the fund, or on the "back end" — when the fund is sold. Sometimes, back-end load fees are waived if the fund is held for enough time. Load-fee funds may occasionally have lower ongoing fees or may have historically outperformed their no-load peers.
- We will only recommend funds with load fees if the fund has historically higher performance than your current fund and the historical performance gap is large enough that you would have earned back the load fee in less than one year. However, historical performance is no guarantee of future returns, and the performance gap may not persist going forward.
- Whenever we recommend a fund that charges a load, we warn you that the fund charges a load and show you cost of the load fee, the type (front-end vs. back-end), and period in which you need to hold it to earn back the fee.
- Our data on load fees comes from Lipper, Inc. and we are only as accurate as this data source.
- We do not recommend leveraged ETFs & Funds.
- Our securities recommendations are based on three years of historical fundamentals & price data. This timeframe may not be long enough to evaluate a fund in a variety of different market conditions. Conversely, this timeframe may be too long to accurately evaluate recent changes to the fund's strategy or management.
How do you come up with my brokerage firm advice?
As soon as you sync your brokerage account(s) with SigFig, we simulate your trading patterns across dozens of the largest brokerage firms to expose hidden charges, avoidable fees, and more. In a nutshell: we give you complete visibility into the institutions managing your money.
Here’s how our brokerage analysis works:
- First, we simulate your historical transactions against dozens of other brokerages. This is based upon 12 months of your historical brokerage transactions.
- We then analyze:
- Assets you can trade for free (or for less) at other brokerages on our system
- Ways for you to save by switching brokerages (ex: lower trading fees)
- Ways for you to save without switching brokerages (ex: avoiding transfer fee)
Can you give me the technical details behind your brokerage firm advice?
- We find savings for you by simulating your fees across dozens of other brokerages. This simulation relies on data we collect on the way in which each individual broker charges their client’s fees and commissions. We can only simulate fees based on the brokerage's stated rules as to what they charge and when. We do update these rules once a quarter, but may not pick up updates to a brokerage's fee schedule right away when changes occur. We only present recommendations for brokerages with whom we have relationship with.
- Brokerage advice is based upon 12 months of data. When we have less than 12 months of history for your account, we may base your advice on 3 months of history. Because our advice is based on your historical behavior, if your behavior were to change dramatically, it could impact the validity of one (or all) of your brokerage advice. For example, based on your historical data showing you placed 30 stock trades in the last 12 months, we might find a way for you to save more money by switching to a less expensive brokerage. If you were to then place 6 trades that following year, our estimates of your savings could be inaccurate.
- Our brokerage recommendations are independent of each other. For example, we show you that you can save on one type of fee, but it's possible you might pay more for a different kind of fee. Our rationale for not combining everything together is that many of the things that lead to fees at your brokerage can be separated from one another.
How do you come up with my advisor advice?
To date, individual investors have had no way of knowing whether their advisor was underperforming or overcharging. In fact, the advisors themselves have had no way of benchmarking themselves against other advisors! For the first time ever, SigFig will give investors a way to hold the people and institutions managing their money accountable.
Here’s how our advisor analysis works:
- First, we mark accounts as "managed" by identifying management fees within those accounts.
- Next, we make apples to apples comparisons: We only compare you and your advisor to other users with advisors who appear to have similar investment strategies based on their asset allocation.
- We then analyze:
- Fees: Advisor fees you’ve been charged divided by your average daily account balance.
- Performance: Historical returns of accounts your advisor manages (based on available historical data).
- Peers: We compare your advisors performance/fees to the performance/fees of other investors with advisors on our platform.
If you request a free portfolio review, we recommend an advisor based upon:
- High quality network: We’ve painstakingly built one of the best online advisor networks. You can see what goes into our advisor network by clicking here.
- Proximity: The advisor's proximity to your zip code (if you select this option).
- Holdings overlap: The overlap between your investment goals and the advisor's competencies.
- Special features: Any special features you have requested (such as socially responsible investing).
- Asset minimums: The minimum asset levels required to invest with the advisor.
Can you give me the technical details behind your advisor recommendations?
- We only recommend advisors on our platform. While we’re confident in the quality of our advisor network, we still recommend comparing advisors within our network to advisors outside our network.
- If you currently have an advisor, we evaluate your advisor's historical performance and fees. While fees and performance are important criteria for deciding whether to stay with your advisor, they are not the only meaningful criteria. And, your advisor's historical performance is no guarantee of future returns.
- We assume your advisor manages all your accounts at any brokerage where management fees are found in one of your accounts, but is not managing accounts at brokerages where we do not detect management fees. If this assumption is invalid for your accounts, we will evaluate your advisor's performance on an incorrect or incomplete set of accounts
- In simulating your fees at other brokerages, we look at data over the last 12 months. In limited situations where we have less than 12 months of history for your account, we may base our recommendations on 3 months of history.
- How do we calculate your advisors performance?
- Performance figures calculated by SigFig are net of fees and include dividends and other earnings.
- We calculate your advisor's performance over two years. This timeframe may not be long enough to evaluate an advisor in a variety of different market conditions. Conversely, this timeframe may be too long to accurately evaluate recent changes to the advisor's strategy.
- If you have recently switched advisors (within the last two years) our algorithms cannot detect the switch, and will incorrectly attribute the last two year's performance and fees to your current advisor.
- Full details of your current advisors fees can be found in your advisor's public disclosure brochure.
- How do we calculate your advisors management fees?
- Because advisor fees are usually charged as a percent of assets, we divide these fees by your account balance to calculate a percentage fee (e.g., 1.2%).
- How do we calculate your peer comparison?
- Peer groups are categorized by:
- 0% - 45% equities
- 45% - 60% equities
- 60% - 75% equities
- 75% - 85% equities
- 85% - 100% equities
- We compare your advisors performance and management fees to other investors on SigFig who have advisors. If your advisor is in the bottom half of performance, the top half of fees, or both, we suggest a free portfolio consultation with an independent advisor.
- We only compare your advisor to a subset of other advisors whose clients have a similar portion of their assets invested in equities as you do. We believe the portion of a portfolio invested in equities is a rough indicator of a user's investment goals and risk tolerance, and therefore comparisons within a group of users with similar allocation is a more valid comparison than a comparison to all users. We do not consider your allocation to asset classes other than equities.
- The data on performance and fees for your advisor's peers comes from the data we have collected from other users of our service. As a result, the validity of our comparison depends both on us correctly calculating your advisors' performance and fees, but also the fees and performance of other users on our platform.
- Peer groups are categorized by:
- We encourage you to do your own research into any recommended advisor, including, but not limited to consulting with independent tax, legal or financial advisors as necessary.
Do you rely on any third-party data?
- Portions of our advice rely on third-party market data from companies like Lipper, Thomson-Reuters, Interactive Data, and Xignite. While rare, inaccuracies in this data can result in us misclassifying, failing to identify, or inaccurately calculating your performance and management fees.
- Mutual fund and ETF data is updated monthly. As a result, our assessment of these products may be based on data that’s over a month old. Not to worry though – advice is based upon long term historical data and not one month snapshots.
- In some cases we override the data provided by our data sources to improve the accuracy of our data. We re-evaluate these overrides once a year.
Who can I speak to if I have more questions about your advice?