Overview of SigFig vs Betterment (Review, Alternatives & Competitors)

In this modern age, we are all learning to juggle responsibilities. We go to school, we work, we raise families — sometimes all simultaneously. Life is busy. To help simplify things, we have started automating parts of our lives.

Lately, this has included allowing technology to handle our investment decisions, which is where robo advisors come in.

What Are Robo Advisors?

Robo advisors are virtual financial planners. After entering your information into a website or app, robo advisors are programed to analyze your specific needs and goals. They can build financial portfolios for their clients and can monitor the exchange of funds.

Two major robo advising companies are called SigFig and Betterment. SigFig vs Betterment has been a widely discussed (and debated) topic. Is one better than the other? If so, why? SigFig vs Betterment cannot be decided without some research and background into the use of robo advisors.

Who Uses Robo Advisors?

Robo advisors are used by a variety of individuals and businesses. Virtual advisors are aimed at younger people (millenials), because they tend to be more technologically savvy.

Traditional financial advisors that are SigFig competitors and Betterment competitors find that the problem with millenials is that they haven’t had a chance to compile a nest egg yet, so they do not have much money available for investing.

Robo advising is thus more compatible with younger generations. The start-up costs of virtual financial planners tend to be much lower than those of traditional investors. This provides a more affordable alternative for investing that anyone can partake in.

Overall, people enjoy using these two platforms. Betterment vs SigFig has risen to greater prominence. In terms of technology, Betterment vs SigFig are equals. Both services are available on Android, iOS App, and on the mobile site.

sigfig vs betterment

Image Source: Pixabay

See Also: Top Robo-Advisors (Reviews) | A Changing Trend in the Robo-Investment Field

Why Are Robo Advisors Used?

Some of the Betterment competitors and SigFig competitors who are still utilizing the traditional method of investing are running into many disadvantages. Robo advisors provide customers with the latest technology and programs designed to maximize their investments. They also offer optional face-to-face interaction.

In addition to the multitude of conveniences, robo advisors charge approximately half the cost that traditional advisors charge. Brokerages, which are both Betterment’s competitors and SigFig’s competitors, manage investments and typically earn about 1% of the assets that they are managing. Where a human might choose based on commission, robo advisors have no bias any which way.

Both services have a unique set of pros and cons, and a person’s individual needs play a big part in which online service they use. Aside from asking about SigFig vs Betterment, they must consider what specifically they are looking for.

Choosing a financial advising company takes into account multiple factors. Before the client asks, “Is Betterment worth it?” they must examine the mission of each company and determine which one matches their goals.

Related: Betterment vs. Wealthfront vs. Vanguard – Ranking & Review

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SigFig was designed by the founders of Wikinvest, which is a portfolio tracking system. SigFig is an alternative to Wikinvest, as it has been upgraded to offer three different services to members. When you sign up, you will have access to:

  • Asset management
  • Diversified income
  • Tracking your portfolio

As there is little human interaction when you invest with SigFig, it may be a good option if you do not have much time for back and forth communication. However, human advisors are still available if desired. Everything is automated according to complex algorithms, which are designed to make the most out of your money. Seeing as traditional SigFig alternatives are human advisors, it may take extra time to make an appointment.  

To analyze your portfolio, SigFig is an alternative which allows you to connect your existing brokerage accounts and information to the web or app. SigFig uses encryption security to ensure the protection of your information. There is also an option to manually input your investment information into SigFig.

By imputing your brokerage information into SigFig, your account can be amassed for easier viewing and analyzing. With respect to SigFig vs Betterment, these processes are very similar. SigFig is an alternative for long-term investment advice, as they make recommendations for what their clients should be doing currently. They have a multitude of suggestions to optimize their clients’ accounts.

With an account, you can see your own portfolio of assets and investment returns. Then this will be compared to what SigFig determines your ideal portfolio should resemble. This is based on how much risk you are comfortable taking with your finances and investments. The fact that SigFig compares actual portfolios to optimal ones sets SigFig a little ahead in the competition of SigFig vs Betterment, as Betterment does not provide this service.

SigFig competitors might also have trouble when it comes to price matching. SigFig has a minimum investment of $2,000 and the cost varies:

With reference to SigFig vs Betterment fees, they are quite similar. However, SigFig would win the SigFig vs Betterment debate in regard to offering clients free manual portfolio tracking, (there is a $10 charge per month if you want automatic management). You will be informed about any hidden fees that have been discovered, your risk management plan, and market trends. It will also be easy to see how you are comparing to others.

Security is a common obstacle that potential clients are wary about. Everyone wants to be assured that their money is safe and well looked after. SigFig uses a level of encryption to protect their data that is identical to what banks use. Information is so secure that not even employees of SigFig have access to your brokerage information.

Although SigFig and Betterment are well-known robo advisors, they are not the only options available. An example of a SigFig alternative could be Personal Capital Money and Investing. However, this system may not appeal to everyone, as Personal Capital does not have some of the same features. This SigFig competitor does not provide clients with live data streaming. This can be frustrating for people who want to see quick results.

SigFig alternatives all have their own strategy to determine what their clients want and need. In most cases, the clients of SigFig competitors are where they are for a specific reason, and the same can be said for SigFig clients.

betterment vs sigfig

Image Source: BigStock

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Betterment is the first robo advisor to bring the assets they manage to an amount exceeding $5 billion. In this instance of SigFig vs Betterment, the latter has pulled ahead. Betterment is a company that entices investors by focusing on their specific goals. The robo advisors on the site continually buy and sell assets in an attempt to reach the optimal appropriation of assets for the client.

Concerning the efficiency of money management with Betterment vs SigFig, Betterment achieves this by examining market trends, important milestones, and recent tax updates. If the client wishes, they can set up their profile to ensure that Betterment automatically takes resources from their bank accounts when money-saving opportunities arise.

The field of investing can often be seen as tedious and confusing to the untrained eye. This is particularly the case when a person has had no experience with finance or investing. To stay ahead of Betterment’s competitors, the system’s creators sought to understand this and have made the site as effortless as possible.

Setting up a profile takes a matter of minutes, and there is no cost to do so. (In terms of Betterment vs SigFig, in this case, both systems are easy to use and understand). The instructions are simple and straightforward. Once you have moved past this stage, you will be able to allocate your funds and put them toward different goals.  

If you’re looking for the answer to Betterment vs SigFig in regards to fees, it depends how much money you’re interested in investing. Investing with Betterment will cost you:

  • 0 to $10,000 will be 0.35% annually (minimum deposit of $100/month. If you do not want the automatic deposit, it will cost $3/month)
  • $10,000 to $100,000 will be 0.25% annually
  • +$100,000 will be 0.15% annually

Seeing as the fees decrease as the investment amount increases, Betterment is worth it when it comes to staying with the company for the long run. Betterment is also worth staying with because they do not charge transaction fees for buying or selling securities, depositing or withdrawing money, or rebalancing portfolios.

When a portfolio is rebalanced, this means that assets are being bought low and sold high. As the years pass, your overall returns will grow. Betterment also sells index fund shares when it will make a profit and selling funds that have decreased in value. This is known as “tax loss harvesting.” In regard to Betterment vs SigFig, this is something that both companies do.

Both companies will try to make you money. Specifically, Betterment will attempt to increase money by investing it in value and growth stocks, as well as exchange traded funds (ETFs). The fee for investing in ETFs is typically 0.05% annually.

Although management fees for Betterment are fairly low, the real question remains: is Betterment worth it? Some potential clients may be wondering: how do I know that my money is secure with Betterment?

To answer this, the service provides reliable security for clients’ money. As per the Securities Investor Protection Corporation (SIPC), Betterment guarantees that they will work to reclaim savings up to $500,000, and that it will be protected in the case of fraud or failures on their part. There is little difference in Betterment vs SigFig security, as both systems are well protected.

Betterment is worth it to invest in compared to Betterment’s competitors for several reasons. First, they do not require any minimum investment, which is helpful for clients who do not have a great deal of savings yet. Betterment also provides their clients with individual goal settings, so that everyone is on the same page regarding expectations.

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Wrapping Up

Choosing where to leave your money is difficult. It may be one of the most difficult decisions you ever have to make. After all, you want to make sure that your hard-earned money is used in the best way that it can be. SigFig vs Betterment may not even be a fair question, seeing as the title for “best” company depends on an individual’s preference.

Although Betterment vs SigFig is a competition, they are both robo advisors that are simplistic and easy to understand. They can handle all the tricky decisions and questions that you may not have knowledge about. This makes them a good choice for people who do not have much experience in the industry, or who are just starting out in the field of investing. 

In the end, you must be comfortable with the decisions being made. Do you want to manage all of your financial decisions and be in charge of everything? If so, perhaps robo advisors aren’t for you. However, if you don’t mind a bit of help, robo advising companies may be a beneficial option for you, allowing you to automate your investing and free your mind to tackle other things.

Read More: Betterment Review – Returns, Fees, and All You Need to Know

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