On February 10, 2021, Backend Benchmarking released the sixth edition of its “Robo Ranking” report. For the second time in a row, SigFig came in at the top out of a field of 21 firms. The Robo Ranking grades robo advisors over more than 45 metrics around such areas including features, performance, access to live advisors, costs, and account minimums.
According to the report, “SigFig remains atop the pile because of its record of strong performance, low fees, and access to advisors at lower asset levels than many other providers. SigFig tied Wells Fargo in terms of performance relative to the Normalized Benchmark, but stood alone in risk-adjusted performance measured by the Sharpe ratio. Performance is a large component of the overall score, and, thus, SigFig’s strong performance drove it to the top. Additionally, SigFig also has many attractive features and access to live advisors.”
“SigFig does have various tools and features available on its portal. One of the unique features is its ability to analyze outside accounts, flagging issues such as a lack of diversification and high fees. While other robos have aggregation tools, SigFig provides its users with these additional automated insights. It also has a retirement planner that allows users to adjust several factors and variables. The tool considers where a user will retire, their desired standard of living, and the risk profile of the user’s investments, among other options.”
Upon winning the award, Mike Sha, CEO of SigFig said, “This is a testament to the hard work of everyone at SigFig. While our market performance certainly was a large part of our success given the overweighting of returns by Backend Benchmarking, our efforts in keeping costs low, adding innovative features, and delighting our customers were all a factor in winning this award again. I couldn’t be more proud of this public recognition of the team and the effort they put in every day to deliver for our clients.”
On February 24, Financial Planning reported on the top 15 robo advisors according to this report. They highlighted not only the strong investment performances but also the growth in the industry, “Digital advisors increased their customer base 54% year-over-year to 71 million.”
In addition to winning Backend Benchmarking’s Best Overall Robo, SigFig picked up other awards including “Best Robo for Performance at a Low Cost.” This award “is based on the account’s Sharpe ratio and performance compared to the account’s Normalized Benchmark” over the three year period ending December 31, 2020. SigFig tied for first place with returns 0.23% above the Normalized Benchmark, and had a 0.59 Sharpe ratio (versus the group’s average of 0.48), meaning that SigFig not only had compelling returns but took an efficient level of risk to achieve those returns.
SigFig also led the field in 4-year and 5-year returns.
“SigFig, which maintained its 4-year top performer spots for total portfolio and equity performance, has also claimed the same prize over the 5-year trailing period. SigFig returned a healthy 10.41% annually overall and its equity returned 13.24% annually.”
This is the first year that 5-year returns have been included in the Robo Report, showing how far the industry has come since it was created around half a dozen years ago. With the inclusion of 5-year returns, plus the dramatic increase in assets managed by digital advisors, this individualized financial solution is clearly here to stay.