Archive for May 1st, 2012

Article from GigaOm.

SigFig, a product born from portfolio tracker Wikinvest, is finally launching formally Tuesday, offering to make understanding investments easy. The free service, which has been in beta, allows users to sync all their investments and monitor them in real-time from one dashboard with extensive analysis conducted in the background to help find where users can save money.

SigFig syncs with about 70 brokerages and is already tracking $30 billion in investments, carried over from Wikinvest. The service can show a user’s positions — both current and historical — and also figures out how much they’re paying in fees. There’s also a way to see asset allocation and forecasted dividends and risks. The service is still invite-only but GigaOM readers can get access by going here.

The heart of the service is the advice component, which is possible because SigFig is a registered investment advisor. The service can tell users how much they are paying for options trading and what they can save on trading fees by switching to another brokerage. SigFig can dig into the past results and risk ratings of funds and determining how it’s done  historically. And then it can recommend better performing exchange traded funds.

And for users who rely on someone to manage their funds, SigFig can tell if they’re getting their money’s worth. Some brokers steer their client’s investments toward products that pay the largest commission but is not always the best performing fund, said SigFig co-founder and president Parker Conrad.

“We can show you where your advisor falls with everyone else on the platform,” he said. “We can tell if your advisor is overcharging or underperforming. About 25 percent are in that quadrant and the more expensive guys are not always better.”

SigFig CEO and co-founder Mike Sha said the idea is to bring high quality advice and analytics to all investors, not just those that can afford the best service. He said SigFig can offer a more data-driven approach to investing that can go beyond the current abilities of human advisors.

SigFig makes its money, in some cases, by getting referral fees from brokerages. Some advisors also provide a percentage of their management fees to SigFig for sending them clients. But the company said it relies on the best data to make recommendations and referrals and isn’t guided by potential revenue.

SigFig, Simple and Personal Capital, another wealth management service that launched last year, are showing how technology can make finance more transparent and understandable for consumers. Finance is still largely a human-driven business that can lead to a lot of mistrust, especially when Wall Street puts profits over customer service. With next generation financial tools, there’s the hope of more data-driven, transparent services that offer potentially cheaper and more accessible financial advice.

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