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Despite being only slightly over a decade old, robo-advisors are increasing in popularity quite rapidly around the world. Some of the best robo-advisors in Canada are among the most popular robo-advisors available.
Since Investments are generally difficult to track and compare, financial advisors have dedicated their lives to mastering the art of picking stocks with success rates that don’t outperform random chance. However, with the increasing availability of wealth management platforms, such as Wealthsimple and Questwealth Portfolios, it’s easy to see why so many Canadians are ditching their financial advisors and switching to a more cost-efficient method of passive investing.
The best robo-advisors in Canada
Canada’s best robo-advisors are listed below. Since the method of investing is still relatively new, only a handful of options currently exist. Still, the options available are excellent for all levels of investing experience.
Wealthsimple is a robo-advisor based in Toronto, Canada. Since going into business back in 2014, Wealthsimple now manages over $1.6B in Canadian investments today. The robo-advisor has become popular among millennial investors but has since increased in popularity with other generations as well.
Today, Wealthsimple is considered one of the best robo-advisors in Canada. It has even earned various awards and celebrity endorsements.
Should I use Wealthsimple?
Wealthsimple makes wealth management a breeze. It’s extremely easy to get a sense of what investing is like when using this robo-advisor.
Wealthsimple requires no minimum investments to get started, which means you can start with any amount, big or small, and get a sense of how robo-advisors really work.
Wealthsimpe offers socially responsible investing options, as well as halal investing options. Management fees are relatively low and come with no additional fees for trading. It also allows you to make automatic contributions from your bank account.
Living up to its name, Wealthsimple also has an intuitive, easy-to-use interface that makes everyday investing easy. Account-holders can make contributions and withdrawals easily. If you’re comfortable with online banking, you should find this comparable – and you may find that this feature alone eliminates any concerns about customer service.
That said, Wealthsimple might be a suitable robo-advisor for you.
Wealthsimple promotions, qualifications, and fees
- Ratehub.ca readers receive $10,000 managed for free for the first year with Wealthsimple.
- No minimum investment required.
- 0.5% commission charged on investments under $99,999.
- 0.4% commission on investments over $100,000.
- RRSP, TFSA, RESP, RRIF, LIRA, Joint, and Corporate investing options available.
Wealthsimple is best for low-fees and user-friendly interface. You can open a Wealthsimple account and take advantage of Ratehub.ca’s sign-up bonus.
2. Questwealth Portfolios
Questwealth Portfolios is a Toronto-based robo-advisor, owned and operated by Questrade, an online brokerage. While Questrade facilitates self-directed stock trading, Questwealth Portfolios creates ETF portfolios for investors who want in on the investing action but aren’t ready to commit to active trading. As a robo-advisor, Questwealth Portfolios is a safe means of passive investing, and one of the best robo-advisors in Canada.
Questwealth Portfolios is a Toronto-based robo-advisor, owned and operated by Questrade, an online brokerage.
While Questrade facilitates self-directed stock trading, Questwealth Portfolios creates ETF portfolios for investors who want in on the investing action but aren’t ready to commit to active trading.
As a robo-advisor, Questwealth Portfolios is a safe means of passive investing, and one of the best robo-advisors in Canada.
Questwealth Portfolios offers investors the most cost-efficient rates on the market, starting at 0.20% a month on investments up to $1,000 in value.
Commission rates can go as high as $333 a month for investments of $2M. When investing with Questwealth, there are no fees or commissions to open or close an account, no trading fees, and no transfer fees on electronic funds. Questwealth Portfolios also offers an award-winning desktop interface and mobile application. They also provide exceptional customer service, with options for active portfolio managers to help provide feedback and insight.
Whether you choose to go down the self-directed route with Questrade or the passive investing route with Questwealth, the company offers exceptional rates regardless of which option you choose. As far as the best robo-advisors in Canada go, Questwealth is an all-around popular option and a certified favourite among Canadian investors looking to cut back on fees.
Questwealth qualifications, and fees
- 0.25% on investments under $99,999.
- 0.20% on investments over $100,000.
- No minimum investment required.
Questrade has become incredibly popular as a low-cost option for self-directed and passive investing. It also offers its own robo-advisor called Questwealth Portfolios.
Justwealth is an online wealth management group that auto-manages investment portfolios. Though Justwealth is a Toronto-based registered portfolio manager, Canadians living in all ten provinces are eligible to invest with Justwealth. Justwealth is a robo-advisor and specializes in providing financial advice and portfolio management.
Why use Justwealth?
Justwealth’s fees are standard across the board for robo-advisors in Canada, starting at 0.5% on investments under $500k. Investments over the $500k threshold are charged at a rate of 0.4%. Justwealth also offers an average ETF rate of 0.2%, with automatic portfolio rebalancing and USD investment accounts available.
Unlike many of the best robo-advisors in Canada, Justwealth clients have access to Registered Portfolio Managers who can provide advice and insight based on their expertise. With the added luxury of Registered Portfolio Managers, a minimum investment of $5,000 is required to open an account with Justwealth.
Justwealth promotions, qualifications, and fees
- Ratehub.ca readers earn up to $500 upon sign-up.
- Minimum investment of $5,000 is required to open an account.
- RESPs require no minimum contribution.
- Annual account management fee of 0.5% on contributions under $500k.
- Annual account management fee of 0.4% on contributions under $500k.
4. Nest Wealth
As one of the first robo-advisors in Canada, Nest Wealth is struck a chord with Canadians looking to invest their money in more specific ETFs. While Nest Wealth may charge higher fees to smaller investors, they also offer more customization than their competitors. Each new client has the opportunity to work with a (human) dedicated portfolio manager to build a custom portfolio that suits their specific investment goals.
If you’re new to investing or wary of the robo part of the equation, this feature alone could be well worth the extra fees.
Should I Use Nest Wealth?
Unlike many of its robo-advising peers, Nest Wealth takes a different approach to fees. Rather than charging a percentage of your overall portfolio, Nest Wealth charges monthly subscription fees ranging from $20 to $80 per month. That’s great news for large investors, who could quickly pay a lot more with other robo-advisors. But for small investors, the monthly minimum of $20 is much higher than you would usually pay elsewhere.
That said, if you’re looking to invest a large sum of money into a robo-advisor, Nest Wealth might be a suitable and cost-effective option. Overall, you’re not likely to save money by choosing Nest Wealth unless your portfolio is worth $200,000 or more – but if you do have a collection of that size, the maximum monthly fee of $80 represents huge savings over other options. Depending on the amount you deposit, Nest Wealth is the among the best robo-advisors in Canada for investors making investments larger in sum.
Trading fees are extra as well but do not exceed $100 per year. On the upside, Nest Wealth has some of the industry’s lowest management expense ratio (MER) fees built into its funds. If interested, give Nest Wealth a try free for the first three months.
Nest Wealth promotions, qualifications, and fees
- $20 per month for portfolios with $75,000 or less.
- $40 per month for portfolios between $75,000 and $150,000.
- $80 for portfolios more than $150,000.
- No minimum investment required.
Founded in 2014, Wealthbar is of Canada’s longest-running robo-advisors and based in—you guessed it—Toronto, Canada. Since moving into the wealth management space, Wealthbar has become one of the best robo-advisors in Canada. Wealthbar’s fees are higher than most robo-advisors. Most investors will find a more affordable option elsewhere, and their sliding scale ‘doesn’t get you their lowest management fee until your investments total $500,000 or more.
Why Use Wealthbar?
Wealthbar was one of the first robo-advisors in Canada and remains a popular choice. While Wealthbar matches its competitors in many areas, like CIFP insurance and choice of investments, its key differentiator is its additional financial planning services. In addition to a non-commission financial advisor, each client also has access to estate, tax, and insurance planning options.
Wealthbar qualifications and fees
- 0.60% on investments up to $150,000.
- 0.57% on investments between $150,000 to $175, 000.
- 0.55% on investments between $175, 000 to $200, 000.
- 0.53% – 0.41% on investments $225, 000 to $1,000,000.
- A minimum deposit of $1,000 required.
6. RBC InvestEase
RBC is a reasonably new player in the robo-advisor space, and their offering falls behind some of the most established players. Notably, there’s no break in fees for more extensive portfolios (everyone pays 0.50% no matter what), and there are no socially responsible investment options as yet. It’s still early days for RBC InvestEase, however, so watch for this big bank to make up for these shortcomings quickly.
For those who are new to investing, the simplicity of RBC InvestEase and its well-known brand will undoubtedly be attractive. Note you don’t have to use any of RBC’s other products to open an RBC InvestEase account, and if you’re an RBC chequing account customer, you’re free to choose any investment provider you like.
Why use RBC InvestEase?
If the name didn’t give it away, RBC InvestEase is provided by RBC, one of Canada’s oldest and most reliable banks. Using RBC InvestEase provides additional security and investing options tailored to your specific needs. Customer service is plentiful as well, and available in various methods, suited for your needs.
RBC InvestEase qualifications and fees
- An annual management fee of 0.50% with sales tax, billed monthly.
- An MER fee of 0.11% – 0.30%, which covers the cost of purchasing the investments, rebalancing your investment portfolios, and access to advisors.
- $100 to start investing, no minimum deposit for a minimum amount.
- $1,500 to transition into a Standard or Responsible Investing portfolio.
7. BMO SmartFolio
BMO SmartFolio more closely tracks a traditional investment provider than a robo-advisor, offering simplicity and a human touch for those who are still wary about putting their financial future in the hands of a machine. New customers choose from five portfolios, which are all actively managed by humans. Rather than the system rebalancing each investor’s account, the entire collection is rebalanced quarterly, somewhat resembling a mutual fund.
If you’re new to investing or have a low tolerance for risk, this approach may be attractive to you. Conversely, if you’re looking for a customized portfolio or more frequent automatic rebalancing, BMO SmartFolio won’t offer you the flexibility you want. BMO SmartFolio also has some of the highest fees in the industry. Its management fees start at 0.70%, and its MER fees built into its funds are on the higher side of average.
Why use BMO SmartFolio?
BMO SmartFolio is a robo-advisor run by a major bank. In fact, BMO is Canada’s first bank. Though their prices tend to be a little higher for lower investments, BMO provides exceptional customer service to its customers, with various methods of customer service. As a major financial institution, BMO SmatFolio provides increased security and reliability to its customers.
BMO SmartFolio qualifications and fees
- First $100,000 is charged at an annual rate of 0.70%
- Next $15,000 is charged at an annual rate of 0.60%
- Next $250,000 is charged at an annual rate 0.50%
- All investments above $250,000 are charged at 0.40%
- A minimum investment of $1,000.
- Up to $1,000 cashback for a limited time.
Invisor is equal parts robo-advisor as it is an insurance firm. As a robo-advisor, Invisor offers various saving and investing accounts, which help facilitate the investing process. Invisor, currently headquartered in Oakville, Ontario, offers one of the lowest fees at 0.5%, making them one of the most affordable and best robo-advisors in Canada. They also do not require a minimum investment when opening an account, making them a suitable option for all experience levels and financial backgrounds.
The robo-advisor operates in a similar fashion to most of the robo-advisors on this list, offering non-registered and registered accounts. Some of these registered accounts include TFSAs, Spousal and regular RRSPs, as well as RESPs. The robo-advisor is available to all Canadian citizens, excluding Yukon, Nunavut, and the North West Territories. However, an in-person visit might be required for new accounts.
Why use Invisor?
Invisor is definitely a smaller player in robo-advisors, which means your accounts can get more care and assistance specific to your investing goals. Additionally, pricing works at a flat rate, with an annual fee of 0.5% per annum.
Invisor qualifications and fees
- 0.5% flat fee for all investments.
Since 2013, ModernAdvisor has become one of the longest operating robo-advisors in Canada.
ModernAdvisor is available to all Canadian residents, and offers non-registered accounts, along with registered accounts such as TFSAs, RSPs, RRIFs, and RESPs.
There is no minimum balance required to open an account. In fact, accounts under $10,000 are managed at no cost. Costs $10,000 or higher are tiered, with costs over $10,000 charged an annual cost of 0.5%. Deposits between $100,000 and $500,000 are charged 0.4%. Deposits over $500,000 cost 0.35%. The average MER is 0.20%.
ModernAdvisor account holders can open an account online.
Why use ModernAdvisor?
ModernAdvisor offers tiered rates depending on the number of funds that you deposit into an account. Additionally, ModernAdvisor offers various options for investing, such as socially responsible investment options and various risk levels to help you manage and maximize your investing potential. Minimum deposits are not required to open an account, meaning you can contribute until you make it until the threshold of $1,000. It’s also easy to use.
ModernAdvisor qualifications and fees
- Tiered rate between 0.50% to 0.75%.
- No minimum balance required, but investing starts once an account reaches a deposit of $1,000.
10. Smart Money Capital Management
Smart Money Captial Management is another robo-advisor operating in Canada that operates on a much smaller scale. Currently, the wealth management platform operates exclusively in three provinces: Ontario, Alberta, and Quebec.
A minimum deposit of $5,000 is required to have access to non-registered and registered accounts, which include TFSAs, RRSPs, RRIFs, RESPs, and LIRA accounts. As a robo-advisors, Smart Money Captial Management offers many options for investing for Canadians.
Smart Money Captial Management charges an annual fee of 0.8% on all investments, with an average MER of 0.27%.
Why use Smart Money Capital Management?
Smart Money Capital Management offers non-registered account options, as well as TFSAs, RRSP, RESP, RRIF, and LIRA accounts. Smart Money Capital Management has more activity for its customers, hence the higher fees.
Smart Money Capital Management qualifications and fees
- Annual fee of 0.80%, charged monthly.
- Commission fees depending on trades.
- An account minimum of $5,000
What is a robo-advisor?
A robo-advisor manages investments on behalf of the client using an algorithm. Using a robo-advisor instead of a (human) financial advisor generally means the client pays less in management fees.
Before working with a robo-advisor, clients answer a set of questions outlining their preferences before any trading or investing happens. Preliminary questions are asked, which tend to involve their annual income, risk tolerance profile, and financial goals.
Opening and managing an account with a robo-advisor can be done online through the robo-advisor’s website or, if offered, through its mobile app.
How do robo-advisors work?
Every robo-advisor in Canada has its policies, usually differing in commission rate, trade method, and company policy. Generally, robo-advisors in Canada trade Exchange-Traded Funds (ETFs). ETFs combine various investments to create a portfolio for investors. In some ways, ETFs are similar to mutual funds, in that they combine many investments into one grouped investment.
As mentioned, robo-advisors use an algorithm to make investment decisions on behalf of the client. Depending on your risk tolerance, financial goals, and yearly income, robo-advisors make decisions based on what you want.
What do robo-advisors invest in?
Robo-advisors still need humans to some of the decisions that they eventually make. While robo-advisors in Canada do most of the heavy lifting involved with investing, as an investor, you still have most say into what your money is going into. Robo-advisor creates a diversified portfolio based on the information you provided before you opened the account.
Robo-advisors generally invest in US and Canadian bonds, short-yield and high yield bonds, real estate, commodities, futures, and other investment options.
Depending on the robo-advisor that you choose to work with, ETFs can be arranged to your liking. For example, Wealthsimple offers Halal Investing options for persons who are looking to invest in opportunities that align with their personal beliefs.
Are robo-advisors safe?
Risk-tolerance places a significant role in how safe your investments are when working with a robo-advisor. Risk-tolerance is how comfortable the investor is with risking their investments and stocks, which can be susceptible to sharp swings, depending on the agreement with the robo-advisor. If you choose in low-risk investments, robo-advisors can be a safe means of parking your money over several years. Before opening an account with a robo-advisor, investors will typically disclose what their risk tolerance risk is regarding their finances.
The Golden Rule of investing is “High risk; high return.” That said, the often unspoken second half of that rule is “High risk; harsh loss.” Since a robo-advisor is doing the investing on your behalf, the same rules apply. The volatility of robo-investors is on par with that of stocks; the risk level depends on the investor.
Things to consider when choosing a robo-advisor
As with all investments, your choice of providers comes down to personal preference. If you’re wondering how to choose the best robo-advisor in Canada, consider these five aspects.
Risk tolerance, also known as risk appetite, is how much an investor is willing to risk. Understanding what your personal tolerance to risk plays a pivotal role when using a robo-advisor and investing as a whole for that matter. Recognizing that you’ll likely see your investments rise and fall, it’s important to comfortably assess how much risk you’re willing to take. Your risk profile is a key factor that determines where you’re investing.
Investments: Since robo-advisors in Canada primarily deal with ETFs, some people want to know where their investments are going. Most robo-advisors will tell you what you are investing in, so you can choose where your money goes and what you are investing in.
Minimum investment requirements, fees, and promotional offers: Many robo-advisors—but not all—require a minimum investment before opening an account. Generally, the minimum investment begins at $1,000, though this might not entirely be the case.
Though robo-advisors come with fewer fees and commissions to that of regular financial advisors, its influential to consider expenses, as they can add up over the years – and sometimes decades – of service use. If you’re considering leaping robo-advisors, it’s always more beneficial to get more bang out of your buck with promotional offers.
How to choose the right account for your investments
Regardless of what robo-advisor you end up picking, you’ll have to decide on what type of account you’ll want to keep your investments in.
This is also the case if you find yourself using an online brokerage. Generally, most robo-advisors will offer a Tax-Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP). If you haven’t maxed your contribution limit for each account, you can earn tax-free gains, dividends, and interest using these accounts.
However, if you have maxed your contribution limits in both tax-free accounts, you’ll have to place your investments in a non-registered account.
Tax-Free Savings Accounts (TFSAs) offer Canadians the option to place several investments and savings into a tax-free account. TFSAs are incredibly flexible, allowing free withdrawals and deposits with no tax penalties. You can increase your wealth by earning tax-exempt interest. Since TFSAs are registered accounts, they come with contribution limits and are registered with the Government of Canada. TFSAs can also hold Guaranteed Investment Certificates (GICs), bonds, stocks, and more.
Registered-Retirement Savings Plan (RRSPs) aren’t as flexible as TFSAs, but still offer some great benefits for investors. RRSPs can reduce the amount of tax that you pay each year on your income. Withdrawals are taxed, however. In fact, withdrawals are taxed at the same rate as your employment earnings are and upon withdrawal. These accounts can hold lots of types of investments, including ETFs, GICs, stocks, bonds, and more.
Non-Registered Accounts do not come with a contribution limit and are reasonably flexible when it comes to making withdrawals and contributions.
Non-registered accounts are not registered with the government. This means the accounts are taxable. However, different non-registered acounts come with different benefits. Dividend accounts come with a dividend tax credit, while capital gains in non-registered accounts are taxed at a rate of 50%.
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