The Best Robo-Advisors in Canada for 2019

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by Ratehub.ca May 7, 2019 / No Comments

All rates are current as of May 7, 2019.

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Ratehub.ca is dedicated to helping Canadians make every last cent of their money count. We compare mortgages so you can spend less on your home. We compare credit cards so you can earn more rewards for the purchases you were going to make anyway. We compare GICs and savings accounts so your savings can grow quicker than ever. Now, we’re shifting our focus to the online-brokerages space by comparing the best robo-advisors in Canada, in hopes of making your hard-earned money see even more growth.

Canadians have relied on investment advisors to keep their portfolios in order for quite some time. Since investments are generally difficult to track and compare, many advisors have dedicated their lives to mastering the art of picking stocks with success rates that don’t outperform random chance. The best strategy that’s been borne out over time is to buy funds that track large portions of the market, tailored to your goals and risk profile.

Enter robo-advisors. These online tools focus on reducing fees, eliminating visits with advisors, and making automatic changes to keep portfolios balanced. Many options for robo-advisors have surfaced on the market over the past few years. From the fast-growing Wealthsimple to financial management solutions offered by Big Banks, Ratehub.ca’s picks for the best robo-advisors in Canada can be found below.


The Best Robo-Advisors in Canada for 2019

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Robo-Advisor Fees and Minimum Investment Requirement Promotion
Wealthsimple
  • Yearly Commission Rate: Under $100k – 0.50%
  • Yearly Commission Rate: Over $100k – 0.40%
  • MER: 0.20%
  • Minimum Investment: None.
$10k managed free of charge for the first year.
Justwealth
  • Yearly Commission Rate: Between $0 – $100k+ – 0.50%
  • Yearly Commission Rate: 0.4% on $100k+
  • MER: 0.20%
  • Minimum Investment: $5,000
Up to $500 cash bonus on new account sign-ups.
Questwealth Portfolios
  • Yearly Commission Rate: Under $100k – 0.25%
  • Yearly Commission Rate: Over $100k – 0.20%
  • MER: 0.19%
  • Minimum Investment: $1,000.
N/A.
Nest Wealth
  • Monthly Commission Rate: Under $20k – $20/Month
  • Monthly Commission Rate: Between $75k and $150k – $40/Month
  • Monthly Commission Rate: Over $150k – $80/Month
  • MER: 0.13%
  • Minimum Investment: None.
N/A.
Wealthbar
  • Yearly Commission Rate: Between 0.26% – 0.34%
  • Yearly MER: 0.20%
  • Minimum investment: $1,000
N/A.
RBC InvestEase
  • Yearly Commission Rate: 0.10% – 0.17%
  • MER:0.50%
  • Minimum Investment: $1,000
N/A.
BMO SmartFolio
  • Yearly Commission Rate: 0.70%
  • MER: 0.20% – 0.35%
  • Minimum Investment: $1,000
N/A.

Wealthsimple

Wealthsimple is a robo-advisor based in Toronto, Canada. The company manages over $1.6B in investments, with holdings primarily in Canada, as well as Europe and the United States. Wealthsimple became the leading choice for millennial investors due to clever marketing campaigns and competitive fees but has since garnered popularity and usage from investors from all financial backgrounds. Today, Wealthsimple is considered one of the best robo-advisors in Canada.

Should I Use Wealthsimple?

That growth has come at a cost to Wealthsimple, whose customer service has suffered as a result of the exponential growth. The benefits, however, far outweigh this drawback. Wealthsimple requires no minimum investment, allows you to make automatic contributions, and offers socially responsible investment options. With relatively low management fees and no extra trading fees, Wealthsimple is an affordable option for rookie and experienced investors alike.

Living up to its name, Wealthsimple also has an intuitive, easy-to-use interface that makes it everyday actions like making contributions and withdrawals a breeze. 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 the sign-up bonus or read a Wealthsimple review to learn more.

  • Get up to $10,000 managed for free for one year.
  • Choose between Conservative, Balanced, and Growth Risk Profiles.
  • Halal investing options available.

Justwealth

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. Though Justwealth is a robo-advisor, they specialize 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.
  • Up to $500 sign-up bonus for Ratehub.ca readers.
  • Portfolio managers and customer support team.
  • Minimum investment of $5,000.

Questwealth

Questwealth is another robo-advisor in Canada that provides online portfolio management services in Toronto, Canada. Questrade, an online brokerage and investing platform, owns the platform. While Questrade facilitates self-directed stock trading, Questwealth creates stock portfolios for investors who want in on the action but may not be willing to commit to active trading.

Why Use Questwealth?

Questwealth offers investors the most cost-efficient rates on the market, starting at 0.20% a month for investments up to $1,000. Commission rates 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 also has an award-winning desktop interface and mobile application. They also offer exceptional customer service and active portfolio management. 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 take. As far as the best robo-advisors in Canada go, Questwealth is an all-around popular option and a certified favourite among Canadian investors.

Questwealth Promotions, Qualifications, and Fees.

  • 0.20% on investments under $99,999.
  • 0.25% on investments over $100,000.
  • No minimum investment required.

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 too 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.

Read: A Review of Nest Wealth


Wealthbar

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 Promotions, 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.

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.


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.


What is a Robo-Advisor?

A robo-advisor might sound like something right out of a sci-fi novel, but rest assured, it’s anything but fictitious. Robo-advisors or online wealth managers manage your investment portfolio using an algorithm that makes investment decisions on behalf of the client. Using a robo-advisor instead of a (human) financial advisor typically means fewer fees but generally involves yields lower returns.

Before working with a robo-advisor, clients answer a set of questions outlining their preferences before any trading or investing occurs. Preliminary questions asked usually involve asking a potential investor what their annual income is, as well as what their risk-tolerance and financial goals are. Opening and managing an account with a robo-advisor can be done online and is usually accomplished through the robo-advisor’s website or 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 (EFTs). EFTs combine various investments to create a portfolio for investors. In some ways, EFTs 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.


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 to that of stocks; the risk level depends on the investor.


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.


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

Rick 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 EFTs, 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 – though 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.

Want to learn more about some of the best Canadian robo-advisors? Compare best robo-advisors in Canada

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