Investing: Canada’s best robo-advisors

What is a robo-advisor?

Robo-advisors are very commonly known as wealth management platforms. They’re cloud-based, which means that everything is done online and the robo-advisor invests your money on your behalf.

You don’t need to be tech-savvy to understand how it works, but the ease of use of their platforms is what matters most. Most robo-advisors work the same way. You start by filling out a questionnaire to determine your risk tolerance, connect your bank account to the online platform, and enter the amount you want to invest. The robo-advisor then invests your money in funds and constantly rebalances your funds to keep your assets where they need to be.

There are different accounts where you can put your money, for example:

• Stocks
• Chequing accounts
• Tax-Free Savings Accounts (TFSAs)
• Registered Retirement Savings Plans (RRSPs)
• Registered Retirement Income Funds (RRIF)
• Registered Education Savings Plan (RESP)

Canada’s best robotic advisors to choose from

Now that you know what to expect when investing with a robo-advisor, you need to choose the best wealth management platform for your needs. Here is a list of some of Canada’s best robot advisors:

Questwealth Portfolios

Questrade is one of Canada’s largest independent brokerage firms and is known for its discount brokerage. The robo-advisor option is popular and was rebranded as Questwealth Portfolios in 2018. With low fees, the platform is easy to use and offers a solid investment experience.

What they do: Questwealth has combined technology and human interaction to create five actively managed ETF portfolios: aggressive, growth, income, balanced, and conservative. These portfolios can be used in various accounts offered, such as RRSPs, TFSAs, cash, etc.

Best for: Questwealth Portfolios is best suited for Canadians who prefer to be involved in their own investments, so their platform was designed for more experienced investors, although anyone can use their platform, including beginners.

Fees: There are two main fee structures:

• 0.25% on account balances from $0 to $99,999.
• 0.20% on account balances over $100,000.
• Minimum balance – $1,000
• No transfer fees or account opening or closing fees.

Wealthsimple

This Toronto-based robo-advisor has over $5 billion in assets under management. Its interface is user-friendly, and it is accessible to all investors, as there is no minimum investment amount.

What the platform does: Wealthsimple offers three main portfolios: growth, conservative, and balanced. As an investor, you cannot choose your portfolio. Wealthsimple selects a portfolio for you based on the answers given in the registration questionnaire that generates your risk tolerance. There are several account options, including TFSA, RRSP, LIRA, and RRIF, as well as an investment account for business owners.

Best for: If you are looking for simplicity, then Wealthsimple is for you. Assets over $100,000 give you access to the Core tier, which offers lower fees as well as a financial planning session with an advisor. Automated tax-loss harvesting also provides tax savings. You reach the Generation tier by depositing $500,000 or more, which unlocks the lowest fees, access to private markets, and in-depth financial planning with a team of advisors.

Fees:

• 0.5% on account balances between $0 and $99,999 (Essential tier).
• 0.4% on account balances of $100,000 and more (Core tier).
• Up to 0.2% on balances of $500,000 and more (Generation tier).
• Minimum balance – $0 (zero)

CI Direct Investing

CI Direct Investing was formerly known as WealthBar. What sets it apart from its competitors is that financial advice is a fundamental part of its offering. Portfolio managers build the funds, which rely primarily on ETFs.

CI Direct Investing combines an advice bot with unlimited access to a financial advisor for advice. Advice is available by phone or chat, and investors can seek advice if needed.

Access to private investment portfolios allows investors to access a larger and more diversified asset class, which reduces volatility and improves risk-adjusted returns over the long term.

What the platform does: Two portfolios are available: private investment portfolios and a low-cost ETF portfolio. The private investment portfolios include five portfolios ranging from aggressive to conservative, including ETFs and Vanguard. The latter option consists of three portfolios invested in mortgages, private funds, etc.

Best for: CI Direct Investing is perfect for investors who want to have more choices and diversify their portfolios. A central aspect of CI Direct Investing is diversification, with portfolios that include real estate.

Fees:

• 0.6% on account balances between $0 and $150,000.
• 0.4% on the next $350,000
• 0.35% on accounts with balances over $500,000.
• The fee is waived for the first year for investments of $10,000 when you sign up and fund your account.
• Minimum balance – $1,000

Justwealth

Based in Toronto, Justwealth is classified as a sophisticated advisory robot. You get a personal portfolio manager to help you find the right ETFs for your portfolio, all based on your own objectives. Accounts available include RESPs, RRSPs, RRIFs, TFSAs and tax-free accounts.

What the platform does: Justwealth offers over 660 wallets, including U.S. dollar wallets. Personalized capital loss recovery is also available. Your personal portfolio manager is a real person who manages your portfolio and whom you can contact if you have any questions.

Best for: Justwealth is perfect for Canadians who want broader investment options.

Fees:

• 0.5% on account balances between $0 and $500,000.
• 0.4% on accounts over $500,000.
• All accounts, except RESPs, are subject to a minimum monthly fee of $4.99.
• RESPs cost $2.50 per month.
• Minimum balance – $5,000

Nest Wealth

Nest Wealth is unique because it focuses on advisors and workplaces. While several options are offered for individuals, they have a Pro version that allows fund companies to set up robots with their own products.

What the platform does: Nest Wealth will allocate your funds based on your risk tolerance while regularly rebalancing your portfolio. It will distribute your money across six different asset classes, such as government fixed income, emerging markets, domestic equities, real estate, real return bonds, and international equities.

Best for: If you’re looking for a user-friendly and passive approach to investing, then Nest Wealth is for you. It’s not difficult to understand, and your monthly fees will remain unchanged as your assets grow. Businesses can improve their employee benefits offerings. Advisors can spend more time planning and less time investing.

Fees:

• 20 per month on account balances between $0 and $75,000.
• 40 per month on account balances between $75,000 and $150,000.
• 80 per month on account balances over $150,000.
• Minimum balance – $0 (zero)

BMO Smart Portfolio

Like other banks, BMO offers robo-advisors as part of its services. BMO SmartFolio uses ETFs and designs its portfolios with real fund managers from BMO Global Asset Management. Anyone can use BMO SmartFolio, even though most of its investors already bank with BMO.

What the platform does: When you sign up, you’ll answer questions to determine your risk tolerance. You’ll then be matched with one of its five portfolios, which feature a wide variety of assets. Each portfolio is composed of a mix of BMO ETFs. Asset allocation can be easily changed, especially as your life goals change (e.g., marriage or children).

Best for : BMO Smart Portfolio is ideal for investors seeking a combination of passive and active investments. Investors can let go of their investments, and if something happens in the market, portfolio managers will adjust the asset allocation accordingly. As an investor, you can contact a team of advisors directly by email, phone or live chat.

Fees:

• 0.7% on account balances between $0 and $100,000.
• 0.6% on account balances between $100,000 and $150,000
• 0.5% on account balances between $150,000 and $250,000.
• 0.4% on account balances over $500,000.
• Minimum balance – $1,000

Invisor

Invisor is managed by Alliance Insurance and Financial Services Inc. It differs from other robo-advisors because it places investors in one of its seven ETF portfolios based on their goals. These portfolios range from “Security” for low risk to “Equity Only” for higher risk. They also offer products such as disability, life, and critical illness coverage, and financial advisors are available to answer all your investment questions.

What the platform does: Invisor’s seven portfolios are managed by professional investment managers, who also offer passive ETFs from iShares and Vanguard. Depending on your risk tolerance, there is a wide range of asset combinations.

Best for: If you’re looking for a robo-advisor that handles everything from investments to insurance, consider Invisor. It’s a one-stop shop for consolidating all your financial products on a single platform.

Fees:

• 0.7% on the balance of all accounts. This includes a 0.2% management expense ratio (MER) fee for the securities in the portfolio and a 0.5% Invisor management fee.
• Minimum balance – $0 (zero). Deposits are held as cash until your balance reaches $1,000.

RBC Invest-Clic

RBC InvestEase is a simple robo-advisor option for investors. RBC and BlackRock merged to create RBC iShares, making it the largest ETF provider in Canada. Their portfolios are filled with iShare products thanks to this merger. RBC InvestEase is a user-friendly robo-advisor, allowing it to easily compete with others on the market.

What the platform does: RBC InvestEase offers two main types of portfolios: standard investment and responsible investment. Within these two portfolios are five other options that adapt to your risk tolerance levels. RBC InvestEase rebalances portfolios throughout the year based on your financial goals.

Best for: RBC InvestEase is the best solution for Canadians looking for easy ways to invest their money. Since there is only one fee structure, investors know what they’re getting at all times. Their investments are considered secure because they are backed by a large bank. Financial advisors are available to answer questions in English and French.

Fees:

• 0.5% on the balance of all accounts
• Minimum balance – $0 (zero). Investments will not begin until your account balance reaches $100.

Conclusion

When investing with a robo-advisor, make sure the one you choose is regulated by the CIRO (which since 2023 includes the former IIROC and MFDA) and covered by the Canadian Investor Protection Fund (CIPF). Online security is essential when investing on an online investment platform. If the robo-advisor is regulated, you are protected against platform bankruptcy or fraud. In addition, some robo-advisors use two-factor authentication for added security.