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The Best Robo Advisors in Canada

Not many Canadians know how to invest their money. There’s confusion about where to invest, how much to invest, hidden fees, etc., and they all lead to financial anxiety.

If you’re looking for technology that can help you on your financial journey in investing, then consider a robo advisor. With lower fees, robo advisors are perfect for those that don’t know what they’re doing and have no understanding of investing.

You don’t need to have a lot of money to invest with a robo advisor, and there’s a minimal hands-on approach to this investment type.

What is a Robo Advisor?

Robo advisors are very commonly known as wealth management platforms. They are cloud-based, meaning everything gets done online, and the robo advisor invests your money on your behalf.

You do not need to be digitally inclined to understand how it works, but the ease of use of their platforms is what matters most. Most robo advisors work in similar ways. You start by completing a questionnaire to determine your risk tolerance, connect your bank account to the online platform, and enter the amount you wish to invest. The robo advisor then invests your money into funds and constantly rebalances your funds to keep your assets where they need to be.

There are various  accounts into which you can get your money invested, such as:

  • Stocks
  • Cheque accounts
  • Tax-free savings accounts (TFSA)
  • Registered retirement savings plans (RRSP)
  • Registered retirement income funds (RRIF)
  • Registered education savings plans (RESP)

The Best Robo Advisors in Canada 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 suited to your needs. Here’s a list of some of Canada’s best robo advisors:

Questwealth Portfolios

Questrade is one of the largest independent brokerages in Canada and is known for its discount brokerage. The robo advisor option is popular and rebranded to Questwealth Portfolios in 2018. With reduced fees, they are easy to use and provide a robust investing experience.

What they do: Questwealth has combined technology with human interaction to create five ETF portfolios that get actively managed – Aggressive, Growth, Income, Balanced, and Conservative. These portfolios can get used in different accounts offered, such as RRSPs, TFSAs, cash, etc.

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

Fees: There are two main fee structures:

  • 25% on account balances of $0 – $99,999
  • 2% on account balances greater than $100,000
  • Minimum balance – $1,000
  • No transfer fees or charges to open or close an account

Wealthsimple

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

What they do: Wealthsimple has three principal portfolios, namely growth, conservative, and balanced. As an investor, you can’t choose your portfolio. Wealthsimple selects a portfolio for you based on the answers given in the signup questionnaire that generates your tolerance to risk. There are various account options, including TFSA, RRSP, LIRA, and RRIF, and an investment account for business owners.

Best for: If you’re looking for simplicity, then Wealthsimple is what you need. Assets of more than $100,000 will get you access to Wealthsimple Black, which comes with reduced fees, access to airport lounges globally, and a financial planning session with an advisor. There are also potential tax savings from automated tax-loss harvesting. Gain access to Wealthsimple Generation by depositing $500,000 or more, which lets you create custom portfolios and includes an in-depth financial planning session with an advisor.

Fees:

  • 0.5% on account balances between $0 and $99,999
  • 0.4% on account balances greater than $100,000
  • Fees get waived for the first year on investments of $10,000
  • Minimum balance – $0 (zero)

CI Direct Investing

CI Direct Investing was formerly known as WealthBar. What makes them stand out against competitors is that financial advice is fundamental to what they offer. Portfolio managers construct the funds, which get based mainly on ETFs.

CI Direct Investing combines a robo advisor with unlimited access to a financial advisor for advice. The advice can get accessed via phone or chat, and investors can ask for input when needed.

Access to Private Investment Portfolios allows investors to gain access to a larger asset class of diversification, reducing volatility and improving risk-adjusted returns over the long run.

What they do: There are two portfolios available – private investment portfolios and a low-cost ETF portfolio. Private investment portfolios have five portfolios ranging from aggressive to conservative, including ETFs and Vanguard. The latter option gets made up of three portfolios invested into mortgages, private equity, etc.

Best for: CI Direct Investing is perfect for investors interested in more choices and various ways of diversifying their portfolios. A central aspect of CI Direct Investing is diversification, with portfolios including some real estate.

Fees:

  • 0.6% on account balances between $0 and $150,000
  • 0.4% on the next $350,000
  • 0.35% on accounts greater than $500,00
  • Fees get waived for the first year on investments of $10,000 when you sign up and fund your account.
  • Minimum balance – $1,000

Justwealth

Based in Toronto, Justwealth gets classified as a sophisticated robo advisor. You benefit from a personal portfolio manager who helps you find the right ETFs for your portfolio, all based on your own goals. Accounts available include RESP, RRSP, RRIF, TFSA, and non-taxable accounts.

What they do: Justwealth has more than 660 portfolios, including US dollar portfolios. Personalized tax-loss harvesting is also available. Your personal portfolio manager is a real person who manages your portfolio and is available for contact when you have any questions.

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

Fees:

  • 0.5% on account balances between $0 and $500,000
  • 0.4% on accounts greater than $500,00
  • All accounts, excluding RESPs, have to pay a minimum monthly fee of $4.99.
  • RESPs pay $2.50 monthly.
  • Minimum balance – $5,000

Nest Wealth

Nest Wealth is unique as they direct their focus to advisors and workplaces. Although they have various options available to individuals, they have a Pro version that lets fund companies set up robos with their own products.

What they do: Nest Wealth will allocate your funds depending on your risk tolerance while rebalancing your portfolio regularly. They 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 fee will remain unchanged as your assets grow. Companies can enhance their employee benefits offerings. Advisors can spend more time planning and less time investing.

Fees:

  • $20 monthly on account balances between $0 and $75,000
  • $40 monthly on account balances between $75,000 and $150,000
  • $80 monthly on account balances greater than $150,000
  • Minimum balance – $0 (zero)

BMO SmartFolio

BMO is like other banks, offering robo advisors to their services. BMO SmartFolio uses ETFs and designs its portfolios with real-life fund managers from BMO Global Asset Management. Anyone can use BMO SmartFolio, even though most of their investors already bank with BMO.

What they do: Upon signing up, you will answer questions to determine your risk tolerance. You will then get matched with one of their five portfolios, which have a wide variety of assets. Each portfolio comes with a mixture of BMO ETFs. Asset mixes can be changed easily, significantly when your life goals change (such as marriage or kids).

Best for: BMO SmartFolio is best for investors who are looking for a combination of passive and active investments. Investors can leave their investments, and if anything happens in the market, portfolio managers will adjust the asset mixes accordingly. As an investor, you can directly contact a team of advisors via 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 greater than $500,000
  • Minimum balance – $1,000

Invisor

Invisor gets managed by Alliance Insurance and Financial Services Inc. They differ from other robo advisors, as they put investors into one of their seven ETF portfolios based on their goals. These portfolios range from Safety for low risk to All Equity for higher risk. They also offer products such as disability, life, and critical illness cover, with financial advisors available to answer any of your investing questions.

What they do: Invisor’s seven portfolios get managed by professional investment managers, which also have passive ETFs available from iShares and Vanguard. Depending on your risk tolerance, there is a wide range of asset mixes.

Best for: If you’re looking for a robo advisor with everything from investments to insurance, consider Invisor. It’s a one-stop-place to keep all your financial products on one platform.

Fees:

  • 0.7% on all account balances. This includes a 0.2% fee for management expense ratio (MER) on securities within the portfolio, as well as 0.5% towards Invisor’s management fee.
  • Minimum balance – $0 (zero). Deposits get held as cash until your balance reaches $1,000.

RBC InvestEase

RBC InvestEase is a simple robo advisor option for investors. RBC and BlackRock combined to create RBC iShares, making them the biggest provider of ETFs in Canada. Their portfolios are full of iShare products due to this merger. RBC InvestEase is a user-friendly robo advisor, which makes them easy competition against others in the market.

What they do: RBC InvestEase comes with two leading portfolio types, namely standard and responsible investing. Within these two portfolios are five other options that fit according to your levels of risk tolerance. RBC InvestEase rebalances portfolios throughout the year according to your financial goals.

Best for: RBC InvestEase is best for Canadians looking for easy ways to invest their money. Because of only one fee structure, investors know what they’re getting at all times. They get considered safe as a large bank backs them. Financial advisors are available to answer questions in both English and French.

Fees:

  • 0.5% on all account balances
  • Minimum balance – $0 (zero). Investments will only begin once your account balance reaches $100.

Conclusion

When investing with a robo advisor, ensure the one you choose gets regulated by either IIROC or CIPF. Online safety is essential when investing in any online investment platform. If the robo advisor is regulated, you can assure yourself that you get protected from the investment platform from going bankrupt or if there’s a fraud. There are robo advisors that will use two-factor authentication for the added security.

Robo advisors are the way of the future, and investors should not be afraid of this unique technology. The world is shifting towards a digital platform in everything we do, and we should all be at the forefront of technology, embracing the human touch and the robos.

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