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A Comprehensive List Of Best Robo Advisors In Canada!

With the digital era taking over the world, you cannot miss out on the craze of Robo-advisors. The craze regarding them is uncanny, almost unbelievable! However, it is all because of their great features and the benefits that they provide to the clients. Some of the best Robo advisors in Canada include Questwealth, CI Direct Investing, Wealthsimple, etc.

Even a new investor can create tailored investment portfolios with the help of a Robo advisor in order to serve their eccentric investment goals, in accordance with risk tolerance, returns, and all that without charging ridiculous payments from them. People are in favor of things that save their money. Hence, Robo-advisors will not go out of trend any time soon. If you are also looking to invest money using a Robo advisor, this is your guide. So, let’s get into it without any further wait. 

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Meaning of Robo-advisors

Best Robo Advisors in Canada

Robo advisors help manage your investment and money as they are online wealth management algorithms provided by financial or wealth management firms. They help you trade in various financial instruments such as bonds, stocks, mutual funds, ETFs, etc. Investors use it profusely because it generally has very lower or no fees, along with the benefit of higher and long-term returns.

To start with these advisors, you will have to go through a series of tests, like answering questions. With that, the Robo advisors can create a customized plan for you on the basis of different factors. Within the course of time, the Robo advisor will keep re-adjusting your portfolio in your investment accounts to avoid any loss beyond the limit that was allotted. All you have to do is put in the money, and the rest will be done for you.

You might think that Robo advisors are not any different from the bank that helps invest your money in mutual funds. However, that is not the case. A Robo advisor helps you to diversify your portfolio with low fees and also gives you access to wealth management services. Doing investment the traditional way needs you to invest a lot of money. Independent advisors and companies have clients whose portfolio exceeds over $1 million! And not everyone will have this huge investment amount, thus Robo advisors enter!

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List of Best Robo-advisors in Canada in 2021

Robo advisors adopt passive investing strategies, hence, lowering the fees. This enables you to get more returns and create extensive wealth for yourself. However, it is clear that you cannot compare the investment done by humans with Robo-advisors. It is clear that high investment fees will dampen your returns, and when this is combined with the active strategies, it has been proved that active fund managers overperform their benchmark, depending on the market condition. 

1. Wealthsimple

This is one of the most pre-eminent Robo advisors in Canada, with operations in the U.K and the U.S. as well. It has over $8.4 billion assets under its management right now.

It is the top pick for choosing the best Robo advisors in Canada. You can open an RRSP, RRIF, LIRA, RESP, and TFSA account with Wealthsimple, including non-registered accounts. They recently have announced the ability to open cash accounts as well.

The benefits of Wealthsimple are as follows

  • You can rely on automatic rebalancing if your portfolio sways away from your goal and the required asset allocation.
  • A portfolio that is tailored to your specific investment needs and other aspects related to it.
  • You are allowed to reinvest your dividend to further maximize your returns. 
  • Planning advice, not through a robot, but an experienced human.
  • You can reduce your tax liability via tax-loss harvesting.
  • Your funds are protected via bank-level security and the Canadian Investor Protection Fund of up to $1 million.
  • There is also the feature of the Wealthsimple roundup that allows you to invest the spare change in ETFs that have low cost. The overflow feature was also introduced recently. It allows you to track your account and invest or save the extra money that you have in excess.
  • Welathsimple also has a $0 commission online stock trading service, if you want to try your hands on investing yourself. 

You can open 2 types of accounts in Wealthsimple, that is, Wealthsimple Basic and Wealthsimle black:

  • Accounts with amounts $0-$100k: 0.50% fee annually.
  • Accounts above $100 fee: 0.40% fee annually.

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2. Questwealth 

Questwelath was formerly called Portfolio IQ, it is the extension of Questrade that was established in 2018. It has a very low investment fee in Canada, as compared to other Robo advisors. You can open TFSA, RRSP, RRIF, RESP, LIF, and other non-registered accounts.

The benefits of Wealthsimple are as follows:

  • Automated portfolio rebalancing when your investment money goes astray from the goals, to ensure your investment is on the track.
  • Questrade has been around the investment world for 20 years now. IIROC and CIPF regulate them and they also have the protection of up to $11 million.
  • It has proof of the portfolio for the returns that it has garnered over 10 years or so. Hence, you can track their performance before relying on it to invest for you.
  • It is a Robo advisor that believes in the active management of portfolios. Hence, making it stand out from the other Robo advisors. 

The fee of Questwealth is 0.25% annually if your portfolio is below $100,000 and 0.20% if your account is above $1000,000. You also have to bear the 1% fee on ETFs traded in USD and have to invest a $1,000 minimum in Questwelath. You can sign up and invest freely for 1 year in the amount of up to $10,000.

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3. CI Direct Investing (WealthBar)

Founded in 2013, this is the Robo advisor that had $225 million AUM (Asset under Management) by reaching the year 2018. You can open RRSP (spousal, group, or individuals), LIRA, LIF, RESP, TFSA, RRIF through this advisor including a non-registered account and corporate investment account.

Here are the benefits of CI Direct Investing:

  • A financial advisor that assesses your needs and provides impeccable advice.
  • Diversification of your portfolio to reduce the risk and maximize returns.
  • Free financial planning tools to aid you in excelling in investment, you can also get the advice of a financial planner. 
  • Your portfolio will be automatically re-balanced, hence taking the burden off you.
  • Estate planning and tax management is also a part of the service provided by CI Direct Investing,
  • They have a partnership with Nicola Wealth management, this allows you access to other investment pools.

This Robo-advisor also uses the tiered fee schedule. That incurs from up to 0.30% to 0.60% fee.

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Best Robo Advisors

4. Justwealth

Andrew Kirkland and James Gauthier founded Juatwealth in 2016. It is deemed as one of the most comprehensive online portfolio management services in Canada. You can open accounts from an array of options like TFSA, LIRA, RRSP, RRIF with a total of over 60 choices to choose from, including the non-registered investment accounts.

The benefits of Justwealth are as follows:

  • Financial planning without any charge and access to certified financial planners.
  • Invest in U.S. dollars as per your discretion.
  • If you are confused about certain aspects of your portfolio, you can get free detailed reviews to improve your investing game.
  • Promote your kid’s education via the Education target date RESP portfolio.

Fees:

  • Above $500k: 0.4%
  • $5,00- $500,000: 0.5%

If you have a very big portfolio, this will be an ideal account for you, as the RESP total here is also not subject to the minimum balance. 

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5. Nest Wealth

It is the first Robo-advisors in Canada and was launched in 2014, with eccentric policies on the fees, and a subscription-based pricing model. Nest Wealth is also one of the best Robo-advisors in Canada. 

You can open RRSP, LIRA, RRIF, RESP, and other non-registered accounts via Nest Wealth. They also have a service called “Nest Wealth At Work”, an RRSP for small businesses.

The benefits of Nest health are as follows:

  • A dedicated portfolio manager that gives professional portfolio advice according to your needs.
  • Nest Wealth, performs all the Nobel Prize-winning strategies for investment to ensure you get maximum returns and manage your portfolio with excellence. 
  • Your asset allocation is in good hands, you don’t need to worry or struggle with a calculator to re-balance it!

The fee of Nest Wealth is flat based on your account’s size, with a price of $20 per month to $60 per month.

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6. ModernAdvisor

It is one of the most competitive Robo-advisors in Canada in the matter of fees. You can open an RRSP, LIRA, TFSA, RRIF, and non-registered accounts both personal and joint via ModernAdvisor.

It allows automatic rebalancing, to take the worries off your head and helps create low-ETF portfolios too. You can also invest in a socially responsible manner, as per your choice. The minimum investment amount is $1,000.

The fees of ModernAdvisor is as follows:

  • $0 to $10,000: Free
  • $10,000 to $100,000: 0.5%
  • $100,000 to $500,00: 0.4%
  • $500,000 and above: 0.35%

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7. BMO Smartfolio

BMO, which is also one of the bank giants in Canada, has opened this Robo-advisor, BMO Smartfolio. This bank has been around for over 200 years. You can open investment accounts for $1,000. You can open RRSP, TFSA, RESP, RRIF, joint accounts, and non-registered investment accounts through it.

The fee of BMO Smartline is a bit more as compared to other Robo-advisors but more moderate as compared to another mutual fund offering of the bank:

  • Initial $10,000: 0.7% annually.
  • $150,000: 0.6% annually
  • $250,000: 0.5% annually.
  • More than $500,000: 0.4% annually.

What Process Do Robo-advisors Use to Invest for You?

The passive investing strategies of Robo advisors help to maximize the returns for your investment portfolio. This utilizes low-cost ETFs. The best Robo-advisors in Canada take into account, the risk tolerance, investing time horizon, objectives via investment, and other such needs to create an impeccable plan for you. Hence, minimizing the risk and maximizing the profits. When you consolidate the low fee and other factors, you will realize why investors prefer it over the traditional method.

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Choose from the Best Robo-advisors in Canada

The basic operational method for all Robo-advisors is the same. Let’s take a look at some of the elements that you should consider to find the best Robo-advisor in Canada for yourself.

Invest

1. Investment Fees

The Robo-advisor fee is divided into 2 categories:

  • The management fee that you need to pay for the management of your portfolio.
  • ETF MER (Management Expense Ratio) is the built-in service for portfolio management and it is transferred to the wealth management company.

2. Promo Offers are Good Investment Tools

The minimum investment amount for Robo-advisors is very low. Many allow a low amount while you can also find Robo-advisors with a $0 minimum amount. 

Some of them are:

  • CI Direct Investing charges a $1,000 minimum investment. You get to invest $10,000 free of charge in the first year.
  • Wealthsimple: There is no limitation on the account balance. You will be given a $75 bonus if you start with $500 or more.
  • Justwealth allows a minimum investment of $5,000. You also get a $50 bonus for opening an account.

3. Average MER

You will have to pay the direct fees to ETF companies including the annual management fee. Every Robo-advisor charges a fee. They are very low and might change from time to time.

Here are the average ETF costs for different Robo-advisors.

  • Wealthsimple: 0.20%
  • JustWealth: 0.25%
  • CI Direct Investing: 0.26%- 0.32%.

When you have the self-directed account that is provided by the discount brokerage, you will still have to pay the fee. However, these will not have a significant impact on your returns.

Read: TFSA vs RRSP: How To Choose Between The Two?

4. Accounts and Investment Flexibility

You can open accounts like TFSA, RRSP, RRIF, LIRA, and other non-registered investment accounts through Robo-advisors.

  1. You can open a cash account through Wealthsimple. It also has a roundup feature that allows you to invest your spare change in a low-cost ETF. 
  2. CI Direct Investing helps with insurance, tax optimization, and estate planning.
  3. Justwealth offers an Education target date RESP portfolio, especially for your kids.

You can invest in many low-cost ETFs via Robo-advisors to diversify your portfolio. Your portfolio will fluctuate between conservative, growth, to balanced.

5. Additional Features

Some additional features of Robo-advisors are as follows;

    • Financial planning: You can get free financial advice from Robo advisors. However, some fees might apply for selected Robo-advisors.
    • Ethical Investing: CI Direct Investing and Wealthsimple allow you to invest in eco-friendly portfolios. However, remember, you will have to pay an additional fee for this.
  • Hybrid Investing: Investors often prefer a blend of automation and customization. ModernAdvisor and CI Direct Investing provide hybrid options that allow both active and passive investing stances. An additional fee is applied to this service too.
  • Applications: Technology is the rage among millennials and Gen Z. Wealthsimple’s application is one of the best and most rated on the app store of Apple.
  • Referral programs: Referral programs provide additional benefits that you can leverage to earn more. For example, Welathsimple allows a free $10,000 investment for every referred friend.
  • Savings interest rate: You will find a high savings interest rate on Wealthsimple’s cash account. Hence, even your cash will earn money when it is not in the financial markets. 

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The Bottom Line

So, these are the best Robo advisors in Canada that you can use. They give you a great opportunity to DIY investment and learn along the process. It is advisable that you also do your own research and look for investment options and explore different Robo advisors. You should start investing your money from an early age to reap good benefits in the long run. I hope this article has helped you get answers. Thank you for reading!


Devanshee Dave

Devanshee is a staff writer at YourFirst.ca. She is a finance enthusiast and has completed her Master’s degree in Mass Communication & Journalism. She has worked as a journalist in a local business newspaper, multiple start-ups as well as finance and economy-related online media houses.

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