A guide to the best robo-advisors in Canada for 2021


Investment approach: Wealthsimple puts your money into an array popular of ETFs from iShares, Vanguard, WisdomTree, VanEck, BMO and Powershares. It has three main portfolios—conservative, balanced and growth—but it also has a socially responsible investment portfolio that focuses on clean tech and low carbon, and a Halal portfolio, among other things. Investors can’t pick their portfolio—they get put into one after answering a series of risk tolerance-related questions upon signup. Wealthsimple has launched a number of new account options over the years, including RRSP, TFSA, RESP, RRIF, LIRA and, more recently, an investment account for business owners. 

This is the best robo advisor for… Those investors who like simplicity. If you have more than $100,000 in assets to invest, you’ll get access to Wealthsimple Black, which comes with a reduced fee, a financial planning session with a human advisor and access to airport lounges around the world. Deposit $500,000 to access the Wealthsimple Generation service tier, which includes in-depth financial planning with human advisors and the ability to create custom portfolios.

Fees:

  • First $99,999 – 0.5%
  • Above $100,000 – 0.4%
  • Fees waived for the first year on $10,000 invested
  • Minimum account size: None

Get more information about Wealthsimple Invest*


What is a robo advisor?

When the words robo advisor first entered the investing lexicon, it referred to a company that offered a robo-advisor tool and the platform itself. With many traditional financial institutions providing robo options today, the term refers to the technology involved. Now, essentially, a robo advisor is a cloud-based technology platform that, in many cases, invests on behalf of a user. 

There are other ways to invest online, of course. For example, with discount brokerages, you put money into an account and then you have to divvy up those funds among securities on your own. Robo advisors, on the other hand, automatically split up the assets in your robo account (again, it could be an RRSP, RESP, TFSA or others) into various ETFs based on your risk tolerance and goals.( An ETF is a basket of securities that’s similar to a mutual fund but isn’t actively managed; often, it’s set up to track a specific market index, such as the S&P 500 Index. ETFs are also different from mutual funds in that they can be traded on the market, like an individual stock or bond.)

It’s the ease of use that’s made robo advisors so popular. Most work in a similar way: You fill out a questionnaire to determine your tolerance levels, you then connect your bank account to the software and enter the amount you want to invest. The robo advisor will then put your money into its funds and continually rebalance your dollars to keep your asset mix where it should be.

Should I use a robo advisor?

There used to be a perception that robo advisors were for newbie investors or those without a lot of money, but that couldn’t be further from the truth now. An increasing number of high-net-worth investors—those who don’t want to pick securities on their own—are seeing the value in using this kind of digital investing platform. In fact, many robos are now catering to this investor set, with some offering more sophisticated tax-loss harvesting, as well as accounts for incorporated professionals. 



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