GLOBE INVESTOR
2017 ROBO-ADVISER GUIDE
Find out which firms deserve your business
By
Rob Carrick
PUBLISHED Friday, October 27, 2017
It’s time to stop treating robo-advisers as a novelty and start considering them as a smart option for people seeking help in building an investment portfolio.
Robo-advisers fill the middle ground between the rock bottom costs of do-it-yourself investing and the premium cost of having an adviser at an investment firm. Robos serve clients online mainly (but not exclusively) – hence the catchy name.
Robos are still a comparatively new category for investors, but some have been around for as many as three to four years. Among the players in this line of business are big names like Bank of Montreal, through BMO SmartFolio; and Power Financial Corp., through an interest in Wealthsimple.
With more than a dozen players in total, there are many variations in portfolio design, fees and features. The Globe and Mail Robo-adviser Guide is designed to help investors easily compare firms to find the most suitable choice.
Launch date
Helps you distinguish between the old guard and new entrants such as VirtualWealth and Virtual Brokers Wealth Management.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Ownership
Many robo-advisers are independent firms with no ties to industry giants.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Provinces and territories served
A growing number of firms are doing business across Canada, but some are available in just a few provinces.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Minimum account size
If you’re just starting out as an investor, mind the widely varying minimum upfront investment requirements. Only a few firms will build portfolios for people with less than $2,000.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Does the firm have a conversation with all new clients?
Some firms have a policy of only opening accounts after a conversation with the client, while others will allow a fully automated account set-up. If you’re busy and comfortable with technology and investing, you may prefer the latter. It’s standard to provide human contact if that’s what you prefer when opening an account.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Investment approach
Most robo-advisers decide on a personalized mix of stocks and bonds for you and then fill your portfolio with low-cost, index-tracking exchange-traded funds, which are considered passive investments. A passive-active hybrid or active approach suggests that actively managed ETFs or mutual funds (run by a portfolio manager who chooses securities) are also used, or that the ETF holdings in client portfolios may be adjusted according to financial market conditions or to capitalize on markets perceived as undervalued. A strictly passive portfolio would leave your portfolio alone, aside from periodic rebalancing (selling holdings that have risen in value and buying more of things that have fallen in value).
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Percentage of accounts built with ETFs and other securities
ETFs have much lower fees than mutual funds and pooled funds.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
ETF companies used to build client portfolios
BlackRock’s iShares division, BMO and Vanguard are well-established, low-fee ETF providers.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Average number of funds in client portfolios
You can have a diversified portfolio with as few as four core-market ETFs, which tend to have the lowest fees.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Asset-weighted average management expense ratio for the ETF portfolios built for clients
Lower fees mean more returns left over for investors. Asset-weighted means the funds with the biggest footprint in client accounts have the most influence on the average fee calculation. Combine ETF costs with the advice fee (see below) to get an overall cost of dealing with a robo-adviser.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Advice fees
Robo-advisers are generally far cheaper than traditional investment advisers, but their fees do vary for both small and large accounts. The fee is typically withdrawn monthly or quarterly from client accounts.
Compare advice percentage costs
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Compare advice dollar costs
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Are trading commissions included in the advice fee? If not, how much are they?
Most firms include the brokerage commissions for buying and selling ETFs in their advice fees.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Business relationships robo-advisers have with ETF companies
A few firms have ties to ETF companies and may use their products in portfolios. This is useful background for understanding what’s in your portfolio.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Is there a responsible investing (RI) option?
Millennials in particular seem to be increasingly interested in investments that focus on companies with a good social, environmental and governance record.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
What returns should you expect over the long term after fees?
Very rough guidance here on how robo-advisers are managing investor expectations. Projected returns are annualized and vary by portfolio type. These are total returns – price changes plus dividends and bond interest. Some firms declined to answer.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Ways clients can interact with a firm, besides the website
Most firms are very flexible – phone, Skype, online chat, e-mail – and some even offer in-person service.
Compare firms
BMO SmartFoilio
Yes: All provinces
Invisor
Yes: Ontario, Manitoba, Saskatchewan, Alberta, B.C.
Justwealth Financial
Yes: All provinces
ModernAdvisor
Yes: All provinces and NWT
Nest Wealth
Yes: PEI, Ontario, Manitoba, Alberta, B.C.
Portfolio IQ
Yes: All provinces and territories
Responsive Capital Mgt
Yes: Ontario, Alberta, BC
RoboAdvisors+
Licensed as an investment dealer in Quebec, Ontario, Manitoba, Alberta and B.C.
Smart Money Capital Management
Yes: Alberta, Ontario, Quebec
WealthBar
Yes: all provinces
Wealthsimple
Yes: all provinces and territories
Follow Rob Carrick on twitter
@rcarrick
Data management for the robo-adviser guide was provided by Megan Marrelli.
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