Robo-advisor Comparison Chart
The cost of a robo-advisor depends upon which firm you go with and what services you use. Below is a comparison table of some of Canada’s more prominent robo-advisors. The table below lists robo-advisors and their account minimum, ETF management fees, and annual management fees
Best Robo-advisors in Canada for 2023
Robo-advisors relieve individuals from paying a premium for a simple manoeuvre and instead make their broker work harder for their investment dollar. Until recently, you needed to get your advisor to switch around your investments to keep the portfolio within your target risk-reward range, but with the invention of robo-advisors, anyone can start investing in ETFs with limited investment knowledge and no hassle.
Without the need for pricey investment pros to rebalance your portfolio, you pay less to keep your investments in the proper order and those advisors can spend their time doing something to really justify their fees.
Below, we provide a deep dive on some of the best robo-advisors in Canada so that you can compare the robo-advisor that best suits your investing needs.
- No minimum initial investment
- Roundup, Overflow & more
- Socially responsible & halal investing options
Best for investors who value low fees and a super sleek user interface.
Michael Katchen founded Wealthsimple in Canada in 2014, and the company has been making waves in the investment industry ever since. Wealthsimple currently has over $5 billion under management and is one of the best robo-advisors in Canada. Wealthsimple offers a variety of tools on top of their classic robo-advisor portfolios to help you save more money.
Wealthsimple Fact Sheet (+/-)
Wealthsimple Pros & Cons (+/-)
Questwealth Portfolio (previously Questrade IQ)
- Average ETF MER of 0.19%
- Will pay your transfer out fees
- Link family and friend accounts for lower fees
Best for investors who value the absolute lowest fees
Questwealth Portfolios is the robo advisor arm of the online discount brokerage Questrade, a company that has been providing low cost online investing solutions to Canadians since 1999. Questwealth Portfolios is Canada’s fastest-growing robo-advisor with over 30,000 new account sign-ups last year.
Questwealth Fact Sheet (+/-)
Questwealth Pros & Cons (+/-)
Qtrade Guided Portfolios
- Average ETF MER of less than 0.15%
- Fully automated investment experience and expert customer service
- Personalized portfolios with Responsible Investing (RI) in mind.
Best for investors looking for easy, user-friendly automated investing
Qtrade Guided Portfolios is a part of Aviso Wealth, a national financial services company owned by the Credit Union Centrals, CUMIS and Desjardins. Their group of companies includes Qtrade Direct Investing, one of Canada’s top-ranked online brokerages, and NEI Investments, a Canadian leader in Responsible Investment funds and portfolios.
Qtrade Guided Portfolios Fact Sheet (+/-)
Qtrade Guided Portfolios Pros & Cons (+/-)
For safer and conservative investment options, also consider:
- Get up to $2,000 cash and $4.99 stock and ETF commission pricing Or up to 500 free stock and ETF trades*
- Get access to Scotiabank's in-depth research capabilities
- Pay bills, right from your online brokerage account
- Manage and transfer funds between your Scotia iTRADE online brokerage account and Scotiabank bank accounts.
- Set-up and make future dated transactions
- Access easy fund transfers (CAD and USD) between any bank account in Canada and Scotia iTRADE.
Best for: Investors who love flexibility
Started after Scotiabank's purchase of E*Trade Canada in 2008, Scotia iTrade provides new and seasoned investors with a variety of investment accounts, products, and platforms. While their trading commissions are on the higher-end, they also have the distinction of being one of the only online brokers in Canada to offer commission-free ETFs.
Scotia iTrade Fact Sheet (+/-)
Scotia iTrade Pros and Cons (+/-)
CI Direct Investing
- Flexibility to choose either passive ETF or actively managed portfolios
- Get assigned a non-commission, certified financial planner
Additional insurance and tax optimization planning optional
Will pay your transfer out fees
Originally founded in 2014 as WealthBar, CI Direct Investing was one of the original robo-advisors in Canada. CI Direct Investing recently became part of the CI Financial Group of companies, a Canadian owned global asset manager with $194 billion in total assets as of September 30, 2020.
CI Direct Investing Fact Sheet (+/-)
CI Direct Investing Pros & Cons (+/-)
- Over 70 different portfolio options including target-date portfolios for RESPs
- Automatic rebalancing
- USD investment accounts available
- Get assigned a Personal Portfolio Manager
Best for anyone with unique investment requirements. You can get up to $500 sign-up bonus when you open a Justwealth account.
Co-founded by Andrew Kirkland and James Gauthier and headquartered in Toronto, Justwealth makes it their business to provide fair and unbiased investment advice to Canadians. To that end, Justwealth is a registered portfolio manager across all ten provinces, which means they have a fiduciary duty to put your interests first. Their custodian is Virtual Brokers, which is a part of BBS Securities in Canada.
Justwealth Fact Sheet (+/-)
Justwealth Pros & Cons (+/-)
Smartfolio was launched to the public in 2016, and is the first robo advisor launched by one of Canada’s big banks. BMO Smartfolio operates under BMO Nesbitt Burns and is backed by the strong reputation associated with BMO products.
BMO Smartfolio Fact Sheet (+/-)
BMO Smartfolio Pros & Cons (+/-)
RBC InvestEase was launched to all RBC Royal Bank customers in late 2018, making it one of the newest robo advisors in Canada. The custodian of RBC InvestEase is RBC Direct Investing, which is a member of the Canadian Investors Protection Fund (CIPF), so your money is safe with this robo advisor. RBC InvestEase uses the classic robo advising model of designing your portfolio using exchange traded funds (ETFs), in this case, RBC iShares (which are the result of a partnership between RBC and Blackrock).
RBC InvestEase Fact Sheet (+/-)
RBC InvestEase Pros & Cons (+/-)
Modern Advisor was founded in 2013 and is one of the oldest robo advisors in Canada. When you open an account with Modern Advisor, your money is held by Credential Qtrade Securities Inc. That name may not sound familiar, but this company safeguards over $20 billion for financial institutions across the country and is a member of CIPF, so your money is protected.
Modern Advisor Fact Sheet (+/-)
Modern Advisor Pros & Cons (+/-)
Invisor Fact Sheet (+/-)
Responsive Capital Management
Responsive Capital Management Fact Sheet (+/-)
Smart Money Capital Management
Smart Money Capital Management Fact Sheet (+/-)
What’s a robo-advisor?
Are there any robots in robo-advisor?
Should I consult a financial advisor?
Why choose a robo-advisor?
What is MER?
What are robo-advisor fees?
Who should use robo-advisors?
Are robo-advisors insured?
Can't I just buy ETFs instead?
Robo advisors versus mutual funds
Mutual funds have long been a favourite investment of Canadians - you may even own some yourself. According to The Investment Fund Institute of Canada (IFIC), Canadians have over $1.71-trillion invested in more than 4,000 mutual funds, managed by 140 different firms.
When you invest in a mutual fund, you’re pooling your money with others to buy a portfolio of investments that are taken care of by a management company. Rather than doing the work of picking investments yourself, you simply buy into the fund that is managed on your behalf. The fund manager buys and sells investments according to the fund’s ethos while you relax.
This may sound a lot like the value proposition of robo-advisors; your money is invested on your behalf and someone else takes care of the details. All you have to pick is which funds you want to invest in. The problem with this is that all mutual funds are not created equal. They all have different strategies, different asset mixes and different fees. It’s very unlikely that your investment needs will be met by a single mutual fund.
According to the WallStreet Journal, between 71% and 93% of U.S. stock mutual funds either closed or failed to beat their closest index funds over a ten year period.
Human financial advisors also take on a big role in helping Canadians navigate the world of mutual funds. By understanding your needs, they can recommend a mix of investments including mutual funds that will, hopefully, help you meet your financial goals. However, even the best financial advisors aren’t likely to know the details of literally thousands of different mutual fund products and rarely make the right moves to beat the stock market in the long term.
A key difference with robo-advisors is that they skip mutual funds and instead invest your money in a number of different ETFs. Rather than being actively managed by people, ETFs cover an entire segment of the market. For example, the Vanguard Total Stock Market ETF is invested in “approximately 100% of the investable U.S. stock market” The fund includes shares of practically every stock and holds on to them whether they’re going up or down. This takes advantage of an investing strategy that acknowledges that people who invest in the entire market have typically seen better returns than those who pick and choose their stocks.
Like a human financial advisor, the robo advisor’s job is to select and invest in ETFs on your behalf. Unlike a human financial advisor, who may review your portfolio as little as once a year, the robo-advisor continues to monitor your ETFs, buying and selling them automatically as needed to keep your portfolio balanced according to your risk tolerance.
Robo advisors versus human advisors
Handing your investments over to a “robot” may sound scary, but it offers several benefits over using a human advisor.
When it comes to costs, robo-advisors are much more affordable than humans. Traditional advisors make their money by selling you actively managed stocks and mutual fund investments that pay them a commission on the money you earn. These fees can add up and take a big bite out of your returns over time. The logic to this is that it’s in your advisors best interest to make you as much money as possible; the richer you get, the richer they get.
Robo advisors skip this expensive investment approach and focus primarily on exchange-traded funds (ETFs) that cost very little to manage. Rather than charging a commission on your earnings, robo advisors instead charge a small management fee based on the value of your portfolio. Since the overhead costs are much lower and investments are more efficient, robo-advisors can be very profitable while charging far lower fees, and a result, let you pocket higher returns.
When it comes to portfolio performance, the investment methodology behind robo-advisors (of passively managing ETFs) has also proven to outperform human advisors.
The theory of using human advisors goes as follows: people who’ve accumulated years of experience in the financial industry are equipped to strategically pick the right investments that will outperform and make you richer. The problem is, in reality, human advisors have a particularly poor track record of outperforming the market overall. In 2012, an experiment from the Observer Newspaper found that a cat (yes, a cat) actually beat a team of expert money managers when it came to picking stocks. In 2008, Warren Buffet took a $1 million wager that stashing money away in an index fund would outperform a team of expert hedge fund investors over a period of ten years. And, he won.
Human advisors (even experts in their field) are susceptible to making very human mistakes, and tend to underestimate the randomness involved in the stock market
Robo advisors get around this by using a well-diversified portfolio of ETFs to invest in entire markets, regardless of how the individual stocks or companies perform. The goal of robo advisors is to match the market, and while that may sound underwhelming at first, this methodology beats most human advisors, costs less in fees, and can earn lucrative returns of 10% annually over the long term (if past stock market performance is an indicator).
Great experience, super convenient
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Steve S. | Ottawa, ON
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