Robo-advisers build portfolios that are attuned to the client’s risk tolerance, goals and personal profile.Getty Images/iStockphoto
Canada's robo-adviser space is getting more crowded, as Justwealth Financial Inc. will announce Tuesday its online site is open for business.
Justwealth.com is the 13th online portfolio manager to join the Canadian market. Earlier this year, Bank of Montreal's brokerage division, BMO Nesbitt Burns, launched its online offering, BMO Smartfolio. Meanwhile, one of Canada's largest online providers, Wealthsimple, acquired discount brokerage Shareowner Investments to double its size.
"Despite the growing competition, we come from the world of portfolio construction and I believe that allows us to stand out a bit from our competitors in the market," says Andrew Kirkland, president and co-founder of Justwealth. "We aren't coming with the technology background but we have approached this from the investment outlook, which has allowed us to provide investors with more than just a basic offering."
Both Mr. Kirkland and James Gauthier, co-founder and chief investment officer, bring decades of investment experience from the asset management world. Most recently, Mr. Kirkland was a vice-president at Invesco Canada while Mr. Gauthier spent the last 20 years working among the asset management divisions at three of the major banks.
The combined experience allows the firm to offer clients access to a wider range of portfolios than most, says Mr. Kirkland. The firm, which launched nationally at the beginning of April, offers 61 different portfolio options – including portfolios in growth, income, capital preservation and taxable and non-taxable accounts. The platform also includes a group of registered education savings plans' "target date" portfolios that mature on a yearly basis.
"Most target date funds are bucketed into five year increments and that doesn't always work well depending on your child's date of enrolment so we came up with something that was a bit more precise, " says Mr. Gauthier. "Having a suite of portfolios with a maturity date available for every single year allows investors to set up a plan that matures based on their child's expected enrolment date."
The portfolios consist exclusively of exchange-traded funds and can include a combination of 29 different ETFs from seven providers, including Blackrock, BMO Asset Management, Vanguard and Purpose Investments.
The minimum account size for clients to invest is $5,000 and Justwealth's fees remain competitive - 0.50 per cent for accounts under $500,000 and 0.40 per cent for those above $500,000. Accounts less than $25,000 are subject to a minimum fee of $10 per month. High-net-worth clients – those with over $1-million in an account– will be able to build a customized ETF portfolio.
Similar to other Canadian robo-adviser platforms, investors are asked to fill out an online risk questionnaire. They are then required to discuss their risk profile with a 'human' portfolio manager via telephone or e-mail within 24 hours.
(An earlier version of this story incorrectly stated account thresholds that would trigger the two different fee brackets)