Skip to main content

Banks are doing it, and so are big names in the insurance business.

Bank of Montreal, HSBC Canada and Royal Bank of Canada are in the robo-adviser business, and National Bank of Canada is an investor in Nest Wealth. Companies in the insurance business that have invested in robos include Power Financial, through a stake in Wealthsimple, and Industrial Alliance Insurance & Financial Services Inc., which has Invisor as a subsidiary.

These financial giants are investing in robo-advisers because they recognize there’s a need for a low-cost advisory service that helps investors build and manage their portfolios online. Investing’s a multi-channel universe and robo-advisers are as much a legitimate part of it as human advisers and financial planners, online brokers and bank branches selling mutual funds over the counter.

The Globe and Mail robo-adviser guide is designed to show what’s available in the robo-world – the firms, the fees, the investment approaches and more. This year’s roster of robos include Mylo and Planswell, which are financial apps that offer a robo-adviser as part of their overall services. RBC InvestEase was invited to participate, but declined because it had not yet launched fully across Canada.

A robo-adviser is an online service that helps you develop a personalized portfolio mix of stocks and bonds and then builds it for you with low-cost exchange-traded funds. Robos charge a fee to build and maintain your portfolio, but it’s much less than you’d pay if you owned mutual funds or had a human adviser managing your portfolio.

A few common features of the robos in the Globe guide:

-All are licensed as portfolio managers, except HSBC Wealth Compass; portfolio managers are a category of investment advice provider who work to a fiduciary standard, which means they must put client interests first)

-All offer paperless account opening with e-signature, so there’s no need to fill out paper forms and send them in

-Almost all offer pre-set ETF portfolios that match your investing profile; the exception is Nest Wealth, which provides unique portfolios for each client

-All rebalance your portfolio periodically – selling hot ETFs and buying cold ones – to bring you back to your target mix of stocks and bonds

-Commissions for buying and selling ETFs are included in the advice fee, except at Nest Wealth (you pay for the first 10 trades per year at $9.99 a pop) and Smart Money Capital Management (1 cent per share with a $4 minimum per trade).

-Assets are generally held at held by third-party or related investment dealers that are members of the Canada Investor Protection Fund, which protects account assets for up to $1-million against dealer insolvency.

-You can interact with your robo firm via its website, by phone and, often, through some combination of secure e-mail, live online chat and skype; you may also be able to drop into a robo-adviser’s office or associated bank or credit union branches

Click here if you’d like to download an Excel version of the guide

Data management for the robo-adviser guide was provided by Audrey Carleton

Your Globe

Build your personal news feed

Follow the author of this article:

Follow topics related to this article:

Check Following for new articles

Interact with The Globe