Compare Robo-Advisor Fees in Canada (2021)

Photo of author

by Enoch Omololu

Updated

Advertiser Disclosure

One major reason why robo-advisors have become popular in Canada is the lower management fees they charge compared to what traditional wealth managers and financial advisors charge.

Robo-advisors simplify the investment process using low-cost ETFs. Important parts of the investment puzzle-like diversification, rebalancing, and dividend re-investing are all automated so that everyday investors do not need to get their hands dirty.

And, these conveniences (including free financial planning and investing advice), are made available at a low fee that could mean significantly improved portfolio returns over time.

Investment fees cut into the real gains that you realize in your account at the end of each year. Given the reality that active fund management, more often than not, underperforms passively managed index funds that track the market, it makes sense to limit the fees you pay and to keep things simple.

This post summarizes the investment fees (management fees, ETF fees, and trading fees) that you pay to each of Canada’s major robo-advisors.

For more details on their account offerings, investment management approach, portfolio returns, ETFs used, and more, check out my robo-advisors comparison post and/or read my individual robo-advisor reviews.

Robo-Advisor Fees in Canada

FeaturesWealthsimpleCI Direct InvestingQuestwealthJustwealth
Management Fee<$100K: 0.50%;
>$100K: 0.40%
$1K-$150K: 0.60%;
$150K-$500K: 0.40%;
> $500K: 0.35%
$1K-$100K: 0.25%;
>$100K: 0.20%
< $500K: 0.50%;
>$500K: 0.40%
ETF Fees (MER)Avg. of 0.20%0.19% to 0.26%0.17% to 0.22%Avg. of 0.25%
Other Fees20 basis pts. per USD transaction.100 basis pts. fee per USD transaction.
Account Minimum$1$1,000$1,000$5,000
Investment MethodologyPassive (Modern Portfolio Theory)Passive & Active (Hybrid)ActivePassive
Other FeaturesGet a $75 cash bonus when you open and fund an account with at least $500;
free online brokerage service, Roundup feature to invest spare change, VIP perks for account >$100K, SRI & Halal portfolios.
Actively managed portfolios available.Invest up to $10K free for 1st year. SRIs available; Actively managed portfolios.Education Target Date RESP portfolios; Get $50 free on new accounts when you invest at least $5000.
ReviewsRead ReviewRead ReviewRead ReviewRead Review

The majority of robo-advisors levy a management fee that is a percentage of assets under management (AUM). However, there are a few of them who have introduced fixed price points that may be cheaper depending on how much you invest.

1. Wealthsimple

Overview: Wealthsimple is Canada’s most popular robo-advisor with hundreds of thousands of clients and over $8.4 billion AUM. It operates in Canada, the United States, and the United Kingdom.

Wealthsimple Fees: Accounts with assets less than $100,000 pay a 0.50% annual management fee. This fee is reduced to 0.40% when your portfolio exceeds $100K.

In addition, ETF Management Expense Ratio (MER) fees of approximately 0.20% are indirectly charged to your portfolio by managers of the underlying ETFs. ETF MER fees apply even if you buy them directly yourself using an online brokerage account.

There is a 20 basis point fee on USD currency conversions when U.S. securities are traded in your account.

Highlights: Wealthsimple offers socially responsible investing (SRI) and Halal portfolios for those who desire them. Clients have access to a Roundup feature that automatically invests spare change and you can use their free brokerage platform (Wealthsimple Trade) to buy and sell stocks and ETFs for free. They also have a high-interest savings account.

Additional benefits accrue to accounts with assets over $100,000 including tax-loss harvesting and a 50% discount off a Medcan comprehensive health plan. The minimum account balance is $1.

Bonus: Get a $75 Cash Bonus with Wealthsimple.

2. Questwealth

Overview: Questwealth Portfolios is owned by the popular wealth management company, Questrade, which manages over $8 billion in AUM. Questwealth was formerly referred to as Portfolio IQ.

Questwealth Fees: Questwealth has arguably the lowest management fees for a robo-advisor in Canada. You can expect to pay:

  • $1,000 – $99,999: 0.25%
  • $100,000 or more: 0.20%

Regular built-in ETF cost an additional 0.17% to 0.22%. When ETFs are traded in US dollars within your account, a 100 basis points fee applies (somewhat high and can add up to become significant depending on how many USD transactions occur in your account).

The minimum account size is $1,000.

Highlights: Questwealth diverges away from the traditional robo-advisor investment strategy in that it uses an active management approach, similar to traditional mutual funds. It also offers socially responsible investment portfolios which may be slightly more expensive.

Our readers can invest their first $10,000 for free with Questwealth for one year.

Invest with Questwealth.

3. Justwealth

Overview: Justwealth is a popular digital wealth manager in Canada that was founded in 2016.

Juswealth Fees: It charges a low annual management fee as follows:

  • First $500,000: 0.50%
  • > $500,000: 0.40%

There are a minimum $4.99/month fee and a minimum account size of $5,000 except for RESP accounts which have a minimum monthly fee of $2.50.

The built-in ETF fee that goes to the ETF providers is 0.25% on average.

Highlights: Justwealth is the only robo-advisor in Canada offering Education target Date Portfolios. This RESP portfolio makes it easier for you to save and plan towards your child’s post-secondary education.

Invest with Justwealth.

4. CI Direct Investing

Overview: CI Direct Investing was founded in 2013 and is a registered portfolio manager in all the provinces and territories in Canada. It has over $275 million in assets under management.

CI Direct Investing Fees: Its sliding scale pricing model is as follows:

  • $1,000 – $150,000: 0.60%
  • $150,000 – $500,000: 0.40%
  • > $500,000: 0.35%

In addition to the management fee, the built-in ETF MER fees across their portfolios range from 0.19% to 0.26%.

Highlights: CI Direct Investing offers socially responsible investing (Cleantech) and some separate private investment portfolios that are actively managed.

5. Nest Wealth

Overview: Nest Wealth was launched in 2014. Similar to Wealthsimple and CI Direct Investing, it invests your money using low-cost ETFs.

Nest Wealth Fees: It charges fixed monthly fees as follows:

  • < $75,000: $20 per month
  • $75,000 – $150,000: $40 per month
  • > $150,000: $80 per month

There is a trading fee of up to a maximum of $100 per year as well as built-in ETF MER fees.

Highlights: Nest Wealth offers Group RRSPs for employers (Nest Wealth at Work), a digital wealth management platform for advisors (Nest Wealth Plus), and firms (Nest Wealth Pro).

Read our Nest Wealth review.

6. ModernAdvisor

Overview: ModernAdvisor is a Canadian robo-advisor founded in 2013. 

ModernAdvisor Fees

  • $0 – $10,000: Free
  • $10,000 – $100,000: 0.50%
  • $100,000 – $500,000: 0.40%
  • > $500,000: 0.35%

The average built-in ETF MER is 0.25% per year.

Highlights: ModernAdvisor offers a hybrid investment approach that combines passive and active strategies. They also offer a free 30-day demo account that you can use to test-drive their platform.

Read our ModernAdvisor Review.

7. BMO SmartFolio

Overview: BMO SmartFolio is a robo-advisor owned by a bank – Bank of Montreal.

BMO SmartFolio Fees: these vary depending on your account size:

  • First $100,000: 0.70%
  • Next $150,000: 0.60%
  • Next $250,000: 0.50%
  • Above $500,000: 0.40%

MER feed of ETFs inside your portfolio range from 0.20% to 0.35%. Additionally, a spread of up to 1.5% may be charged on foreign currency transactions.

Read this BMO SmartFolio review for more details.

Conclusion on Robo-Advisor Fees

Fees are only a part of the factors you should consider when choosing a robo-advisor. Other factors you should consider are their investment strategies, performance over time, access to free financial advice, and more.

Note that past performance is not always an indicator of the future returns you may realize in your portfolio.

Related Posts

Compare Robo-Advisor Fees in Canada (2021)

Best Investment Offers This month

Canada's best online investment management platform.

Low management fee of 0.40% to 0.50% compared to mutual funds (up to 2%).

Enjoy automatic rebalancing, dividend reinvesting, and free financial advice.

Invest on autopilot and grow your net worth.

Offers self-directed and professionally managed portfolios.

No trading commissions on ETF purchases.

Low fees to buy stocks starting at $4.95 per transaction.

Free transfers from other banks and $0 inactivity fees.

1.25% savings interest rates.

Earn tax-free interest on every dollar and up to 125x more interest than other banks.

No monthly account fees.

Free withdrawals and CDIC insurance.

Retirement 101 eBook - 3D

Author

Photo of author
Enoch Omololu

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. His writing has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, Financial Post, Toronto Star, Credit Canada, MSN Money, National Post, CIBC, and many other personal finance publications.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

22 Shares
Share
Pin
Tweet
WhatsApp
Reddit