WealthBar (now CI Direct Investing) was the first full-service robo-advisor to set-up shop in Canada. While the online portfolio management industry is booming and has seen a number of fin-tech entrants in the last few years, CI Direct Investing can boast about its pioneering role in bringing low-fee wealth management to Canadians.
It used to be that the average investor could not access professional investment advice and certain financial asset classes if their net worth was not in the several hundreds of thousands to millions of dollars. And, although mutual funds have been easily accessible, they come with a high price tag (Management Expense Ratio – MER).
Given these alternatives, if you did not have the confidence or know-how to DIY your investing through the use of a self-directed brokerage account, you were usually stuck with high-fee low-performing mutual funds.
What robo-advisors do is to simplify your investing and make wealth-building accessible to everyone irrespective of their financial status. Like the folks at CI Direct Investing often like to point out, they have made “Wall Street investing (possible) for Main Street Canadians.”
This WealthBar review covers the investment options they offer everyday Canadians, unlimited financial advice, fees, portfolio types, performance, and more.
WealthBar Financial Services (now CI Direct Investing) is one of Canada’s foremost online portfolio management advisors. It was founded in 2013 by two veterans of the financial and technology industry, Tea and Chris Nicola. Today, the team is bigger and comprised of several financial gurus with designations including CFA, CFP, CIM, and more.
At WealthBar, investors receive financial advice and are provided with custom low-cost ETF portfolios that meet their investing needs and are maintenance-free.
In May 2020, CI Financial Corp. (CI) announced it had acquired a 100% stake in WealthBar. CI manages approximately C$166 billion in assets.
WealthBar formally rebranded as CI Direct Investing on August 5, 2020. CI Direct Investing is part of CI Financial, one of the country’s largest investment companies. Under this new brand, clients continue to have access to professionally managed portfolios and financial advice at their fingertips.
WealthBar (CI Direct Investing) Accounts
CI Direct Investing (formerly WealthBar) offers Canadians access to the following investment accounts:
- RRSP – Individual, Spousal, and Group
- Non-registered investment accounts (Individual and Joint)
- Corporate/Business investment accounts
How To Open a WealthBar (Ci Direct Investing) Account
Opening a new account is a breeze and should take no more than 15-20 minutes.
Step 1: Visit WealthBar using this link (for a special offer to invest $10,000 FREE for 1 year).
Step 2: Select the account type you want to open (TFSA, RRSP, RESP…). Answer the few questions they use to determine your risk tolerance, investment objectives, and to provide you with a recommended portfolio. You will also be required to enter your basic personal details.
Step 3: Fund your account so your portfolio manager can invest it on your behalf. You are now on your way to building wealth!
If you are moving your investments from another institution to WealthBar, they will refund any transfer fees you pay (up to $150) if your portfolio size is more than $25,000. The minimum investment amount is $1,000.
Some of the information you should have on hand to speed up your account-opening process include:
- Your social insurance number
- Banking account information
- Employment details
- Investment and debt balances
WealthBar (CI Direct Investing) Portfolios
WealthBar (now CI Direct Investing) offers low-cost portfolios that are designed to fit individual investors. Based on your risk tolerance and investment objectives, your recommended portfolio is one of the following:
- Safety ETF Portfolio
- Conservative ETF Portfolio
- Balanced ETF Portfolio
- Growth ETF Portfolio
- Aggressive ETF Portfolio
Each of these portfolios is comprised of 8-10 individual low-cost ETFs from popular providers like Vanguard, iShares, Horizon, BMO, Purpose, and include:
- BMO Covered Call DJIA Hedged to CAD ETF (ZWA)
- Purpose High-Interest Savings ETF (PSA)
- BMO Equal Weight REITs ETF (ZRE)
- BMO Laddered Preferred Share ETF (ZPR)
- BMO High Yld US Corp Bd Hdgd to CAD ETF (ZHY)
- iShares Core MSCI EAFE IMI ETF (XEF)
- Vanguard Canadian Short-Term Corp Bd ETF (VSC)
- Horizons S&P 500 ETF (HXS)
- Horizons S&P/TSX 60 ETF (HXT)
- Invesco Cleantech ETF (PZD)
Why Choose WealthBar (CI Direct Investing) For Your Investing?
1. Customized Financial Advice: When you open an account, you get a dedicated financial adviser who is available to answer any questions you may have.
2. Diversified Portfolio: Your customized portfolio is built with diversification, risk reduction, and returns maximization in mind.
3. Financial Planning: You can create a financial plan(s) using the financial planning tool available on your dashboard. This tool is very versatile and can show you your current financial situation vs. the various scenarios that can get you to your financial or retirement goals. For example, how much will you need to invest in your RRSP, how long will your savings last in retirement? A licensed financial planner is available to go through the plan with you.
4. Simple Fees: Investing fees can become complicated particularly when you have all kinds of embedded fees or commissions that are not apparent upfront. At WealthBar, the pricing is simple – no commissions are earned on ETFs, and there are no trading fees.
5. Automatic Rebalancing: Your portfolio is automatically rebalanced if it deviates more than 5% from the target allocation.
6. Socially Responsible Investing (SRI): They offer you an opportunity to invest in ways that align with your beliefs and which are beneficial to the environment using the Cleantech portfolio (PowerShares PZD).
7. Free Investment Management: Are you just starting out on your investment journey or have modest funds to invest? WealthBar generally offers to manage your first $5,000 for FREE (or first $10,000 for free for 1 year with this special promo link).
8. Security: Your money is held with an independent custodian (NBIN, BBS, and Credential Securities) who are members of IIROC and CIPF. If these custodians go bankrupt for any reason, your funds are insured up to $1 million per account category.
Other benefits of investing with CI Direct Investing include:
- Estate Planning
- Tax Optimization
- Insurance Needs Analysis
- Investment Assessment
- Corporate Tax Planning
- Mobile-friendly app for tablets and smartphones
- Available to Quebec residents (RESPs)
- Investing options for Canadians living abroad
WealthBar (CI Direct Investing) Fees
Robo-advisors are popular mostly because they help the average investor save on investment fees. While the average annual MER charged by mutual funds is around 2.20%, robo-advisors charge much less for managing your money.
At CI Direct Investing (formerly WealthBar), they have a tiered fee system that ranges from 0.35% to 0.60% of your assets per year. This fee covers all the services you get including portfolio management, trading charges, re-balancing, financial advice, and more.
In addition to the annual management fee (0.35% to 0.60%), you will also pay ETF MER fees that are built-in and paid to the ETF companies directly. This fee ranges from 0.19% to 0.26%. ETF fees normally apply even if you buy the ETF yourself using your online brokerage account.
WealthBar vs. Wealthsimple Fees
WealthBar (CI Direct) and Wealthsimple differ in their pricing structure in that while WealthBar’s fee schedule is multi-tiered, Wealthsimple has two fixed rates: 0.50% for accounts under $100k and 0.40% for portfolios exceeding $100K.
Let’s look at a few scenarios:
Scenario 1: If you have a modest portfolio with $20,000. Your annual fee is:
- WealthBar: $120/year
- Wealthsimple: $100/year
- Typical Bank Mutual Fund: $440/year*
Scenario 2: If you have a modest portfolio with $100,001. Your annual fee is:
- WealthBar: $600/year
- Wealthsimple: $400/year
- Typical Bank Mutual Fund: $2,200/year
Scenario 3: If you have a modest portfolio with $500,000. Your annual fee is:
- WealthBar: $2,300/year
- Wealthsimple: $2,000/year
- Typical Bank Mutual Fund: $11,000/year
*Using an average mutual fund fee of 2.20%
As you can see, both Wealthsimple and WealthBar can literally save you hundreds of thousands of dollars over a lifetime compared to many of the mutual funds sold by your bank.
As your account starts to grow bigger, you save a bit more on management fees with Wealthsimple. However, note that when choosing between robo-advisors, you should be taking more than just fees into consideration.
Is WealthBar (CI Direct Investing) Safe?
When you invest with WealthBar, your funds are protected up to $1,000,000 per account category. This is because your money is held by custodians who are members of the Canadian Investor Protection Fund (CIPF).
On the safety of your personal information, the company uses bank-level encryption to protect your information and funds.
WealthBar (CI Direct Investing) Performance
If you are interested in the performance of CI Direct Investing portfolios, they have a section on their website showing the cumulative performance for a hypothetical $100,000 that has been invested in any of their 5 ETF portfolios, starting from 2014.
For example, for their Growth ETF portfolio as of September 30, 2019:
You are also able to view the portfolio’s allocation by asset class and fund, as well as the average MER of ETFs making up each portfolio.
This is how a $100,000 Growth ETF Portfolio would have fared from August 2014 to September 2019:
Please note that in investing, historical performance does not guarantee future results!
Is WealthBar (CI Direct Investing) For You?
You do not have to be considered “high-net-worth” to invest like one. Robo-advisors like CI Direct Investing simplify the investing process for those who want a simple fix to take their wealth-building efforts to the next level.
If you do not want to pay high mutual fund fees and are not confident to go-it-alone using a self-directed brokerage account, robo-advisors are a great option. They figure out your ideal portfolio, re-balance it for you, provide financial advice… all at a comparatively low annual fee. Investing doesn’t get any easier than this!
WealthBar Review 2020
Ease of Use
WealthBar is Canada’s first robo-advisor, giving investors an opportunity to build wealth using low-fee ETF’s. You can invest your first $15,000 free of charge and start building wealth.