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Best Robo-Advisors in Canada 2024

In Canada, Robo-advisors have come to revolutionize the world of investing with automated portfolios and low fees, making them perfect if you want to take an off-hand approach and get high returns. The best Canadian robo-advisors have various investment choices, low management fees, and competitive Management Expense Ratios (MERs). In this article, we will go over the top robo advisors in Canada, their fee structures, MERs, and how they benefit the investors.

What is the Management Expense Ratio (MER)?

Before we dive into the best robo-advisors, we need to know about the Management Expense Ratio (MER). The MER is the cost of managing the ETFs within your portfolio, which includes administrative fees, marketing, and legal costs.

These are ETFs that most often make up the core of your portfolio for robo advisors and, together, contribute to your overall cost, both in terms of the MER (management expense ratio) and the robo advisors’ cost. Typically, the MER gets taken directly from your investment returns, meaning you can’t see it as a separate charge, but it still affects your net profits.

Wealthsimple: Best for Beginners and Ethical Investing

One of Canada’s most prominent and well-regarded robo advisors is known for its intuitive user interface and noted for its socially responsible investing (SRI) and halal portfolios. For investors who are looking for simplicity and a low barrier to entry, it is ideal.

• Fees: For balances under $100K, Wealthsimple charges 0.5% management fees. For balances over $100K, the management fee is 0.4%. The MER lies in the range of 0.40% to 0.50%.
• Minimum Investment: No minimum requirement.
• Key Features: Wealthsimple has automatic rebalancing, dividend reinvestment, and a Socially Responsible option.
• Unique Selling Point: It is a good choice for socially conscious investors because of its low management fees and commitment to ethical investing.

BMO SmartFolio: Best for Bank-Based Investors

Launched as part of the Bank of Montreal, BMO SmartFolio is a robo-advisory service powered by Canada’s largest financial institution. For those looking for comfort in a known, established bank, it’s a good choice.

• Fees: Management fees begin at 0.70% on the first $100K and gradually decrease to 0.40% for those with portfolios over $500K. The MER is from 0.20% to 0.35%.
• Minimum Investment: $1,000.
• Key Features: BMO SmartFolio lets you invest in various ETFs, ranging from Canadian and US to global equities.
• Unique Selling Point: Integrating with BMO’s existing traditional banking services, it is very convenient for existing BMO customers who want to have all their banking and investing under one roof.

CI Direct Investing: Low fees are best for Human Advice

CI Direct Investing takes a hybrid approach to investing, combining fully automated investing with access to human financial advisors. This means it’s the perfect option for those who prefer receiving advice at a personal level and with lower fees.

• Fees: CI Direct charges management fees from 0.35% to 0.60% based on the account size, with the MERs ranging between 0.26% and 0.34%.
• Minimum Investment: No minimum is required.
• Key Features: It brings you goal-based investing, comprehensive financial planning, and a tailored portfolio based on risk tolerance.
• Unique Selling Point: For those needing an expert to guide them, CI Direct investing stands out because of the availability of human financial advisors at no extra costs.

Just Wealth: Education Savings and RESPs best

Families aiming to save for their kids’ education will find Justwealth an ideal choice for its tailored RESP portfolios.

• Fees: The management fee is 0.50% on the first $500K and 0.40% on balances above $500,000. The average MER is 0.20%.
• Minimum Investment: $5,000.
• Key Features: Justwealth offers personalized RESP portfolios with low-cost ETFs.
• Unique Selling Point: For education savings, its RESP-focused portfolios make it a go-to robo-advisor.

Questwealth Portfolios: Best for Low-Cost Investing

As one of the lowest fee players in the industry, Questwealth, under the Questrade umbrella, is perfect for low-cost-conscious investors who want a professionally managed portfolio.

• Fees: Management fees are 0.20% for accounts over $100,000 and 0.25% for accounts under $100,000. The average MER is 0.19%.
• Minimum Investment: $1,000.
• Key Features: Questwealth has an active portfolio approach focused on generating market outperformance over time.
• Unique Selling Point: The ultra-low fees make it one of the cheapest robos in Canada.

Conclusion: Robo Advisor or Robo Adviser? Which one is right for you?

In 2024, when deciding on a robo advisor, you are balancing out the fees, the features, and the investment goals you seek to achieve. Wealthsimple and CI Direct Investing are great robo-advisors for beginners or people seeking human advice. At the same time, Questwealth and BMO SmartFolio have some of the lowest fees for more experienced investors. It’s essential to evaluate the management fees, MERs, and other features to choose the robo-advisor that best fits your financial goals, whether saving for retirement, high-risk portfolio growth, or ethical investments.