# Canadian robo advisors?



## Electric (Jul 19, 2013)

I read an article that there is a new Canadian robo-advisor similar to wealthfront, called Nest Wealth. It costs $80 per month, and that seems to be relatively poor value for money considering it seems to be a rather simple AA algorithm. It is an annual drag of 1% plus fund fees on the $100k I would be prepared to try them out with. 

Are there any alternatives right now? Any on the horizon?


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## avrex (Nov 14, 2010)

*1. * For those people that are currently using a financial advisor and don't have the time or inclination to Do-It-Yourself, *this could be good for them.*

They're probably currently paying, say, 2.00% in advisor and MER fees. 
With these Robo-advisors, I'm assuming the client fills in a Know-Your-Client survey and the automated Robo-advisor spits out a nice (couch potato style) portfolio that the client will invest in. In this example, the client has cut their fees from 2.00% to 1.00% and is getting the same level of service. 

*2. * For those people (like many on this forum) that already know how to Do-It-Yourself, *there would be no need* to utilize the Robo-Advisor.
*We can build our own portfolio at a much lower-fee.*


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## humble_pie (Jun 7, 2009)

BMO has a service called something like Advice Direct. Costs roughly 1% of MI per annum.

all i know is that they are fully licensed broker/dealer human beings, not robots, who help clients develop an investment plan, then help em implement it. There would be, i assume, questionnaires similar to those submitted to robo advisor.

cost is roughly 1% of MI per annum. This is competitive with the tiny number of decent but low-cost mutual fund companies that have been identified on here. To repeat, those companies include mawer, leith wheeler, steadyhand & jarislowsky fraser. Philips hager & north may be another one; or its MERs may run slightly higher than this tiny group but still less than your average fund family.

back to the BMO proposition, clients talk or email with a live representative. The fact that BMO is offering such a service is telling me that there is a significant market of DIYers - either new DIYers or else DIYers who discover that they don't like being 100% on their own - who will pay to have their hands held.

it appears they won't pay the traditional 2.50-3% plus sometimes load fees that the traditional fund industry wants to charge. But they will pay something, at a noticeably reduced rate.

"this little bowl is just right," said goldlocks. And she sat down & ate it all up.

of course, we hardcore DIYers - we who rightly or wrongly are stubbornly convinced that we know how to cut the biscuit all by ourselves - we are probably never going to want the services of either Advice Direct or a robot ...


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## AltaRed (Jun 8, 2009)

The robo-advisor or something like BMO's Advice Direct could be a niche between fully autonomous DIYers and the full service role. In a way, BMO's AD is not unlike an investor who hires an independent advisor who provides financial plans and advice, but the investor does his/her own executions. They are in fact muscling into that segment of the business with captive BMO IL clients.


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## Electric (Jul 19, 2013)

What about the ShareOwner offer? Automatic rebalancing, automatic debits to add money on a monthly basis, $480 per year for accounts over $100k. The $480 includes all transaction fees. Company has been in business since the 80s.

It looks like reasonable value for money, at least to me.


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## tygrus (Mar 13, 2012)

Not sure about these programs but one thing is certain, the days of the broker or financial adviser are quickly coming to a close.


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## Synergy (Mar 18, 2013)

tygrus said:


> the days of the broker or financial adviser are quickly coming to a close.


How so? Are people really going to take the initiative to learn about managing their own finances, investments, etc.? I'm sure things will evolve over time but I don't see their profession dissappearing altogether anytime soon. Banks make a lot of money off of their wealth management divisions and it's expected that it will play an important role in their future growth.


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## james4beach (Nov 15, 2012)

Synergy, I think you're missing a big part of this. People are reacting against the very poor professionalism (this is putting it generously) of old fashioned brokers and wealth managers. 

These are firms that charge people 2% MERs when the real cost is 0.2% MER. They're places like Investors Group who bulls***'ed me for years, then refused to let me take my money out when I got tired of their crap. Or a division of RBC who deliberately dragged their feet and refused to transfer out my RRSP, even though it was in cash and readily transferable ... it took them 2 months to make a simple transfer happen.

Or pitch junky investments to people, when they're trying to sell a high fee product or offload something of excess inventory. Or load up profiles with chronic under-performers.

Obviously, the nail in the coffin were firms like Lehman Brothers and Bear Stearns who outright lost client money (stole it, some would say). Or MF Global who recently lost/stole $1 billion of client funds and walked away from the crime.

This industry has no integrity. So an informed investor faces these two choices

a) go with an "advisor", take the chance that he's an idiot (he probably is... most of them have minimal education) plus the risk he or his firm are crooked/dishonest

or

b) go with a discount brokerage, take the chance of screwing up on my own but at least retaining direct control and reducing the chance of a crooked firm playing tricks with my money


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## Synergy (Mar 18, 2013)

james4beach said:


> Synergy, I think you're missing a big part of this. People are reacting against the very poor professionalism (this is putting it generously) of old fashioned brokers and wealth managers.
> 
> These are firms that charge people 2% MERs when the real cost is 0.2% MER. They're places like Investors Group who bulls***'ed me for years, then refused to let me take my money out when I got tired of their crap. Or a division of RBC who deliberately dragged their feet and refused to transfer out my RRSP, even though it was in cash and readily transferable ... it took them 2 months to make a simple transfer happen.
> 
> ...


I don't think I'm missing anything. You're reading between the lines. I never said that they offer cost effective service, have integrity, are professional, etc. All I said was that I thought the industry was not going away anytime soon and that I thought the profession would evolve over time (lower fees, etc.). MCD doesn't offer particularly good food but people keep going and MCD continues to evolve over time. People would be better off physically and financially if they stopped spending so much money on fast food, expensive coffee, etc. but they continue to do so.

I simply wanted to now how they're going to be "quickly" coming to a close.


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## Echo (Apr 1, 2011)

Here's another helper service called Wealth Simple, which charges 0.5% per year for "light advice" - building and rebalancing a portfolio of ETFs - from a human being.

http://www.moneysense.ca/invest/etfs/etf-portfolio-service-doesnt-use-robo-advisers?


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## GPM (Jan 23, 2015)

*Using Robo Advisors*

Quick Questions: 
1. Anyone try any of these guys? I am a hard core DIY with a very simple portfolio - VTI,VXUS,VCN, and a RRSP mortgage with a ridiculous high rate (well 6.25 circa 1998). Will add bonds as pay down. However, in the event of my catastrophic croaking, my wife would not have time to manage the portfolio. I have looked at the companies, expensive but not as ridiculous as the companies charging 1% of assets under management (PWL, McDonald Shymko and Company for example - by by advantage of indexing!). However, the portfolios are overly complex and use odd ETF,s. Opinion?
2. Would it be better to send her to Mawer, Steady Hand, Leith Wheeler ,etc?
3. With insurance she would make the cut for discretionary management at larger firms, including Mawer and the really big boys. Opinion?
4. I found a big bank broker who would run the portfolio, trade based. Nice fellow, honest, and highly reccommend. I think he's willing due to curiosity! He even admitted (due to new disclosure laws), that the system is rigged. The larger the trade, the higher the fee, starting at ~ $250/trade and company conversion rate (no gambit - 1.3% conversion rate). This is to push people to assets under management - 1% in my case. My $80 in yearly trades would become $2500+!!! However financial plan, insurance plan, etc all in one place. However, services we don't need. (Used a fee only planner and have insurance taken care of). 
5. Wife is an MD, but MD Financial is a criminal organization. Worse than banks! Sorry, if I can't deride organizations, I am willing to change the post. However, her colleagues are leaving in droves after reading John Bogle. Also a warning to young Doctors out their. Canadian a Dental 
Association should be shunned as well for new dentists. Experience speaking here.


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## GreatLaker (Mar 23, 2014)

*Robo Advisor Comparison*

There is a price comparison of Canadian robo advisors plus Steadyhand and Tangering on the Spring Personal Finance blog at the following link:
Canadian Investment Fee Calculator


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## GPM (Jan 23, 2015)

Thanks!


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## GPM (Jan 23, 2015)

Any DIY with a back up plan for their spouses if they pass on first? The above link was very helpful cost wide.


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## AltaRed (Jun 8, 2009)

Cost is near the bottom of the issues when it comes to a backup plan for a disinterested spouse in event of the captain of the ship going down. What one needs is an investment advisor based on % of AUM who is committed to continue to implement and maintain a Couch Potato portfolio, provide some tax advice, and who has fudiciary responsibility to the client and not to the firm that employs him/her.


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## humble_pie (Jun 7, 2009)

GPM said:


> in the event of my catastrophic croaking, my wife would not have time to manage the portfolio ... Would it be better to send her to Mawer ... Wife is an MD



mawer, absolutely

there's a good chance she'll take an interest herself, sooner or later. Mawer or equally reputable firm will support her until that time.


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## mary-dob (Mar 3, 2016)

*Robo advisor fee comparison*

I ended up going with ModernAdvisor and I've been happy with them so far. I believe they also just launched free trial accounts so you can try the service before investing any money or switching


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## BoringInvestor (Sep 12, 2013)

mary-dob said:


> I ended up going with ModernAdvisor and I've been happy with them so far. I believe they also just launched free trial accounts so you can try the service before investing any money or switching


Did you also post on RedFlagDeals under the name: _itsmaryhere_? 
http://forums.redflagdeals.com/wealthsimple-wealthbar-quest-trade-portfolio-iq-1933133/

I have to ask (as your post raises my suspicions) - do you work for ModernAdvisor or are you in any way connected to someone associated with the company?


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## avrex (Nov 14, 2010)

*Avrex's Top 4 reasons that 'mary' is from ModernAdvisor.*

4. All three of mary's redflagdeal posts, have an embedded URL linking back to ModernAdvisor.
3. Two of those three posts were on 2016-03-03, matching the date of the single post here on this forum of 2016-03-03.
2. ModernAdvisor is located in Vancouver, BC. User itsmaryhere is located in Vancouver, BC. 

1. And here's my fun guess.

mary-dob = itsmaryhere = ....










Get it?

Mary = Merri 

:biggrin-new:

Welcome to the forum, ModernAdvisor. 

We welcome everyone.
(admins, please do not ban mary-dob. I'm truly interested and want to hear more from them.)

I noticed that your fees are fairly reasonable. 
Please stay awhile and tell us more about your company.


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## kmerri (May 18, 2016)

avrex said:


> 4. All three of mary's redflagdeal posts, have an embedded URL linking back to ModernAdvisor.
> 3. Two of those three posts were on 2016-03-03, matching the date of the single post here on this forum of 2016-03-03.
> 2. ModernAdvisor is located in Vancouver, BC. User itsmaryhere is located in Vancouver, BC.
> 
> ...


Oh my goodness! I just saw this now, via the link from another thread as we have just posted a sponsored post. I kind of wish it _had_ been me posting up above, so at least I would have got a notification! And I wish I could claim credit for turning Merri into 'Mary' :biggrin:, that's actually pretty clever haha 

That said, it sounds like it was indeed a misguided post by someone on our team. So I'm thoroughly embarrassed and apologetic on our behalf. Can you see me blushing from there?!


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