Before we get started, it’s important to note that robo advisors are not robots. While the process of investing is automated by an algorithm, that algorithm is created and monitored by financial professionals; human beings who are also there to handle customer service requests.

Robo investing is great for those who are looking for a ‘set it and forget it’ type of strategy to save for their retirement. There are a number of robo advisors in Canada including Justwealth; the subject of this Canadian robo advisor review.

Justwealth runs off the motto “investing the way it should be”. This Canadian robo advisor prides themselves in offering a diverse selection of investment services that are convenient, affordable, and fit the needs of their clients. In this Justwealth review, I’m going to help you determine if they are the right robo advisor for your needs.

Justwealth Accounts

Justwealth has a variety of accounts to choose from including the following:

• RRSP
• Spousal RRSP
• TFSA
• RESP
• Non-Registered taxable account
• RRIF
• Locked-In Retirement Account
• Life Income Fund
• RDSP
• FHSA

Once you choose the account that is best suited for your interests, you will be asked several questions to help determine your risk tolerance and goals. A personalized portfolio will be selected for you based on your answers and will be automatically adjusted as required.

Interested individuals should note that you will need to invest a minimum of $5000 to open an account with Justwealth, unless you are opening a RESP or FHSA which has no minimum.

Already have an RRSP or other investment accounts? Read on how you can transfer it here. Justwealth will even cover your institution’s transfer fees up to $150 for accounts of $25,000 or more.

Bonus: Money We Have readers can get up to $500 for free when you sign up for Justwealth through my referral link.

Justwealth Fees

One of the great things about Justwealth is that their fees are very straightforward and easy to understand.

• Accounts under $500,000 will be charged a 0.5% management fee
• Amounts over $500,000 will be charged a 0.4% management fee
• Minimum monthly fee of $4.99 if your annual 0.5% fee is less than $4.99 per month

Justwealth has a fee structure that’s a tiered system, similar to what Wealthsimple and other robos do. If you have over $500,000 invested, then the first $500K is charged a 0.5% management fee and any additional amounts above that are charged a 0.4% fee. The first $500K is always a 0.5% fee regardless of how much the client has invested.

On top of this, there is an MER fee on the ETFs in your portfolio of about 0.25%, which means your fee overall annual fee is roughly .60% – .70%.

The minimum monthly fee of $4.99 per month only applies if the 0.5% annual Justwealth fee (divided over 12 months) is less than $4.99 per month. The minimum monthly fee for RESP or FHSA accounts is $2.50/month.

Clients will be charged the minimum monthly fee OR the 0.5% annual fee, whichever one is greater.  However, clients will NEVER be charged both fees.  It is always one or the other.

This fee structure is incredibly low when you consider that the average mutual fund MER is 2%. It’s not as cheap as doing things yourself, but you’re basically paying a low fee for the convenience.

Justwealth review

Justwealth started in 2016, so it’s one of the longest-established robo-advisors in Canada. There are decades of hands-on experience behind the creation of this Canadian robo advisor, including many people who have diverse backgrounds. It’s a strong, knowledgeable team that is more than capable of handling and taking care of your financial needs.

Justwealth stands out from other Canadian robo advisors because each individual that signs up will receive a portfolio advisor and support team. In addition, you can request financial planning services for free if you’re a client. Portfolio reviews are also free to anyone, client or not. According to Justwealth, they offer the largest portfolio collection of any robo advisor available in Canada; they offer 80 portfolio options using 50 different ETFs. While this may seem like a lot, your dedicated portfolio advisor will help you choose what makes sense for your individual situation.

Justwealth’s strength lies in its Registered Education Savings Plan (RESP) portfolios, which use target dates.  Target-date portfolios gradually change their asset allocation over time. They are more heavily invested in equities in the early years to maximize growth, and over time, they gradually shift to safer investments as your child gets closer to their post-secondary education.

The same applies to their Retirement Target Date portfolios, but in reverse fashion as it gradually becomes more conservative as you’ll eventually need to draw down.

What may also interest people is Justwealth’s line of tax-efficient portfolios that have been optimized for after-tax performance in non-registered accounts.

Additionally, Justwealth has a fiduciary requirement. This means that the financial advisors at Justwealth are obligated to put their clients’ welfare and interest above all else. This is a huge benefit to have if you are looking for somewhere to help you manage your money and save for the future.

Pros and cons of Justwealth

Of course, like any other robo advisor, Justwealth isn’t perfect. Here’s a breakdown of the main pros and cons.

Justwealth pros

• Large selection of portfolio types
• Fiduciary requirement
• Personal advice options available
• Up to $500 cash bonus offer for Money We Have readers

Justwealth cons

• Minimum investment requirement of $5000
• More expensive than doing it yourself

How Justwealth compares to others

So, how does Justwealth compare to other Canadian robo advisors?

Well, Justwealth definitely takes the proverbial cake when it comes to portfolio options, which is definitely something to keep in mind when choosing the best robo advisor for your needs. Another huge benefit that makes Justwealth a standout is the fiduciary requirement – something that will definitely bring a little peace of mind to those new to investing or those who are on the fence about robo advisors.

As mentioned, their RESP options are excellent and are arguably the best of all Canadian robo advisors.

However, the biggest pitfall of Justwealth is the minimum requirement of $5000. While this sum likely isn’t a big deal if you are considering switching your RRSP, it’s a large amount for young investors or those just starting out. Especially when you consider that Wealthsimple and Nest Wealth have no minimum requirement and Questwealth Portfolios only require $1,000.

Transferring your TFSA and/or RRSP to Justwealth is easy as they can ensure you don’t pay any taxes.

Final thoughts

Clearly, my Justwealth review is positive. With its fiduciary requirement and a large selection of portfolio options, Justwealth proves itself to be one of the top contenders when it comes to Canadian robo advisors. It’s an especially great choice for those who want to take advantage of the low fees and simplicity of a robo advisor, but still want to have easy access to a support team.

With competition being tough, many consumers would chase the highest interest rates, but that often required you to constantly switch banks. To combat this issue, horizons introduced CASH.to, a High Interest Savings exchange-traded fund (ETF). When looking at the yields, it’s obvious that CASH.to is a great choice for those looking to invest in fixed income. But what is CASH.to, is it safe, and how do you buy CASH.to? I’ve got all the answers in this CASH.to guide.

Understanding CASH.to?

CASH.to represents the ticker symbol for the Horizons High Interest Savings ETF listed on the Toronto Stock Exchange. The “.to” extension indicates that it trades on Canada’s main stock exchange.

This exchange-traded fund focuses on generating monthly income for investors by allocating assets into high-interest deposit accounts held with Canadian chartered banks. The fund’s primary goal centres on maximizing your monthly distributions while maintaining capital preservation and liquidity.

When you invest in CASH.to, you gain exposure to Canadian dollar-denominated cash-equivalent investments without needing to manage multiple bank accounts yourself. The ETF operates as a convenient vehicle for parking cash while earning competitive interest rates that often exceed traditional savings accounts.

How Does CASH.to Work?

When you invest in CASH.to, your funds are pooled with other investors’ money and placed into high-interest savings accounts at major Canadian financial institutions. The fund manager actively seeks out accounts offering the strongest returns and can shift money between institutions to maximize yields.

This pooling strategy provides a significant advantage. Because CASH.to manages billions of dollars in assets, it can negotiate better rates than individual investors typically access on their own.

Key operational features:

• Monthly distributions are paid directly to your brokerage account
• You must hold shares by the ex-dividend date to receive that month’s payment
• The fund continuously reallocates capital to maintain optimal yields
• Returns reflect the aggregated performance of multiple high-interest accounts

The mechanics mirror those of a standard savings account, where you deposit money and receive interest payments. The main difference is that CASH.to leverages institutional scale to secure enhanced rates for investors.

How do CASH.to Yields Work?

CASH.TO generates returns based on interest earned from deposits held at Canadian financial institutions. The fund’s performance fluctuates with prevailing interest rates. During 2021’s historically low rate environment, yields hovered around 0.6%. Current interest rates have pushed yields into the 3.5% to 4.5% range.

These rates typically exceed what you can access by opening accounts directly with banks. The quoted yields represent annual figures. You receive distributions monthly, calculated as roughly one-twelfth of the annual rate.

The fund charges a management expense ratio of 0.11%. This fee is deducted before your yield is calculated and posted, meaning the rate you see already accounts for costs. You don’t need to subtract anything additional to determine your actual return.

Your distributions arrive as monthly deposits into your brokerage account if you hold shares by the ex-dividend date. This structure mirrors traditional savings accounts but operates through the exchange-traded fund framework.

How Does the Share Price of CASH.to Function?

The share price of CASH.to operates on a predictable cycle tied to its monthly distributions. The ETF maintains a floor net asset value of $50, which means the trading price stays at or above this baseline.

Throughout each month, the share price gradually increases as the fund accrues interest income. This daily appreciation continues until the distribution payment date arrives. On the ex-dividend date, the share price typically reaches its monthly peak before resetting to the $50 minimum after the distribution is paid out.

Key pricing mechanics:

• The price climbs each trading day incrementally
• The increase reflects the accumulating distribution value
• The share price drops back to $50 after the payout

This structure means that the timing of your purchase makes little difference to your returns. When you buy at a higher price mid-month, you’re paying for the upcoming distribution that’s already embedded in the cost. The distribution you receive offsets the elevated purchase price, resulting in a neutral timing effect for investors.

How Are You Taxed on CASH.to?

When you hold CASH.to in a non-registered account, you’ll pay tax on the monthly distributions as interest income. This interest gets added directly to your total income for the year and taxed at your marginal tax rate.

If you sell your CASH.to shares for more than you paid, you’ll trigger a capital gain. The tax treatment works like this: only 50% of your capital gain is added to your taxable income. For example, if you sell shares and realize a $100 profit, you’ll include $50 in your taxable income, which is then taxed according to your marginal rate.

Registered accounts work differently:

• RRSP
• TFSA
• LIRA
• RESP

When you hold CASH.to in any of these registered accounts, you don’t need to track interest or capital gains. You won’t owe any tax on distributions or price appreciation within these accounts.

How to buy CASH.to?

You can buy CASH.to via your broker or your online discount brokerage account. CASH.to can be held in all registered and non-registered investment accounts.

CASH.to is eligible for placement in registered accounts such as TFSAs and RRSPs, as well as non-registered investment accounts. Your brokerage may charge a commission for executing the trade, though many platforms now offer commission-free ETF purchases.

Important limitation: Certain financial institutions restrict access to this ETF. TD Direct Investing currently blocks clients from purchasing CASH.to, which appears to be a business decision rather than a regulatory restriction.

Before placing your order, verify that your brokerage permits CASH.to transactions. If your current platform doesn’t support it, you may need to transfer funds to a different brokerage that allows High Interest Savings ETF purchases.

CASH.to vs. GICs

CASH.to and GICs represent two distinct approaches to cash management in Canada. GICs are fixed-term products offered by banks and trust companies that lock in a specific rate of return for a predetermined period.

The yield structure differs significantly between these options. A GIC provides a fixed interest rate that remains constant throughout its term, whether that’s one year or longer. CASH.to distributes monthly dividends that fluctuate based on prevailing market conditions and short-term interest rates.

Liquidity is another key distinction. GICs typically require you to commit your funds for the entire term, restricting access until maturity. You can trade CASH.to shares during Toronto Stock Exchange hours, providing the ability to access your capital when needed.

Protection and costs also vary. Eligible GICs qualify for CDIC coverage up to $100,000, safeguarding your principal. CASH.to does not carry this insurance protection. Additionally, CASH.to charges management fees that reduce your net returns, while GICs have no associated fees.

Overall, CASH.to gives you more flexibility than GICs since you can withdraw your funds at any time. However, you need to pay fees for CASH.to and there’s no CDIC insurance.

Comparing CASH.to with Other Options

Besides GICs, there are a few other alternatives to CASH.to that are worth considering:

High Interest Saving Accounts

ou can bypass CASH.to entirely by placing funds directly into a high-yield savings account. The returns from CASH.to typically exceed what most banks offer on standard deposit accounts.

Higher rates may be available through promotional offers for new deposits, but this requires effort on your part to transfer money between institutions and open multiple accounts. A key benefit of direct deposits is CDIC protection, which covers your money if you open an eligible account with a member institution of the Canadian Deposit Insurance Corporation.

CASH.to does not provide CDIC coverage, making direct savings accounts more secure for those prioritizing capital protection.

Money market funds

Money market funds are funds that invest in short-term bonds. They typically invest in bonds that have a maturity of less than 30 or 60 days so their yield can follow the interest rate movements. This can be a decent alternative to CASH.to, but investors should look at the quality of all bonds within the funds to make sure they match their risk profile.

What Happens to CASH.to if Interest Rates Drop?

When interest rates decline, your CASH.to distributions will decrease accordingly. The fund generates returns by depositing cash into Canadian bank accounts, and these earnings fluctuate with prevailing interest rates.

Your monthly payouts will shrink as the fund earns less on its holdings. During periods of historically low rates, distributions can fall significantly—potentially to levels similar to 2021 when yields hovered around 0.6%.

Key impacts on your investment:

• Lower monthly distributions
• Reduced annual yield percentage
• Decreased passive income generation

The fund’s performance remains directly tied to what Canadian banks pay for deposits. You won’t receive fixed returns, as the yield adjusts continuously based on market conditions.

Is CASH.to Safe?

CASH.to does not carry CDIC insurance, which distinguishes it from GICs or traditional high-interest savings accounts. This lack of insurance coverage applies to all ETFs, stocks, preferred shares, and bonds, not just CASH.to specifically.

The ETF deposits funds into accounts at major Canadian financial institutions, including National Bank, Scotiabank, and CIBC. Canadian banks rank among the most secure financial institutions globally, which provides a degree of safety for your investment.

While you cannot consider CASH.to 100% safe due to the absence of CDIC protection, the risk remains relatively low. If one of Canada’s major banks were to collapse, the resulting economic crisis would likely overshadow concerns about individual deposit losses.

Key Safety Considerations:

• No CDIC insurance coverage
• Funds held at multiple established Canadian banks
• Canadian banking system has strong stability record
• Risk comparable to other ETF investments

Your money faces minimal risk under normal economic conditions, though you should understand the differences between ETF holdings and insured deposit accounts.

Final Thoughts

CASH.TO stands out as a practical choice for parking funds you want to keep accessible. You won’t be locked into your capital for months or years, as you would with fixed-term products. The ability to trade during market hours gives you flexibility that traditional savings products can’t match.

You can hold this ETF in your TFSA, RRSP, or any other account type you already have. This means you won’t need to open additional accounts or juggle multiple institutions. The competitive interest distribution makes it worth considering, though you should weigh the absence of CDIC coverage against your own risk tolerance and financial goals.

The popularity of this fund reflects its usefulness for investors seeking liquidity combined with reasonable returns on cash holdings.

What is mortgage insurance in Canada?

The first thing to understand is that there are two types of mortgage insurance in Canada. First, there’s mortgage default insurance meant for first-time home buyers with a high ratio mortgage. Then there’s mortgage protection insurance, which is optional for all homeowners.

If you’re buying a home with a down payment of less than 20% of the purchase price, mortgage default insurance is mandatory. Basically, it protects the lender if you default and can’t make your mortgage payments. 

Mortgage protection insurance is just another insurance policy. Essentially, this policy would pay the remaining balance of your mortgage if you were to pass away. You can also purchase additional options that cover disability, critical illness, or job loss.

How does mortgage default insurance work?

In Canada, the amount of your down payment will determine if you need mortgage default insurance and how much you’ll pay. The minimum down payment requirements are as follows:

• 5% if the home costs $500,000 or less.
• 5% of the first $500,000 and 10% on the remainder if the home costs less than $1,000,000.
• 20% if the home costs $1,000,000 or more.

Since mortgage default insurance only applies to high ratio mortgages, you only need to get it if your down payment is less than 20%.

CMHC used to be the primary mortgage default insurance provider, but Sagen and Canada Guaranty now also offer it. Don’t worry, you don’t need to apply for this separately from your regular mortgage. Instead, your lender will apply for it on your behalf.

How much does mortgage default insurance cost?

As you can imagine, mortgage default insurance is not free. The cost of mortgage default insurance ranges from 2.8% to 4% of your mortgage amount. The lower your down payment, the more you need to pay in insurance. This fee is usually added to your regular mortgage payments. That said, you can also pay it in a lump sum if you have the funds available.

For example, let’s say you’re looking to buy a property that costs $500,000 and you have a down payment of 5%. That means you would need a mortgage of $475,000. In this case, your mortgage default insurance would cost you 4% of the mortgage, which works out to $19,000. That means your total mortgage amount is $494,000. 

Keep in mind that lenders will factor in mortgage default insurance when determining how much mortgage you can afford. Since your monthly costs will increase, the amount of mortgage you’ll qualify for will likely decrease.

What is mortgage protection insurance?

Mortgage protection insurance is an optional type of insurance. If you purchased this insurance and you were to suddenly pass away, your insurance would pay the remaining balance on your mortgage. In addition, you can purchase extra options such as:

• Critical illness insurance
• Disability insurance
• Job loss insurance

In each situation, the payout would be specific. For example, some lenders may state the maximum payout if you were to pass away is $750,000 or job loss payments are up to $3,500 a month for up to 6 months.

Mortgage protection insurance can be important for people who have dependents. For example, let’s say you bought a home with your spouse. Most families would only be able to afford the payments and their day-to-day expenses while there are two incomes. If one income was lost, it might only be a matter of time before the household finances crumble. That’s why people are interested in mortgage protection insurance.  

How much does mortgage protection insurance cost?

The cost of mortgage protection insurance depends on your age and mortgage balance when you apply. The good thing is that once you’ve purchased this insurance, your premiums do not increase over the term. That said, if your mortgage balance increases or you need to refinance, you may want to get in touch with your lender to see how that affects your coverage.

Mortgage insurance vs life insurance

There’s often a debate between mortgage insurance vs life insurance, but honestly, there’s no argument. With life insurance, if you were to pass away, the sum you’re insured for goes to your beneficiary and can be used in any way they want. Most people will use it to pay for their mortgage, but they can also use it for things such as funeral expenses and even the future education costs for their child.

Mortgage protection insurance only covers the balance of your mortgage. So yes, your mortgage will potentially be paid off, but there will be no other funds left for your loved ones. Also, as you pay off your mortgage, the amount paid with mortgage protection insurance decreases. That’s not the case with life insurance.

In other words, getting life insurance is almost always the better solution if you’re looking for protection. Companies such as PolicyMe allow you to get insured quickly as things can be done online. The cost of life insurance depends on your age and health. Generally speaking, the younger you are, the lower your costs.

Mortgage default insurance vs mortgage protection insurance

If you’re still trying to figure out what is mortgage insurance in Canada, your best bet is to look at the differences as it’ll be easier to understand.

Mortgage default insurance works like this:

• It’s mandatory if your down payment is less than 20%
• It protects your lender if you default on your mortgage
• Your lender applies for it for you
• The premiums are based on a percentage of the size of your mortgage
• Payments are added to your monthly mortgage payments or can be paid as a lump sum

Mortgage protection insurance works like this:

• It’s optional
• It pays out if you were to suddenly pass away
• You can purchase additional insurance options that will pay out if you become critically ill, suffer a job loss, or become disabled
• Can be added to your mortgage at any time
• Must be purchased from your lender
• The cost typically depends on your age and the balance of your mortgage
• Life insurance may be a better option

As you can see, these two types of mortgage insurance are different products. 

Is mortgage insurance mandatory in Canada?

Yes and no. Mortgage default insurance is mandatory for buyers with a down payment of less than 20%, but mortgage protection insurance is optional. As you’ve already learned, life insurance is a better product since the premiums are similar but the payout is potentially higher.

Technically speaking, life insurance is always optional, but if you have a mortgage and dependents, getting term life insurance is highly recommended. The last thing you want is for your loved ones to face financial hardship if you’re to suddenly pass away.

Final thoughts

Knowing what is mortgage insurance in Canada isn’t the only thing you need to be aware of as a first-time home buyer. You’ll also want to get familiar with the differences between fixed and variable mortgages, as well as the mortgage stress test. 

By understanding how mortgages work in Canada, you’ll be more prepared during your home search. But, more importantly, once you put in a winning bid, you’ll know what comes next.

An RRSP is a government-registered account. It was designed to give you a tax break for your contributions, and could potentially lower your taxable income when you withdraw from it. Since RRSPs have a lot of rules, including the RRSP deadline, contribution limit, withdrawal penalties and more, many people often get confused. This RRSP guide will help explain the basics of RRSPs so you can get the most out of your account.

RRSP deadline 2024

The deadline for contributing RRSPs is 60 days after the end of the year. However, since that falls on a weekend this year, the 2025 RRSP deadline is Monday, March 3, 2025. Note that even though the deadline is 2025, you can use any contributions made before February 2025, for your 2024 tax year.

Keep in mind that RRSPs have an age limit. The RRSP deadline is December 31 of the year in which you turn 71. After this point, you have three options:

1. Take it out in cash as a lump sum
2. Purchase an annuity
3. Transfer into an RRIF

RRSP contribution limit

On top of the RRSP deadline, there is also an RRSP contribution limit that you need to be aware of. Your RRSP contribution limit is 18% of the total income you earned the previous year, up to a specific limit set by the CRA- whichever is the lower of the two options. The RRSP deduction limit for the 2024 tax year is $31,560.

If you go over your contribution limit, you will have to pay a penalty, which is one RRSP mistake you want to avoid since the penalty is 1% per month. That said, the CRA does give you a grace amount of $2,000 if you accidentally over contribute.

Keep in mind that you can carry forward any accumulated contribution room after 1991. So, if you are unable to max out your RRSP contribution this year, you won’t lose it. You can make up that difference later. You can find information on any unused contribution room online on your CRA account.

What is an RRSP?

RRSP stands for Registered Retirement Savings Plan. It’s a government-registered account that allows you to contribute a certain amount every year up until the age of 71. The big draw with RRPs is that they are tax-deductible, which makes it an attractive savings vehicle for those planning for their future retirement.

Since an RRSP is designed to be a retirement account, there are penalties for withdrawing from your RRSP early, except under specific circumstances which will be discussed later on in this article.

RRSP tax deduction

As mentioned above, your RRSP is a tax-deductible account which is its big draw. So, what does this mean?

When you contribute to your RRSP, that money will be deducted from your income, which reduces your tax burden. For example, let’s say you made $50,000 this year and you contributed $5,000 to your RRSP. Your contribution would lower your taxable income to $45,000 for the year.

Most people typically have their taxes taken off at the source by their employer. Since your taxable income gets lowered due to RRSP contributions, you’d likely get most of the taxes you already paid back in the form of a tax refund.

Now, keep in mind that an RRSP is not tax-free like your Tax-Free Savings Account. You do have to pay tax eventually. However, any income earned will remain tax-free until it comes time to withdraw the money. At this time, you will likely be retired and have no regular income, so even though you will be taxed on RRSP withdrawals, your tax rates shouldn’t be too high.

How to open an RRSP

Opening an RRSP is easy. You can open one at most financial institutions in Canada, including banks, online banks, and credit unions. Once you have chosen which financial institution you would like to open your RRSP and completed the application process, you can contribute to it.

RRSPs can hold all kinds of investments, including:

• Guaranteed Investment Certificates
• Savings Deposits
• Stocks
• Exchange-Traded Funds
• Mutual Funds
• Bonds

You can hire a financial advisor to help you create your portfolio. However, you don’t need to. If you are financially savvy, you can invest yourself through index investing. There are plenty of online DIY platforms for this, and it’s the option with the lowest fees. Obviously, you need to know what you are doing, but this option works well for some people.

If you don’t want to do it yourself, I recommend looking into a robo advisor, which does the work for you at a fraction of the price a financial advisor would charge. I suggest Justwealth if you are looking for a robo advisor. You can read my review here. Anyone who needs a bit more handholding could consider the services of a financial advisor.

*Note that you can move your RRSP to another financial institution later on if you wish. For instructions on how to do that properly, look at this article.

Using your RRSP for the Home Buyer’s Plan

I mentioned earlier that you will be penalized if you withdraw early from your RRSP except for specific circumstances. One of these circumstances is the Home Buyers’ Plan. Here’s how that works.

The Home Buyer’s Plan (HBP) is a government program that allows you to withdraw from your RRSP to buy or build a qualifying home for either yourself or a related person with a disability.

To qualify, you must meet the following requirements:

• You must be a first-time home buyer
• You must have a written agreement to buy or build a qualifying home for yourself or a related person with a disability
• You must be a resident of Canada
• The qualifying home must be used as a principal residence for yourself or a related person with a disability and the home must be occupied within 1 year after buying or building.

If you meet the program requirements, you can withdraw up to $35,000 from your RRSP for the down payment, tax-free. If you are purchasing with someone else, they can also take advantage of the HBP allowing you a total of $70,000 towards the down payment on the home.

However, the HBP is considered a loan and must be paid back to your RRSP within 15 years. If you don’t repay it, the amount is taxable and you lose the RRSP contribution room permanently.

Tax-Free First Home Savings Account contributions

In 2023, the Tax-Free First Home Savings Account (FHSA) was introduced. This allows first-time homebuyers to contribute up to $8,000 per year with a total contribution room of $40,000 available. Any unused contributions get carried over.

The FHSA can be incredibly handy since contributions lower your taxable income and any capital gains or interest earned within your account are tax-free. You essentially get the benefits of an RRSP and TFSA. With the FHSA, there’s no deadline. You just need to be mindful of the maximum contribution space each year and overall.

Using your RRSP for the Lifelong Learning Plan

Another specific scenario where you can withdraw from your RRSP without penalty is for the Lifelong Learning Plan (LLP). This government program allows you to temporarily withdraw up to $10,000 per year ($20,000 total) from your RRSP to pay for full-time education or training for yourself or a spouse/ common-law partner. It cannot be used for your children. It is similar to the Home Buyers’ Plan in that the money does have to be repaid back into your RRSP. In the case of the LLP, you have 10 years to pay back the funds.

What happens to an RRSP when you die?

One of the biggest questions about RRSPs is what happens to it when you die? Generally, the value of the RRSP needs to be included in the income of the deceased for the tax return of the year of death. However, there are three exemptions in which it can continue to be tax-deferred.

1. If the beneficiary is the spouse (or common law partner)
2. If the beneficiary is a financially dependent child or grandchild under 18 years of age
3. If the beneficiary is a mentally or physically infirm child or grandchild of any age

It’s important to remember your RRSP in your estate planning because it can be subject to taxes and probate fees depending on who the beneficiary is. For example, if you list the estate as the beneficiary then it’s subject to probate fees. But, if you specifically list your adult children, they still have to pay the tax, but no probate fees.

Final thoughts

An RRSP is a smart investment tool Canadians should consider using to help save for their future. Just make sure to take the time to understand how it works because there are a lot of rules to be mindful of such as RRSP deadline, contribution limits and more. It may be a bit intimidating at first, but once you understand the basics, an RRSP will make saving for retirement a breeze.

Many people don’t realize that bank mortgage brokers may not get them the best rates since they can only offer what their employer has available. Working with a mortgage broker that’s not tied to one single bank usually benefits you since they can shop around for you. However, just because they have access to the wholesale mortgage market doesn’t mean they’ll get the best rate.

Do mortgage brokers actually get the best rate?

Generally speaking, mortgage brokers do get the best rates. To be clear, I’m referring to mortgage brokers who don’t work for a single bank. As mentioned, mortgage brokers have access to more lenders, including the big banks and monoline lenders. Since they typically work with 30+ lenders, they should be able to get you the best rate.

In most cases, mortgage brokers will give you a quote based on recent deals they’ve closed or the marketing materials they’ve been provided with. They’re not going to call every lender they work with to determine the current rates. There really is no need to since they have the information. I wouldn’t call this lazy; this is just the way it works.

If you’re about to get a mortgage, it doesn’t hurt you to make a few calls yourself. Start with your own bank and find out what their rates are. Then call a few more. If you’re offered something lower by chance, get it in writing and take it to your broker to see if they can beat it.

Not all mortgages are the same

Banks, mortgage comparison websites, and mortgage brokers typically display rates saying “as low as.” It’s important to understand that while it’s possible to get a really low rate, it may not be available to everyone.

Most of the lowest rates apply to mortgages that require insurance. That may seem odd, but that’s because the mortgage insurance cost makes up the spread vs. uninsured mortgages. If you’re refinancing, e.g. you want to get a home equity line of credit (HELOC), you usually won’t get the lowest rates). There’s also your credit score to consider. Someone with a less than ideal credit history will likely end up paying more.

Then there’s the mortgage itself. If the terms favour the bank, e.g. no prepayments, high fees for breaking the terms, then you’ll get the lowest rates. In most cases, homeowners will want some terms that benefit them. Having the ability to make extra payments is more important than you may realize.

When comparing mortgages, you need to make sure the terms are identical for a fair assessment.

How do mortgage brokers get paid?

Mortgage brokers get paid by the lender or their employer. There’s no cost to you, which is why using a mortgage broker benefits you. Even if you find a better rate on your own, you don’t have to pay the broker anything, so it never hurts to use one.

Unfortunately, there are a few bad apples out there. A small minority of brokers may ask you for a cash fee to help you process your application. For example, they may say that they can increase the income on your application, which would allow you to get a bigger mortgage. You should decline right away as this is usually a sign of fraud. 

Should you use a mortgage broker?

In my opinion, you should always enlist the services of a mortgage broker. You’re basically getting help from a professional at no cost to you. If you happen to find a better rate on your own, see if your broker can beat it or have it matched. If they can’t match it, a good broker will tell you to take the better offer you’ve found.

Another benefit of using a mortgage broker is if you have a complicated situation. You could be self-employed, you might have multiple properties, or you might have different assets that are tied up right now. This could make securing financing difficult, but a mortgage broker may be able to assist you. They can also explain all the different things that affect your mortgage including the mortgage stress test.

Major banks typically look for clients that have simple financing needs. Since mortgage brokers work with multiple lenders, they likely know which ones would be willing to provide you with the funds you need based on your situation.

Where to find a mortgage broker?

Using an online mortgage broker is one of the easiest ways to find the lowest mortgage rates. Everything is done online, so there’s no need to meet anyone in person. That’s right, from pre-approval to closing, you can complete everything virtually.

Since they work with 30+ lenders (big and small), they can search for the best rates on your behalf. When it comes to all the actual paperwork, they have secure servers, so you don’t need to worry about any of your personal information being compromised.

You can get started with Breezeful right away after answering a few questions. A real mortgage broker will then review your answers and email you the best rates currently available. 

Have you ever found yourself thinking, “I really want to start investing, but where do I even begin?” It’s easy to feel overwhelmed – between all the jargon, acronyms, and that mysterious “ticker talk” (yes you got it, those ETF symbols), it can seem like a lot to handle. Figuring out what to invest in, how much of each asset to hold, and when to rebalance? It’s enough to make anyone feel stuck, even the most analytical among us.

But here’s the thing: investing doesn’t have to be intimidating. BMO’s Asset Allocation ETFs are designed to take the complexity out of the equation, giving you an all-in-one solution that balances your portfolio without all the stress and second-guessing.

What are Asset Allocation ETFs?

Asset allocation ETFs are portfolios built with a pre-determined asset mix. Within that mix, you’ll find a variety of asset classes, like fixed income and equities, across various indexes, sectors, and countries. Instead of having to manually automate and rebalance your portfolio, these ETFs have an automated re-balance set to bring it back to your determined asset mix, for a low cost.

For example, the BMO All-Equity ETF (ZEQT) focuses on growth by allocating a higher percentage to equities, while the BMO Conservative ETF (ZCON) has a conservative approach with a higher allocation to fixed income securities. This flexibility means that investors, whether just starting out or nearing retirement, can find a product that matches their goals.

Asset allocation ETFs provide a one-stop-shop for those looking for broad diversification, considering each investors unique goals and desired asset mix.

Solving a Problem: The Origins of Asset Allocation ETFs

To understand the popularity and importance of asset allocation ETFs, it can help to look back in time to how these useful tools came to existence. The concept was born out of a problem faced by many investors: managing a diverse investment portfolio, while sticking to their chosen asset allocation.

Imagine an investor in the early 2000s with a mix of individual stocks, bonds, and perhaps some mutual funds. Every year, they had to review their portfolio and adjust the weightings to match their evolving goals, all while considering tax implications, trading costs, and time constraints. Not only was this time-consuming, but there was also room for human error—sometimes leading to portfolios that were overly concentrated in certain sectors or regions.

The financial crisis of 2008 further highlighted the need for better portfolio management. Investors who had failed to properly diversify or rebalance suffered significant losses, while those who had a more disciplined approach weathered the storm more effectively.

Recognizing these challenges, ETF providers like BMO saw an opportunity to create a product that simplified the investment process. The idea was simple but powerful: create an all-in-one ETF that would offer diversification, automatic rebalancing, and cost efficiency. By using ETFs as the building blocks, providers could offer exposure to global markets and different asset classes at a fraction of the cost of traditional mutual funds. Thus, the asset allocation ETF was born.

Source: BMO Global Asset Management, BMO Growth ETF (ZGRO:TSX), as of September 18^th 2024 

The portfolio holdings are subject to change without notice and may only represent a small percentage of portfolio holdings. They are not recommendations to buy or sell any particular security.

Why Does the Mix Matter?

The famous Brinson, Hood, and Beebower (BHB) study, published in 1986, found that over 90% of a portfolio performance variability is driven by asset allocation, not stock picking or market timing.

This shifted how investors approach portfolio management, emphasizing the importance of diversification across asset classes for long term success. Most asset allocation ETFs, or funds for that matter, are now built on this principle. Reinforcing the idea that asset allocation, rather than stock-picking or timing, drives the bulk of long-term investing success – a perfect fit for investors looking for a hands-off “couch-potato” way to build their wealth.

Why Asset Allocation ETFs

Simplicity and Convenience

With asset allocation ETFs, they take care of the heavy lifting. With automatic rebalancing and built-in diversification, you get a hands-off investment strategy.

Diversification

These ETFs provide exposure to a broad mix of global stocks, ensuring you’re well diversified across sectors and regions, whether you prefer a conservative, growth, or somewhere in between approach.

Cost-Effective

One of the biggest advantages of ETFs is their cost-effectiveness, and BMO asset allocation ETFs are no exception. Additionally, with fewer transactions needed to maintain the portfolio, investors can avoid high trading costs.

Long-Term Focus

Asset allocation ETFs are designed with a long-term perspective in mind, making them ideal for investors focused on building wealth. By keeping a steady asset mix and rebalancing regularly, these ETFs help investors avoid emotional decision-making that often leads to buying high and selling low.

The T Series: A Tailored Solution for Retirees

One of the newer innovations in BMO’s lineup of asset allocation ETFs is the T series¹, specifically designed for retirees and those nearing retirement. Retirees often face the challenge of generating a steady cash flow from their investments while minimizing the risk of running out of money. The T series solves this problem by offering a systematic withdrawal plan, allowing investors to receive monthly cash flow helping to ease retirement planning.

For example, the BMO Balanced ETF (T6 Series) (ZBAL.T) is a T series ETF designed to provide steady cash flow by investing in a balanced mix of equities and bonds. The fund pays out fixed monthly distributions (6% annualized)² that are a blend of income and return of capital, which is especially valuable for in retirement.

Final thoughts

BMO Asset Allocation ETFs offer a simple, diversified, and cost-effective solution for investors at every stage of life. Whether you’re just starting out, looking for steady growth, or planning for retirement, these ETFs provide the perfect blend of convenience and financial security. For retirees, the T series includes the benefits of consistent cashflow, making it easier to manage withdrawals during retirement.

With BMO’s asset allocation ETFs, investors can feel confident in their financial future, knowing they’ve chosen a product that aligns with their long-term goals and offers peace of mind in any market condition.

For more information visit BMO Global Asset Management to learn more.

^{1 T series – These units are Fixed Percentage Distribution Units that provide a fixed monthly distribution based on an annual distribution rate of 6%. Distributions may be comprised of net income, net realized capital gains and/or a return of capital. The monthly amount is determined by applying the annual distribution rate to the T Series Fund’s unit price at the end of the previous calendar year, arriving at an annual amount per unit for the coming year. This annual amount is then divided into 12 equal distributions, which are paid each month.}

^{2 Standardized Performance: ZBAL.T, BMO Balanced ETF (T6 Series) 1 Year: 15.91%, Since Inception: 5.96% as of August 30th, 2024.
ZGRO.T, BMO Growth ETF (T6 Series) 1 Year: 18.78%, Since Inception: 14.61% as of August 30th, 2024.}

^Disclaimer:

^{This article has been sponsored by BMO ETFs.}

^{All investments involve risk. The value of an ETF can go down as well as up and you could lose money. The risk of an ETF is rated based on the volatility of the ETF’s returns using the standardized risk classification methodology mandated by the Canadian Securities Administrators. Historical volatility doesn’t tell you how volatile an ETF will be in the future. An ETF with a risk rating of “low” can still lose money. For more information about the risk rating and specific risks that can affect an ETF’s returns, see the BMO ETFs’ prospectus.}

^{This article is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Particular investments and/or trading strategies should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance.}

^{The viewpoints expressed by the author represents their assessment of the markets at the time of publication. Those views are subject to change without notice at any time. The information provided herein does not constitute a solicitation of an offer to buy, or an offer to sell securities nor should the information be relied upon as investment advice. Past performance is no guarantee of future results. This communication is intended for informational purposes only.}

^{Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although such statements are based on assumptions that are believed to be reasonable, there can be no assurance that actual results will not differ materially from expectations. Investors are cautioned not to rely unduly on any forward-looking statements. In connection with any forward-looking statements, investors should carefully consider the areas of risk described in the most recent prospectus.}

^{Distribution yields are calculated by using the most recent regular distribution, or expected distribution, (which may be based on income, dividends, return of capital, and option premiums, as applicable) and excluding additional year end distributions, and special reinvested distributions annualized for frequency, divided by month end net asset value (NAV). The yield calculation does not include reinvested distributions. Distributions are not guaranteed, may fluctuate and are subject to change and/or elimination. Distribution rates may change without notice (up or down) depending on market conditions and NAV fluctuations. The payment of distributions should not be confused with the BMO ETF’s performance, rate of return or yield. If distributions paid by a BMO ETF are greater than the performance of the investment fund, your original investment will shrink. Distributions paid as a result of capital gains realized by a BMO ETF, and income and dividends earned by a BMO ETF, are taxable in your hands in the year they are paid. Your adjusted cost base will be reduced by the amount of any returns of capital. If your adjusted cost base goes below zero, you will have to pay capital gains tax on the amount below zero.}

^{Cash distributions, if any, on units of a BMO ETF (other than accumulating units or units subject to a distribution reinvestment plan) are expected to be paid primarily out of dividends or distributions, and other income or gains, received by the BMO ETF less the expenses of the BMO ETF, but may also consist of non-taxable amounts including returns of capital, which may be paid in the manager’s sole discretion. To the extent that the expenses of a BMO ETF exceed the income generated by such BMO ETF in any given month, quarter, or year, as the case may be, it is not expected that a monthly, quarterly, or annual distribution will be paid. Distributions, if any, in respect of the accumulating units of BMO Short Corporate Bond Index ETF, BMO Short Federal Bond Index ETF, BMO Short Provincial Bond Index ETF, BMO Ultra Short-Term Bond ETF and BMO Ultra Short-Term US Bond ETF will be automatically reinvested in additional accumulating units of the applicable BMO ETF. Following each distribution, the number of accumulating units of the applicable BMO ETF will be immediately consolidated so that the number of outstanding accumulating units of the applicable BMO ETF will be the same as the number of outstanding accumulating units before the distribution. Non-resident unitholders may have the number of securities reduced due to withholding tax. Certain BMO ETFs have adopted a distribution reinvestment plan, which provides that a unitholder may elect to automatically reinvest all cash distributions paid on units held by that unitholder in additional units of the applicable BMO ETF in accordance with the terms of the distribution reinvestment plan. For further information, see the distribution policy in the BMO ETFs’ prospectus.}

^{Index returns do not reflect transactions costs, or the deduction of other fees and expenses and it is not possible to invest directly in an Index. Past performance is not indicative of future results.}

^{The Index is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”), and has been licensed for use by the Manager. S&P®, S&P 500®, US 500, The 500, iBoxx®, iTraxx® and CDX® are trademarks of S&P Global, Inc. or its affiliates (“S&P”) and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”), and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by the Manager. The ETF is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the Index.}

^{The ETF referred to herein is not sponsored, endorsed, or promoted by MSCI and MSCI bears no liability with respect to the ETF or any index on which such ETF is based. The ETF’s prospectus contains a more detailed description of the limited relationship MSCI has with the Manager and any related ETF.}

^{Commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the ETF Facts or prospectus of the BMO ETFs before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Exchange traded funds are not guaranteed, their values change frequently and past performance may not be repeated.}

^{For a summary of the risks of an investment in the BMO ETFs, please see the specific risks set out in the BMO ETF’s prospectus. BMO ETFs trade like stocks, fluctuate in market value and may trade at a discount to their net asset value, which may increase the risk of loss. Distributions are not guaranteed and are subject to change and/or elimination.}

^{BMO ETFs are managed by BMO Asset Management Inc., which is an investment fund manager and a portfolio manager, and a separate legal entity from Bank of Montreal.}

^{BMO Global Asset Management is a brand name under which BMO Asset Management Inc. and BMO Investments Inc. operate.}

^{“BMO (M-bar roundel symbol)” is a registered trademark of Bank of Montreal, used under licence.}

As Canadians, we don’t have many options when it comes to investment services. 

So, I took it upon myself to have a look at one of Canada’s leading investment platforms, along with one of Canada’s fastest growing in recent times, Motley Fool and Stock Trades Premium.

Both the Fool and Stock Trades offer a Premium subscription service whereby investors can sign up for an annual fee – is paying for these investment services worth it? 

Let’s compare these two leading Canadian investment services, because they have enough differences that make them completely unique platforms.

Let’s start with the basics, website navigation and move our way through both platforms.

Stock Advisor Canada Vs Stocktrades Premium Review

When looking at Stock Advisor Canada and Stock Trades Premium, the platforms are directed at Canadian investors who are looking to either start building a portfolio, or earn more from their current portfolios.

While Stock Advisor Canada focuses on Canada and U.S. stocks, Stocktrades Premium is a platform that exclusively focuses on the Toronto Stock Exchange and Canadian stocks. This is the only platform in the country that does this, and as a result, it has gained a ton of popularity over the two years it’s been around.

Website Navigation

When it comes to an online service, ease of use and online navigation is incredibly important. When members first log in, members are greeted by two very different dashboards.

Immediately, StockTrades slicker and more modern platform is noticeable. The platform is simple to navigate and very intuitive. You get all the important information up front on the Dashboard, and you can immediately get caught up on any new information.

The Fool’s dashboard looks like a typical ‘blog’ site. Although not necessarily a bad thing, it does look dated and you have to go searching for most of the information.

Outside of the Dashboard and the look of the sites, navigation is pretty self explanatory on both sites.

If someone were to ask me what website would get me where I need to be faster, Stocktrades is the clear winner here.

Verdict: StockTrades edges out the Fool thanks to its modern design and informative Dashboard.

Similar features

Let’s get into the specifics of what the services offer. These platforms are very different, however they both have a few similarities at their core that I’m going to discuss.

Beginner stocks

Both services offer a basket of stocks tailor made for a beginner investor. These are intended to be strong ideas for those just starting out or new to investing. Stocktrades titles their 10 annual picks “Foundational Stocks” while Motley Fool has no specific name.

Out of respect for the effort and research put into these ideas, I will not comment on the picks themselves outside of the fact they were well thought out and presented on both sites. 

Neither site tracks the performance of their beginner stocks. Although Stocktrades Premium has stated they will release and track returns on an annual basis.

Verdict: Tie – nothing in this area sets either service apart.

Top picks

With an investment service, naturally investors will be looking for top picks. You’d think it would be a simple explanation, but the delivery and detail of these top picks are very different.

The Motley Fool’s “Recommendations”

They offer 1 Canadian recommendation and 1 U.S. recommendation per month.

One of the issues that present itself with the Fool is the confusion around these recommendations. 

It was not immediately clear to me if every pick on the list was still a buy and although they have taken steps to clean up their list by introducing categories, it still was a very confusing experience for me.

Compounding the issue, once a stock is recommended there are no consistent updates provided by the team. 

As I navigated the list, many had not had an update since the original recommendation. In some cases, it had been more than a year since the last update.

As someone who is looking for guidance on what stocks to buy, looking at a year old report doesn’t exactly provide me with a ton of confidence.

Overall, it was a very difficult list to navigate and members are left to discuss among themselves (in the forums) whether previous recommendations were still in fact buys.

In terms of the company reports, these are once again structured like a blog post. Although quality is not an issue, the presentation of these reports lack consistency and varies from company to company. 

At times, I could easily see it being overwhelming for beginners. It is unclear how these picks are made exactly, but they appear to be a mix of growth, value and income plays.

They have their list of historical picks and display a running average all-time return. You can also see the individual’s pick’s performance in relation to the TSX Index.

Stocktrade’s “Bull List” picks

At Stock Trades, the top ideas take the form of what they like to call “Bull Lists”, which take the form of the Growth and Dividend Bull Lists.  

They also add two TSX-listed stocks a month to their Bull Lists, one growth and one income. One particular thing I noticed is that the Motley Fool charges a separate subscription fee for income stocks. So, this was a huge positive for me.

Their lists and investment thesis behind them are quite clear. 

Those on the Growth Bull List are added as a result of strong growth prospects. Those on the Dividend Bull List are added with income in mind.

Unlike the Fool’s top recommendations, the team at StockTrades is diligent in their updates. Each report is updated quarterly, within days of the latest quarterly report. 

And, I was pleasantly surprised to see a recent email about a stock they’ve decided to remove from their list due to what they felt was an excessive run up in price.

This gave me confidence in the idea that they truly do mean that if a stock is on one of their Bull Lists, they still have confidence in it. 

They have a unique and well-structured format for both types of Bull List stocks (Growth & Dividend). They are easily digestible by both experienced and beginners alike and the investment thesis is made clear.

Furthermore, each report is supported by their unique ranking system (more on that later). There is no confusion around the list – if a company is on the Bull List, then they believe in the long-term prospects of the company.

Where Stocktrades comes up short, is in keeping a visual running tally of the performance of each of their Bull List picks. 

Although they keep members informed via monthly updates, it is not front and centre on the site itself. The results are there, but a bit of digging is required.

Verdict: StockTrades with a slight edge – Surprisingly, both the Fool and Stocktrades have similar outperformance metrics relative to the TSX Index. And by the way, the results are honest, from both platforms.

However, the Motley Fool runs a bit of a different system as they tend to “double down” on their losers, which gives the illusion that a stock they’ve highlighted has gone up in price, when in reality it could still very well be a losing highlight since they first mentioned it.

Stock Trades on the other hand, tracks a pick against their results indefinitely, regardless of price movement or if they’ve removed it from their lists.

Both offer two stocks a month, and the research behind each is sound. So why does Stocktrades come out on top?  

Two reasons. First, the Stock Trades reports are more engaging and can appeal to investors of all types. 

Secondly, and more importantly, StockTrades is committed to updating each report quarterly, there is nothing stagnant on the site. As a result, there is no confusion around which stocks they consider to be good opportunities today. 

Question and answer segment

Once again, not surprised that both had a Q&A section where members could ask questions. 

However, the quality of the Q&A sites was vastly different. 

While the Fool has an active forum, many of the questions are answered by members themselves. It also can take days, if not longer to receive a response directly from the Fool team.

In contrast, I’ve never waited longer than 24 hours to receive a response from either Mat or Dan. And, the vast majority of the answers went above and beyond what the members question was initially about.

The one thing I did notice was that on Stock Trades Q and A, there was next to no member to member communication. Which, in my eyes, is a positive. 

I don’t doubt that both platforms have some relatively experienced investors, but if I’m paying for an investment platform, I want answers from the brains behind the operation.

In my opinion, Motley Fool’s Q&A platform comes well, well short of Stock Trades Premium. In fact, I would argue in many instances that the Q&A over at Stock Trades Premium is worth the price of admission alone.

The only reason I don’t give it a 5/5 is the fact that sometimes the navigation can be a pain, as all of the buttons like back, forward, edit etc. are found inside of the website. Clicking back on the browser window doesn’t work. It’s taken some getting used to.

This is where the similar features end

That is about all that the Motley Fool and Stock Trades Premium have in common. Both offer stock picks, and a question and answer segment. However, even though these are similar features, as you’ve read, how they’re handled is very different.

But now, let’s move onto the features that are unique to Stock Trades Premium. 

And be aware, there are a ton of them.

Stocktrade’s Dividend Safety Screener

This was a feature I found incredibly useful over the course of 2020, especially navigating a stock market where dividend cuts were happening all over the place.

Stocktrades has an in browser stock screener that analyzes the quality of a company’s dividend. The companies are then ranked on a grade of 0-5 and updated every single week. 

The tables are easily sortable, readable on both mobile and desktop (although a little clunky on mobile) and from a single page I can see dividend growth streaks, growth rates, payout ratios in terms of earnings and cash flows and more.

Stocktrade’s Growth Stock Screener

These guys call their growth stock screener the “backbone” of their whole service, and it essentially ranks Canadian stocks on their forward growth potential.

They say the screener ranks stocks on safety, growth and valuation, and spits rankings out on a weekly basis.

In turn, they e-mail out the stocks their screener highlights on a weekly basis. One thing you won’t be left without is constant e-mail contact from the guys at Stock Trades.

More impressively, at the time I’m writing this they say their screener has outperformed the TSX index in over 83% of the weeks they’ve been tracking it. I verified this, as they have all of the data available, and it is correct.

Custom stock research on request

This is something I am truly amazed they have time for. But, you can request an in-depth report from the guys at Stock Trades. This isn’t an add on, this just comes with your membership. One a month, however.

But, the one report I did request, I received within 4 business days and it was in just as much detail as a Bull List report. All of these reports are available to all members as well.

9 Model portfolios

I’ve never followed Stocktrades model portfolios, but there’s no doubt they’re outperforming in a big way. They’ve got 9 portfolios, all aligned with different age groups, risk tolerances etc.

As I’m writing this, all 9 of them are outperforming the TSX since inception, with a couple portfolios posting over 100% gains since December of 2018. Impressive, considering the crash and all.

IPO Centre

This is a new feature they’ve introduced over at Premium (they’re constantly adding new features) and it highlights all of Canada’s major IPOs. They dive into news, produce stock reports on recent IPOs and are constantly answering questions on them via the IPO.

They invest in the IPO’s themselves as well, and are fully transparent about doing so. All they state is that you should be doing so with capital you can afford to lose. You won’t see any IPOs on their Bull Lists, due to the high risk nature of them, but this is a really cool feature nonetheless.

Marketing and upsells

This is a critical component for me. When I purchase something like this, I do expect to have access to the full platform.

With Stock Trades, marketing is completely transparent. You sign up, and you get absolutely everything they’ve indicated inside the platform. They promise, under no circumstances will you be upsold to another more expensive platform once they’ve got you in the door.

Motley Fool on the other hand, after a few days of being inside of Stock Advisor Canada, I was hit with upsells. More expensive platforms offering more explosive stocks.

The issue I had with this right away, is the fact they promised me the most explosive stocks for the initial price I paid.

There is a type of “get rich” style atmosphere with a lot of the content Motley Fool produces, and pitches to prospective and current members, including the fact they just have to pay a little more to finally get there.

I don’t get this with Stock Trades. 

In fact, once I got inside of Premium the only emails I ever received were helpful emails to navigate the platform, e-mails about tutorials, new stocks, strategies and other Premium related content.

Price

Let’s get down to the brass tacks shall we? Pricing.

Pricing is huge when it comes to the selection of an investment service. A platform can make you money, but it needs to be able to cover the costs of the platform and also help you earn a positive return. 

If it doesn’t, you’re better off giving your money to a fund manager.

Stocktrades Premium comes in at $249.99 a year. I was given an initial 30% discount so I got in for around $175. Stock Trades states that the price you pay when you sign up (full price) is the price you’ll always pay, if they decide to raise prices.

And, this isn’t an empty threat, the company went ahead and raised its service from $199.99 to $249.99 this past October. So, those who got in before October were locked in to the $199.99 rate.

The Motley Fool’s pricing structure is just downright confusing to be honest. Prior to signing up, I was hammered relentlessly with random discounts that “only lasted 24 hours”.

Typically, they offer their platform for $99 for the first year. They say this is $200 off, so you’d think that the platform would cost $299 annually right?

Wrong. It’s actually only $199. So, they’re essentially stating their membership is worth more than it is, to make you think you’re saving more.

Overall, the extra $50 for Stock Trades Premium is well worth the cost, especially considering the plethora of extra features. However, I’m going to give a tie to both, as they’re both extremely affordable.

Stock Advisor Canada Vs Stock Trades Premium final verdict

Overall, these are both two solid services for long term investors who don’t have the time to do the research, don’t have the knowledge, or need some extra tools.

But overall, I have to give a large edge to Stock Trades. While the Motley Fool labels themselves as a stock picking service, Stocktrades Premium is a complete investment platform, and I’ve found myself logging in multiple times a week to use their tools to better my portfolio.

With the Motley Fool, I’ve essentially read their stock picks when they were emailed to me, and that’s that. They don’t really offer much more than this.

The information on Stock Trades Premium is updated frequently. I have significantly more confidence using their information over the Fools. I’ve seen some reports on Stock Advisor Canada that were more than a calendar year old. The oldest report from a stock pick you’re going to get on Premium is 3 months.

You pay $50 more a year for Stock Trades Premium, but that $50 is easily justified by the amount of features they offer.

Looking at Motley Fool’s other services, they charge separate subscriptions for dividend picks, IPO research and model portfolios. 

So if you include what you would have to pay with Motley Fool compared with what you get at Stock Trades Premium, you’d be paying thousands at the Motley Fool.

The guys over at Stock Trades claim to have started the service and website because of a lack of quality Canadian stock information. For years the landscape has been dominated by sites like the Motley Fool. 

In my eyes, they’re doing a hell of a job. I’m going to be picking one service to renew next year, and it will be Stocktrades Premium.

***

“Will I be OK in Retirement?”

“Do I really need $1.7 Million to retire?!”

“When do I have to start worrying about this stuff – will I ever be financially prepared for full retirement?

In response to questions like this, most mutual fund salespeople from major Canadian financial institutions (you can usually find them in big banks and strip malls) generally respond something along the lines of:

“Look, investing is the key here. Saving more is always better. Look at this chart – now here’s another chart that shows how awesome your life would eventually be if you saved more. Finally, here’s a third – really fantastic chart – and it shows that you’ll have [fill in # of millions here] if you invest with us, because we pick by far the best investments. After all, we help thousands of Canadians across the country everyday, we’re pros at this stuff.”

As we circle back to ‘RRSP Season’ each year the annual ritual of meeting with a financial advisor begins anew. In these meetings, amidst the complimentary coffee and casual conversations about family, local weather, or the latest in local sports, the conversation is inevitably steered back to investments. Here, complex financial jargon is often exchanged, assurances given, and the cycle, invariably, continues.

All the while, 2%+ is being funneled out of the client’s entire nest egg, and into the company’s earnings.

I know I’m not the first person on Money We Have to point out that Canada’s actively-managed mutual fund options kind of suck. But given that there is still over 5x as much money in Canadian mutual funds as there is in ETFs, I don’t think the message is getting through to too many people.

Wait – Who Is This Guy Again?

My name is Kyle Prevost, and I’m the high school teacher your retirement plan wishes you’d had back in the day.

Big thanks to Barry for giving me a space to talk to Canadians about everything from withdrawal rates to RRIFs!

I’ve been writing and talking about personal finance in Canada for 16 years. You might have seen Barry and I chatting at the Canadian Financial Summit, and read some of my writing at Moneysense or MillionDollarJourney.ca over the years.

And after 16 years, my newest project is the one I’m most proud of. It’s simply the most complete and well-researched resource that I’ve ever created.

I’m talking about the first ever online course for Canadians looking to get their retirement plan on track – whether retirement is two decades into the future or set for next year. Whether those golden years involve days on a beach, or leans more toward part-time work and travel – I’ve got you covered.

It’s called 4 Steps for a Worry Free Retirement – and you can find it here.

I’ve Read Some Articles and Investing Books – Is This Course Worth It?

Sure, there is some really solid information out there on blogs and in books. But here’s the advantages that 4 Steps to a Worry-Free Retirement has over those products.

• Everything – all in one place. No more saving specific articles to come back to. Now it’s all tied together for you in a logical order, and you can come back to the information whenever you need a refresher or want to double check something.
• It gets instantly updated. For example, I just went through and filled in all of the new 2024 tax and CPP/OAS information. Any book you buy is out of date a few months after you purchase it.
• Passively reading something is not the best way for most people to thoroughly understand a topic. My course comes with original explainer videos, 25+ full-length interviews from the Canadian Financial Summit, a downloadable/printable workbook, and bite-sized action steps.
• Access to our online Worry-Free Study Hall. (Which is really a teacher’s attempt to name a private discussion group. It kind of looks like a Facebook discussion wall that only people in the course can see. Questions or answers can be posted anonymously. I answer all questions in this area, so that everyone can benefit from reading through other’s inquiries and even post their experiences for others to benefit from.)

How Do I Know This Thing is Any Good?

Don’t take my word for it. Hear what these Canadian personal finance experts had to say about 4 Steps to a Worry Free Retirement:

• Here’s a podcast with longtime Toronto Star columnist and university instructor Ellen Roseman – who thoroughly reviewed the course.
• If you are still in a podcast state of mind, I chatted with Kornel Szrejber on the Build Wealth Canada Podcast and Mike Heroux on The Dividend Guy Podcast.
• Multi-decade retirement expert from Moneysense and the Financial Post, Jonathan Chevreau also took a look. You can read his review here.
• I was even on the TV show Money Matters with Mike Braga. You can check out the episode here.

Here’s what fee-only financial planner and columnist Jason Heath (of Objective Financial Partners) had to say about the course. “Kyle’s course can be a great resource for someone preparing for retirement or already retired. There is no single “right” way to manage your finances, but what he does is distill many best practices into plain English for a layperson to help them figure out what is right for them. His background as a teacher definitely comes across in the course. Too many financial industry people do a poor job of conveying financial topics in a way that makes sense. The approach of the course is meant to teach and empower, and it definitely does just that.”

So How Much Does This Thing Cost Anyway?

In exchange for creating a resource that took thousands of hours to research and create, plus the commitment to keep updating the course AND the promise to answer your specific questions – the price tag is 500 bucks.

But – for the first 20 Money We Have readers who sign up, I’m going to take a hundred bucks off the price tag. The promo code is: money100 – make sure and click “Have a Coupon” on the order screen here, and then type in: money100

Hey, I’m aware that $400 is a lot of money. It’s about half the cost of a university course these days.

If you look through this course and can honestly say that you don’t think it’s twice as useful as any university course out there – I’ll give you your money back. Look, I’m not here to make a quick sale. If you’re not happy with the purchase, I don’t want you going around telling everyone that I’m a jerk. It’s really simple, if you don’t think the quick tax wins alone won’t easily save you the purchase price of the course – if you don’t think it’s worth your hard-earned cash – I’ll refund your order.

That’s it.

No tricks. No hidden fees, kickbacks from big companies, or percentages taken out of your portfolio. No upsells to get to the “second magical VIP tier where you’ll get the REALLY good stuff”. Just a simple upfront price tag for a resource that I stand behind 100%.

Can I Get a Few Details About What’s In the Course?

You can check out the course website here to get a full sense of everything that is included.

But just to whet your appetite, here’s a sneak peak of the topics covered:

• How Much Do I Need to Retire?
• How Much Will My CPP Payment Be?
• How Much Will My OAS Payment Be?
• Decoding Private Pension Plans
• Safe Withdrawal Rates and the 4% Rule
• Working In Retirement
• What Should I Invest In?
• How to Buy and Sell Your Investments
• Decumulation: Withdrawing From Your RRSP, TFSA, and Other Accounts
• RRSP to RRIF Transitions
• Annuities – Buying a Pension
• Can You Retire With a Mortgage?
• Downsizing vs Reverse Mortgage vs HELOC
• Long Term Care Insurance
• Life Insurance in Retirement
• Retire Sooner with More Sunshine
• Bonus Resources (including a handy retirement-specific tax breaks checklist)

I just want to quickly reiterate two things:

1. There is no risk in trying the course. It has a money-back guarantee.
2. The first 20 people to use the coupon code: money100 get a hundred bucks off.

Help Me Beat “Big Mutual Fund”

So I’m getting out of my comfort zone here and trying to be the type of self promoter that effortlessly communicates how their product will really make a difference in someone’s life.

The problem is that it’s harder than it looks. The world is so packed with people trying to sell you the latest “silver bullet” that will magically solve all of your problems – that’s it’s hard to “break through” with a really solid resource that can make a difference in people’s lives.

I’m a teacher – not a salesman.

4 Steps to a Worry-Free Retirement is not a magical silver bullet. 

I don’t have “the one simple secret” that will solve all of life’s problems.

The heart of this course is simply about offering a helping hand to folks. I wrote this course as if I was writing it for my own parents – middle class Canadians who had some idea of what they wanted in retirement, but certainly had more questions than answers.

In addition to writing thousands of articles and conducting 500+ interviews of Canadian experts over the last decade-and-half, I read dozens of books and hundreds of articles in order to make sure the info in this course was unassailable. I endured the humbling process of asking experts to give me feedback. And, at the end of the day, I know that this course can really, really help a lot of Canadians – but only if they find out about it first!

So I’m hoping that you’ll consider clicking here to check out the course, and if you think it looks like it’s worth someone’s time, I would be sincerely thankful if you let someone else know.

One thing I’ve learned about trying to get the word out about something online: We’re all much more likely to trust a product or service if it comes from our friends, as opposed to a Google Ad or a paid influencer. Barry allowed me to reach out to you all because we trust each other. In a similar vein, if you’d reach out to a friend and say, “Hey, there’s this nerdy business teacher who spent way too much time writing about how Canadians can have their best retirement – you should check this out” – I’d be sincerely thankful.

Thanks in advance for your effort and consideration!

I’ve got a spot saved for you in my virtual classroom – so don’t forget to use the money100 coupon code, as only the first 20 signups get this special introductory rate.

**

Many Canadians are aware that you can open a U.S. dollar bank account at most Canadian financial
institutions. But did you know that you can also open a U.S. dollar investment account through many
different investment companies? The following are reasons why you may wish to consider opening a
U.S. dollar investment account.

Reduce the cost of U.S. dollar conversion

Every time that you convert Canadian dollars to U.S. dollars (or vice versa), you will pay a fee to the
financial institution that makes the conversion for you. That fee is known as the currency spread, and
can usually be noticed by looking at the difference between the “bid” and the “ask” prices displayed by
the financial institution. For example, if the current spot exchange rate is quoted as $1.35 Canadian for
each U.S. dollar, the bid (or price that you will receive for selling U.S. dollars) might be $1.32 and the ask
(or price that you must pay to purchase U.S. dollars) might be $1.38. So, every time you buy or sell U.S.
currency you lose 3 cents per dollar. If you are regularly converting currency, that becomes very
expensive!

Buying or selling U.S.-listed securities in a Canadian dollar investment account is a common example of
Canadians paying unnecessary currency conversion costs, allowing the broker to pocket the currency
spread on buys and sells, dividends or interest paid. The more that you buy and sell, the more that you
lose. These costs can be eliminated by simply owning your U.S.-listed securities in a U.S. dollar
investment account, since there is no need to convert currency on every transaction.

Hedge the impact of currency exchange rates

Have you ever felt like you had to limit your spending on travel to the U.S. because the value of the
Canadian dollar was depressingly low? Or how about not ordering that item located in New York on
eBay because it was priced in U.S. dollars, which made it too expensive? The value of the Canadian dollar
relative to the U.S. dollar has fluctuated greatly over time. In the past few decades alone, the exchange
rate has ranged from more than $1.60 Canadian per U.S. dollar to less than $1.00 – yes, the Canadian
dollar has, on occasion, been worth more than the U.S. dollar!

But why leave it to chance? If you have a portion of your investments denominated in U.S. dollars, you
can always draw from it when you need it. You won’t pay conversion costs, and the current exchange
rate should not matter because you don’t have to convert anything. For folks who require the frequent
use of U.S. dollars for business, travel, or shopping, a U.S. dollar investment account can make a lot of
sense.

For a simple illustration, consider a shrewd Canadian investor who vacations in Orlando, Florida for one
week in February every year. The typical expense for this trip each year is about $5,000 U.S. dollars. If this
investor opened a U.S. dollar investment account and invested $100,000 U.S. dollars in an income-
oriented investment portfolio that consistently earns 5% per year. This investor should never have to
worry about exchange rates or conversion costs since $5,000 U.S. dollars can easily be withdrawn every
year!

Eliminate PFIC reporting (for U.S. citizens living in Canada)

Unfortunately for U.S. citizens living in Canada, Uncle Sam requires you to continue filing U.S. income tax
returns. Also, unfortunately, the I.R.S. requires additional reporting requirements for Passive Foreign
Investment Corporations (PFICs), which may result in additional taxes owing. If you own any mutual fund
or exchange traded fund issued by a Canadian company, it is considered a PFIC. Regulations require that
all mutual funds purchased in Canada, must be issued by a Canadian company. Unless you enjoy the
extra reporting requirements, this can be problematic for some investors.

Fortunately, however, this is a reasonably easy solution to the problem: invest in U.S.-traded exchange
traded funds in a U.S. dollar investment account. While you cannot buy U.S. mutual funds in Canada,
you can buy U.S. exchange traded funds and they are not considered PFICs. Problem solved!

Not all investment firms will offer U.S. dollar investment accounts, or have expertise in managing U.S.
dollar-based investments. Justwealth is able to offer U.S. dollar accounts for just about every account
type: RRSP, RRIF, LIRA, TFSA, and non-registered. Furthermore, Justwealth offers more U.S. dollar
portfolio options than most firms have available in Canadian dollars!

Basically, an RESP is a a type of account that can be used to help you save for your child’s education. As an added incentive, the government gives you an RESP grant of 20% of your contributions. There’s also some tax benefits which is why an RESP is the best way to save for your child’s post secondary education.

Registered Education Savings Plan Rules

When it comes to setting up your Registered Education Savings Plan, there are some basic rules you’ll want to understand.

• An RESP can be set up for any “beneficiary” including your children, grandchildren, or family friends
• The beneficiary must be a Canadian resident and have a Social Insurance Number
• There’s a lifetime RESP maximum of $50,000 per beneficiary
• You can get a 20% match up to $500 per year thanks to the CESG
• You can contribute to an RESP up to 31 years and the plan can remain open for a maximum of 35 years
• An RESP can hold a variety of investments including mutual funds, ETFs, stocks, bonds and GICs
• Capital gains are tax-free while it is in your RESP
• You do not get a tax refund for RESP contributions
• Money withdrawn from the RESP as an Educational Assistance Payment is taxed in the hands of the beneficiary

Although some people think the RESP rules can be complicated, as you can see from above, it’s pretty straightforward. I realize some of you may still be confused, but I’m going to breakdown things even further so you really understand how RESPs work.

Types of RESP in Canada

When I refer to the types of Registered Education Savings Plan, what I mean is the type of plan you get create or setup. These are the three types of RESPs in Canada you need to know about:

Non-Family Plan

When setting up an RESP for their first child, most people opt for the non-family plan. By doing this, the RESP is managed for the individual child. What’s nice about this option is you can set your investments to line up with the timeline of the beneficiary without having to worry about your choices affecting any other beneficiaries.

Family Plan

Some parents like family plans since it allows multiple beneficiaries as long as they’re related by blood or adoption by the subscriber (the person who set up the RESP). With this type of plan, you’re dealing with one big pot of money so you can allocate funds as needed. However, since you’ll have multiple children in the plan, you may need to be more conservative with your investments.

Group Plan

In my opinion, group plans should be avoided. They’re attractive since they can give your children a defined payout, but there are so many conditions and rules that there’s no guarantee you’ll get what you were promised. Seriously, if you google RESP group plans in Canada, you’ll probably quickly find many horror stories.

RESP investment options

As mentioned above, your Registered Education Savings Plan is basically an investment vehicle which allows you to put a variety of investments within the account such as:

• GICs
• Bonds
• Mutual funds
• ETFs
• Stocks

Since this is for your child, many people think investments that aren’t risky are the way to go. That’s a good thought, but if you set up your child’s RESP when they’re born, it’ll be 16-18 years before they need that money. That’s plenty of time to grow your child’s RESP so you have a balanced portfolio to reflect that time line.

Do-it-yourself investors won’t have an issue with this, but people who are new to investing may be a bit terrified about all of this. As a result, most investment firms have a mutual fund option which automatically re-balances the portfolio based on your child’s estimated first year of their post-secondary education. This is a decent option, but the management expense fee is typically 2.5% or higher which is quite expensive.

Another (and likely better) option is to use a robo-advisor that does the same thing but charges much lower fees. I like Justwealth’s RESP portfolios since they use target dates but charge much lower fees compared to many other financial institutions. Clients will be charged the minimum monthly fee of $2.50 per month OR the 0.5% annual fee (never both), whichever one is greater.  To help you get started, you’ll get $50 for free when you open an RESP with Justwealth via my referral link.

Canadian Education Savings Grant (CESG)

What really makes an RESP appealing is the RESP grant which is formally known as the Canadian Education Savings Grant or CESG. This grant gives the beneficiary a 20% match up to $500 per year. That means if you contribute $2,500 per year to your child’s RESP, you’ll get another $500 for free. Alternatively, if you contributed $2,000, your child would get $400.

The government realizes that you may not have $2,500 just lying around every year so they allow you to carry the grant over for one year. In other words, you can skip contributions one year and then make a deposit of $5,000 the next year and still get the full $1,000 CESG grant ($500 X 2). As you’ve probably guessed, you can’t contribute $25,000 one year and then expect to get 10 years worth of RESP grants.

Keep in mind that there’s a lifetime CESG grant of $7,200 up to the age of 18 so your child could reach that limit when he or she is 14 if you opened an RESP the year they were born.

RESP grant for lower income families

As an added incentive, lower income families can get up to an additional $100 each year from the CESG. Families with a household income under $50,197 get a 40% match on the first $500 in RESP contributions and then 20% on all contributions up to $2,500. That would give them a yearly RESP grant of $600

If your household income falls between $50,197 and $100,392, then your beneficiary would get a 30% match on the first $500 contributed to their RESP. All other contributions up to $2,500 earn you a 20% match. Families in this circumstance would get a total of $550 per year from the CESG.

As an additional incentive, low-income families may qualify for the Canada Learning Bond. This program gives your child up to $2,000 in RESP contributions without you having to deposit any funds.

Note that the income brackets change yearly based on the adjusted family net income level shown on your tax return for the previous tax year. Regardless of your income, the lifetime CESG limit is $7,200.

RESP Withdrawal rules

When your child is ready to make RESP withdrawals, there are two scenarios to consider:

When the funds are used for their education – Upon enrollment of a qualifying post-secondary school, you can withdraw funds from the RESP as long as you can provide proof of enrollment. Any payments made including the grand and/or bonds are referred to Educational Assistance Payments (EAPs) which the student must claim as income when they file their taxes. Since most students will have little to no income, the money withdrawn from their RESP is usually tax-free. You can even use your RESP if you’re studying abroad.

When the funds are withdrawn and not used for education – If your child decides not to continue their education, you can still withdraw your initial contributions without having to pay any taxes. That being said, any interest and capital gains (known as accumulated income) will be taxed at your income level, plus another 20%.

In addition, you can transfer the CESG from the child who is not continuing their education to a brother or sister if they have grant room available. If this isn’t an option, the CESG and any bonds must be returned to the government.

When you finally close the RESP, you can reduce the amount of taxes you pay by transferring your accumulated income (up to $50,000) to your or your spouse’s RRSP. This is only possible if you have enough contribution room. For more details on what happens to unused RESP? Check out this post.

Final thoughts

If you want to help your child with their post-secondary education, there’s no better way than setting up an RESP. The 20% match you get from the CESG is free money and it’s guaranteed! Even if your child decides not to continue their education, you won’t lose the money you initially contributed. Use my Justwealth referral link now and get $50 when you open an RESP with them.