Curious about investing but not sure where to start? How about with a robo advisor? Robo advisors are becoming a popular way to invest in Canada thanks to how simple and easy they make the application process. While the simplicity makes robo advisors ideal for beginners, the reliable strategy they use makes them ideal for experienced investors as well.
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.
Bonus: Money We Have readers can get up to $500 for free when you sign up for Justwealth through my referral link.
Justwealth has a variety of accounts to choose from including the following:
- Spousal RRSP
- Non-Registered taxable account
- Locked-In Retirement Account
- Life Income Fund
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 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.
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
Just wealth 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 .65%-.75%
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 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 2.5%. It’s not as cheap as doing things yourself, but you’re basically paying a low fee for the convenience.
Justwealth started in 2015, but don’t let its newbie status fool you. There are decades of hands-on experience behind the creation of this Canadian robo advisor including a Certified Investment Manager, a Certified Investment Analyst, and a Certified Financial Planner. It’s a strong, knowledgeable team who are 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 manager 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 70 portfolio options using 42 different ETFs.
Justwealth’s strength is their Registered Education Savings Plan (RESP) portfolios since they 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.
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.
Of course, like any other robo advisor, Justwealth isn’t perfect. Here’s a breakdown of the main pros and cons.
- Large selection of portfolio types
- Fiduciary requirement
- Personal advice options available
- Up to $500 cash bonus offer for Money We Have readers
- Minimum investment requirement of $5000
- Website/platform isn’t quite as easy to use and understand as others
How Justwealth compares to others
So, how does Justwealth compare to other Canadian robo advisors?
Well, Justwealth definitely takes to 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 requires $1,000.
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.