**This post is sponsored by RBC InvestEase Inc. All views and opinions expressed represent my own and are based on my own research of the subject matter
Are you looking into robo advisors and investing but don’t know where to start? Although robo advisors are becoming more and more popular across Canada, some people still are a little wary of the concept, mostly because of the name.
Before we start with this RBC InvestEase review, let’s make it clear that robo advisors are not robots (even though the name makes it sound like they are). While the investing process is automated by an algorithm, that same algorithm is both created and monitored by financial experts and professionals who are also available to answer any questions and handle customer service requests.
Robo advisors are meant to help make the investing process easier. They are the ideal option for those looking for a ‘set it and forget it’ strategy when it comes to saving for their retirement. In addition, robo advisors have low fees, making them ideal for all types of investors from beginners to those who are experienced.
With so many robo advisor options out there, some people may prefer to go with a major bank. In this RBC InvestEase review, I’ll cover what the RBC robo advisor has to offer and what makes it stand out in comparison to other robo advisors in Canada. Here’s everything you need to know about RBC InvestEase.
RBC InvestEase Accounts
RBC InvestEase has three main types of accounts that investors can choose from:
- Tax-Free Savings Account (TFSA)
- Registered Retirement Savings Plan (RRSP)
- Non-Registered Investment Account
Getting started with RBC InvestEase is simple and can be done in three easy steps. First, you’ll fill out a small questionnaire about your age, investment timeline, how much you want to invest, why you want to invest, and the level of risk you are willing to take. After submitting this questionnaire, RBC will recommend an investment plan based on your answers with portfolios comprised of carefully-selected ETFs. If you like the recommendation, then your final step is to open your online account. It’s that easy, the entire process can be done from the comfort of your own home.
As you deposit funds into your accounts, RBC InvestEase will automatically start investing on your behalf. They’ll make the fund purchases and any rebalancing will also be taken care by them. You can, of course, check the performance of your portfolio at any time by simply login into your account. Best of all, there’s only a minimum account requirement of $100 for you to get started.
RBC InvestEase Fees
The management fee for RBC InvestEase is a flat fee of 0.5% per year, no matter the size of your portfolio. Some other robo advisors offer tiered fees but since RBC InvestEase uses a flat fee, it will be easier to understand for new investors. Even as your investment grows, you’ll only pay 0.5% in management fees which is attractive.
Of course, you will need to remember that on top of the management fee (0.5%), you will have to pay the management expense ratios (MERs) included in the ETFs your account invests in. According to the RBC website, MERs range from 0.11%-0.30% which means that you can expect your total annual portfolio fee to be around 0.61%-0.80%. That’s significantly lower than the fees you would pay for a typical mutual fund.
RBC InvestEase Responsible Investing Portfolios
One of the stand-out features of the RBC robo advisor is their Responsible Investing Portfolios which is a very attractive option for those who prefer to be sustainable investors.
So, what exactly is Responsible Investing? Responsible Investing focuses on companies and their ESG risks. ESG stands for Environmental (such as carbon emissions and water management), Social (such as workplace health and safety and labour management), and Governance (including tax transparency) risks. With RBC Responsible Investing, your portfolio will focus on ETFs that include companies with high ESG factors and remove companies involved in major controversy, tobacco businesses, and any companies linked to weapons and civilian firearms.
While the idea behind responsible investing is nothing new, there are limited choices and some people fear that their investments could be hurt by adopting this strategy. However, RBC InvestEase takes pride in their selection of companies with high ESG factors and stands by the belief that long-term, responsible investing shouldn’t result in lower returns (after fees) in comparison to a standard portfolio. As such, management fees stay the same (0.5%), however, the ETF MERs do tend to be a little higher.
In the end, the choice is up to you. The end goal of RBC’s InvestEase Responsible Investing Portfolios is the same as their standard portfolios: to help clients reach their financial goals.
RBC InvestEase Review
RBC InvestEase has created a platform that Canadians have been asking for and are ready to deliver as one of the best robo advisors in Canada.
While RBC InvestEase may not have hundreds of account options to choose from, they are differentiated from other robo advisors with their responsible investing portfolios. Although this option may not be of interest to all investors, it is a great choice for individuals who are passionate about the environment and human rights. And still, with a dynamic range of portfolio options from conservative to growth, RBC InvestEase offers a selection that meets almost all client needs.
RBC InvestEase Pros
- Flat rate management Fee of 0.5% no matter your investment amount (ideal for new investors)
- Low-cost ETF MERs
- No trading fees
- Option to use responsible investing portfolios
- Different portfolio options for all types of investors
RBC InvestEase Cons
- RBC InvestEase portfolios may be considered too conservative for more aggressive investors
- Not the cheapest robo advisor in Canada (also not the most expensive)
One thing to note, although RBC InvestEase uses RBC iShares ETFs, they’re some of the cheapest and most recognized securities on the market. That said, if you were hoping to use ETFs from another brand, that’s not possible.
How does RBC InvestEase compare to other robos?
RBC InvestEase has some good things going for it, but how does it stack up against the competition?
Let’s start with fees. While not the cheapest on the market, RBC InvestEase is actually pretty on-par with management fees from other popular robo advisors. The downfall is that there is no tiered system, so when your investments go over $100,000, you don’t get a discount on management fees that some other robos offer. MERs on ETFs are also in the same ballpark except for the MERs for SRI. You may be surprised to know that RBC has better rates for this than some of the other top robo advisors out there.
A couple of pitfalls that RBC InvestEase falls short on include account types. RBC InvestEase only offers three types of accounts while many other robos have several options. Also, RBC InvestEase doesn’t have its own app. While you can see your dashboard from the general RBC banking app, it would be much more straightforward if it had its own app.
Finally, we can’t ignore the history and reputation behind RBC. RBC is one of Canada’s leading big banks which builds a lot of trust. This is a pretty significant factor when it comes to choosing a financial institution to handle your money.
When it comes to robo advisors in Canada, some people have been attracted to ads and promotions. While robo advisors may not be for everyone, they (and RBC InvestEase) are a great choice for a variety of investors including those interested in taking a responsible approach to investing.