robo advisor

My Experience using a Roboadvisor

So you aren’t quite confident enough to start Do It Yourself investing but you still understand the importance of beginning your investing journey. How do you get started? You could go to your bank, where they will likely put you in high-fee products and talk down to you, making investing seem too hard for you to understand. Or… You could open an account with a robo advisor in Canada.

What is a Roboadvisor?

A Robo advisor is an investing service that relies on algorithms to build a portfolio based on your risk tolerance and investment time horizon. No individual humans are picking the funds for you, so there is a lower cost, and its very easy to use for beginner investors. The service will create a portfolio for you, so you don’t need to pick stocks, just contribute to the fund and invest regularly.

What does a Robo Advisor in Canada offer?

You can invest in an RRSP, TFSA, RESP, or taxable investment account with a robo advisor. The choice is yours.

Robo advisors are often provided by companies that offer multiple types of services. For instance Wealthsimple offers Cash accounts,  savings accounts, RRSP, TFSA, RESP, a fee-free self-directed investing platform, and they also have a crypto trading platform. Their Robo advisor service is called Wealthsimple Managed Investing , the self directed investing service is called Wealthsimple Trade. You can get $25 to invest by using our links! We provide an overview of what you can invest in as a Canadian.

Another well-known company offering both robo advisor services and self-directed options is Questrade. Their Robo Advisor service is called Questwealth Portfolios.

Save on investment fees with Robo Advisors

Roboadvisor options are becoming more popular these days for people who prefer not to have actively managed investments and pay the subsequent fees that come along with humans closely managing their money. These services rely more on algorithms to direct your investing. The fees are relatively low cost, compared to mututal funds, and that can mean a whole lot more money in your account at the end of the day.

I have been using Wealthsimple almost since they started due to their good rates on their High-Interest Savings Account, and began with Wealthsimple Invest for RRSP, and when Trade launched, I began to build a stock portfolio under my TFSA account.

Humans work at robo advisors too

Surprisingly the other day, I received an email from an investment specialist. Surprise…humans actually work at Roboadvisors! I scheduled a call with her to see what it was all about.

#1 She didn’t try to sell me anything. WIN!

#2 She helped me think about the risk level of my various investments vs what the goal for those investments was. Thinking about long-term vs short-term investments and risks. Likely will readjust the long-term to slightly higher risk exposure due to my time horizon till use (retirement).

#3 We discussed what should be in a HISA vs investment (TFSA or RRSP) depending on our savings goals. Where things like an emergency fund should be placed.

All in all it was a win and further reinforced my appreciation for Wealthsimple.

Have you used Robo advisors in Canada? What has your experience been like so far?

For more blog posts like this, check the Finance and Investing of the blog!

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