Robo-Advisors Explained
Hands-off investing made simple. Let technology do the heavy lifting.
🤖 What is a robo-advisor?
A robo-advisor is an online platform that automatically builds and manages an investment portfolio for you based on your goals and risk tolerance. You deposit money, answer a few questions, and the robo does the rest.
How It Works
- Sign up and answer questions about your goals, timeline, and risk comfort
- The robo-advisor recommends a portfolio (usually a mix of ETFs)
- You deposit money (one-time or automatic recurring)
- The platform automatically invests, rebalances, and reinvests dividends
- You check in occasionally and watch your money grow
Who Should Use a Robo-Advisor?
- ⬥Beginners who don't want to pick their own investments
- ⬥Busy people who want a "set it and forget it" approach
- ⬥Anyone intimidated by self-directed investing
- ⬥People who want professional management without the high fees
Top Canadian Robo-Advisors
Wealthsimple Invest
Management fee: 0.5% (under $100K) or 0.4% (over $100K)
The most popular Canadian robo-advisor. Beautiful app, socially responsible investing options, and no minimum balance.
Questwealth
Management fee: 0.20%–0.25%
Lower fees than Wealthsimple. $1,000 minimum. Good for cost-conscious investors who still want hands-off management.
BMO SmartFolio
Management fee: 0.40%–0.70%
Backed by BMO. Good if you want a big-bank name behind your investments. $1,000 minimum.
CI Direct Investing (formerly WealthBar)
Management fee: 0.35%–0.60%
Includes access to human financial advisors. Good for those who want some personal guidance.
Robo-Advisor vs. DIY Investing
| Factor | Robo-Advisor | DIY (Self-Directed) |
|---|---|---|
| Effort | Minimal | More hands-on |
| Fees | 0.2%–0.5% + ETF MER | ETF MER only (~0.2%) |
| Control | Limited | Full control |
| Best for | Beginners, busy people | Confident DIYers |
🍁 Canadian Pro Tip
Start with a robo-advisor to build confidence. Once you understand how investing works and feel comfortable, you can switch to self-directed investing with all-in-one ETFs to save on fees. Many people start robo and graduate to DIY within 1-2 years.