While brokerages have gotten more innovative with names like Questrade offering a hybrid service catering to both self-directed traders and Couch Potato investors, WealthBar was designed strictly for passive investors.
Apparently, everyone else wants to make money via trading, but not everyone has the requisite know-how to make it happen. This is the primary reason why Robo-advisors exist: to enable those who are short of investment and trading knowledge, expertise, time, and budget to get a piece of the pie too.
Based in Vancouver, WealthBar was launched in 2014 – Canada’s first full-service Robo-advisor – by a husband and wife team, Chris and Tea Nicola. Both have a wealth of experience in financial advisory and wealth management. In addition to his time working for his father’s wealth management company, Nicola Wealth, Chris also has extensive experience as a software and web developer.
After managing the wealth of affluent Canadians for so long, Tea and Chris decided to launch a Robo-advisor to make the same exclusive private investment opportunities of the wealthy 1 percent available for the 99 percent. Unlike most other brokerages and Robo-advisors, WealthBar is also very transparent in their approach: since their inception, they have always posted the performance of their portfolios online for the world to see and the view has been impressive.
So with exclusive private portfolio opportunities and asset classes, transparency, and also low fees investing, what else is there to say about them? This WealthBar review will give an overview of the Robo-advisors investing and trading products, performance, types of portfolios, and so on. This will help you recognize if WealthBar is the right fit for your investment objectives.
WealthBar Account Types
The ultimate reason for investing will always differ between investors. While some want to grow their long term savings free of taxation, others are garnering finance to live off during retirement, while some others are saving up capital to start their business venture and so on.
Whatever the case, you will likely find a type of investment account that fits your particular needs among WealthBar’s plethora of account options. Here are some of the major account types available:
1. RRSP (Registered Retirement Savings Plan). This is simply a tax-advantaged method of saving up for your retirement. Profits from investments held in an RRSP are tax-free and only withdrawals are taxed. It can be opened individually, by a couple, or by a group.
2. TFSA (Tax-Free Savings Account). This works just like the RRSP but is leveraged for more general savings purposes and can go on forever
3. RESP (Registered Education Savings Plan). This account type is perfect for parents who want to keep putting away (and investing) some money for their kid’s education after secondary school. Contributions to the account are tax-free and can also be matched by some government grants
4. RDSP (Registered Disability Savings Plan). This one is geared towards making funds available to cater for people with various kinds of disabilities. Disability tax-credit eligible users here can also benefit from additional gains contributed to their RSDP from various bonds and government grants
5. RRIF (Registered Retirement Income Fund). An RRSP account is converted into an RRIF account once the holder has retired and is ready to start taking withdrawals from their RRSP
6. LIRA (Locked-In Retirement Account). This holds and locks pension funds for investors who were former members of a pension plan
7. LIF (Life Income Fund). Like the RRSP/RRIF relationship, the LIF is the account used to take regular withdrawals from a LIRA account
8. Non-registered investment accounts. These accounts are more general in their investing scope and have much higher limits than an RRSP or TFSA. It can also be used to invest by Canadians who are living/working outside the country
9. Corporate/Business investment accounts. Perfect for investors who want to operate their investments under a business name
10. IPP (Individual Pension Plan). More or less an alternative to the RRSP with a focus on executives and business owners
WealthBar Investment Portfolios
This Robo-advisor is known for its many carefully chosen ETFs on offer. Fees for investing in these ETFs are low and naturally, investment growth depends on your risk profile and tolerance, and investment goals. WealthBar uses this information to select the best portfolios for you to invest in.
The portfolios available via WealthBar are categorized such that the investment risk for each portfolio is directly proportional to its reward/growth.
1. WealthBar Aggressive ETF Portfolio – Maximum growth possibility with high volatility. This portfolio is made up of 5% preferred shares, 10% real estate, 22.5% bonds, 62.5% equities
2. WealthBar Growth ETF Portfolio – Focused on growth with moderate volatility. The portfolio comprises 32.5% bonds, 52.5% equities, and a 15% mixture of real estate and preferred shares
3. WealthBar Balanced ETF Portfolio – Moderate growth and moderate volatility. This ETF portfolio is made of 41% bonds, 44% equities, and a 15% real estate and preferred shares
4. WealthBar Conservative ETF Portfolio – Mainly focused on investment protection and steady growth. Low volatility. The portfolio is 56% bonds, 29% equities, and 15% real estate and preferred shares
5. WealthBar Safety ETF Portfolio – Solely designed for investment presentation and protection. Little to no volatility. The portfolio contains 69% bonds, 16 percent equities, and 15% real estate and preferred shares
As can be seen, the WealthBar Aggressive Portfolio is for those with the highest risk tolerance, while the Safety ETF portfolio is for those who want guaranteed investment protection regardless of growth rate.
For each of these portfolios, WealthBar has strategically chosen a list of 8 to 10 ETFs to make them up.
All the chosen ETFs keep to WealthBar’s low-cost investment strategy and are gotten from ETF providers like iShares, BMO, Vanguard, Horizon, and Purpose among others.
These ETFs include:
BMO Covered Call DJIA Hedged to CAD ETF (ZWA)
Purpose High-Interest Savings ETF (PSA)
iShares Core MSCI EAFE IMI ETF (XEF)
Vanguard Canadian Short-Term Corp Bd ETF (VSC)
Horizons S&P/TSX 60 ETF (HXT)
Also, for the socially responsible investors, WealthBar also gives investors the opportunity to purchase the environmentally friendly ETF, Invesco Cleantech ETF (PZD), as part of their investment portfolio. WealthBar only allows you to commit 5% of your portfolio to Cleantech though. It also helps that Cleantech has a proven record of impressive performance.
Watch the Below Video from WealthBar’s official YouTube Channel On “A Year In Review At WealthBar” – Very Informative and Useful.
WealthBar Private Investment Portfolios
And then there’s WealthBar’s exclusive private investment portfolio. These portfolios are offered to WealthBar’s users from Chris Nicole’s father’s portfolio management company, Nicola Wealth. The company bought a majority stake in WealthBar through via CI Financial’s acquisition in 2018, giving WealthBar access to these exclusive investment opportunities.
These private portfolios are also known as “all-weather portfolios” and are designed for growth, regardless of the market conditions at any given time. Such investment opportunities are usually exclusively privy to wealthy investors with millions to invest.
Thanks to WealthBar’s relationship with Nicola Wealth, low-budget investors in Canada can add these portfolios to their investments.
What Are The Fees Associated With WealthBar’s Services?
And now we come to the fees, one of the most attractive features of WealthBar. Unlike most other brokerages and Robo-advisors, WealthBar’s fees follow a multi-tiered pricing system where the fee paid by investors is a predetermined percentage of their investment amount.
First of all, it’s nice to know that WealthBar will manage your investment at no cost if your portfolio value is below $5000. The fees paid for higher amounts are stated this:
From $5001 – $149,999: 0.6% annual fee rate
From $150,000 – $499,999: 0.4% annual fee rate
For $500,000 and above: 0.35% annual fee rate
These are the only fees you’ll ever pay to WealthBar and this covers all the services you get from them from financial planning efforts to managing and trading your portfolio.
This fee structure does not mean that you will pay a fee of 0.35% if you only have $500,000 in portfolio value. Your investment will instead be broken down into firsts. So for a $500,000 investment, the first $150,000 will be charged at 0.6%, leaving $350,000 which can then be charged at the corresponding rate of 0.4%.
WealthBar Vs. Wealthsimple
While WealthBar ETF investment is significantly less costly than trading mutual funds with a traditional brokerage, you may be able to get cheaper fees from other online brokerages and Robo-advisors such as Wealthsimple.
Wealthsimple’s fee structure is simpler to understand. Users pay a 0.5% annual rate for a portfolio value below $100,000 and 0.4% annual rate for a portfolio value above $100,000.
A $90,000 investment will cost you a management fee of:
$540/year with WealthBar
$450/year with Wealthsimple
While an investment of $500,000 will cost you:
$2300/year with WealthBar
$2000/year with Wealthsimple
These fees are still pretty close are much better than traditional mutual funds investing that will set you back around $1980 for a $90,000 investment and a dizzying $11,000 for a $500k portfolio.
In addition to these fees, there is also an MER fee that is built into your fee structure but is not displayed like WealthBar’s management fees. The MER fees go anywhere from 0.29% to 0.35%. The particular fee is paid directly to the providers of the ETFs you are invested in.
For WealthBar’s private investment portfolios, the MER is even higher (at around 1.56%). This is still lower than the average fees for traditional mutual funds though.
While fees are a strong point for deciding which Robo-advisor to opt for, you also have to check out the features and services of each one. You may find that the one that is slightly costlier is the one that has all the features and provides all the services you need for your investing.
Wealthsimple Halal Investment
Wealthsimple’s Halal Investing portfolio is a simple and low-cost way to grow your money. Your portfolio is optimized not only for performance but for companies and investments that comply with Islamic law.
Key Features Of Wealthsimple’s Halal Investment
1. All Halal investments are screened by a third-party committee of Shariah scholars.
2. No Halal investment in companies that profit from gambling, arms, tobacco, or other restricted industries
3. No businesses that derive significant income from interest on Halal loans
What Does Wealthsimple’s Halal Investment Include?
Wealthsimple’s Halal Investment Portfolio includes 50 stocks from around the world to minimize the risk cost of your invested money.
Below is the video comparing Questrade Vs. Wealthsimple (Two of the most popular Robo-Advisors In Canada)
Why Choose WealthBar?
There are other bits and pieces of information you will need to know about WealthBar before deciding if they are worth the trouble.
I’ve outlined the major points here as to why people opt for WealthBar:
1. Besides their investment service, WealthBar also offers unlimited financial planning and advice to every client, regardless of their portfolio value. Every WealthBar account holder has a dedicated financial adviser. There is also a financial planning tool for investors to run different investment scenarios that will help you reach your financial goal
2. They offer more account types to residents of Quebec than most other Robo-advisors
3. While they have set ETFs for your investment needs, you also have the choice to custom-build your own investment portfolio
4. WealthBar Minimum – The minimum amount for investing with WealthBar stands at the low price of $1000. If you do not have that much, you can pay into your WealthBar account in installments until you reach the minimum amount. WealthBar will not invest your money into any of your chosen ETFs until you have at least $1000
5. WealthBar’s investment management strategy keeps your portfolio within sight of your financial goals by automatically rebalancing it should it tilt more than 5% from your allocated objective
6. This one is not exclusive to WealthBar, but your investment is secured by CIPF and IIROC via the independent custodians BBS, Credential Securities, and NBIN. This means that all your funds in WealthBar are insured up to $1 million for every account type you hold in the event that WealthBar goes bankrupt and folds
7. WealthBar offers a risk-free trial period after which you can also leave at no cost if you find it is not a good fit
8. If you are transferring your investment to WealthBar from another broker, WealthBar will rebate your transfer fees up to $150 for transfers of $25,000 and above
9. WealthBar also offers many other services like tax optimization, insurance needs analysis, corporate tax planning, and estate planning among others
If you want mutual fund-type investing but do not have the funds for it, WealthBar helps affords to invest in private portfolios that are usually the domain of the high-net-worth investors. There’s also the part about the low fees, low minimum investment of $1000, and the human financial advice included in every investor’s package.
With over $250 million in assets under management and the backing of their parent company, Nicola Wealth, they apparently are doing something right.
However, all these do not mean that WealthBar is the best (or not the best) Robo-advisor in Canada. Still, if you have very particular needs from your Robo-advisor, like looking for the lowest fees, then other options like Wealthsimple will give you lower fees overall, especially if you have a large budget above $100k.
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- WealthBar offers a risk-free trial period after which you can also leave at no cost if you find it is not a good fit
- The minimum amount for investing with WealthBar stands at the low price of $1000
- If you are transferring your investment to WealthBar from another broker, WealthBar will rebate your transfer fees up to $150 for transfers of $25,000 and above
- Still, if you have very particular needs from your Robo-advisor, like looking for the lowest fees, then other options like Wealthsimple will give you lower fees overall, especially if you have a large budget above $100k
- Wealthsimple is the #1 most trusted at the moment by Canadians, so you might want to consider that as well before deciding