Mylo Vs. Wealthsimple: In-Depth Comparison & Review (2020)

Last updated on June 19th, 2020 at 09:29 pm

Mylo and Wealthsimple are two of the best home-born and proud Canadian fin-tech companies that help you save and invest. Here’s what they do – Both of these companies will automatically round up every purchase you make using your credit and debit cards (bank accounts) and invest the spare change in the portfolios you decide (growth, conservative etc). There’s no investment knowledge required, and you don’t have to change your lifestyle.

In this article, let’s look at what Mylo is and compare it to Wealthsimple? Why do you need either or? What are the important features and benefits (use cases) Mylo Offers other than the auto-investing program and vice versa?

You might have heard of Wealthsimple, it is the #1 most trusted and used auto-investing tool across Canada. To be frank, Wealthsimple is way superior to the likes of Mylo (Functionality wise, Simpler UI, Wealthsimple Trade etc). Now that was a statement I just made, but does that make Mylo any less small in terms of people liking or using it? Absolutely not. I’ll show you why in this article. 

Do I prefer Wealthsimple over Mylo?

To be fair and honest, I have used both for longer periods of time – again it all depends on what features you need and what works for you? Maybe you may be into Halal Investing, which others might not? All I am saying is simple – What I might like might not be good for you.

In this review of Mylo, I’ll be as honest I can to help you decide. At the end of the day, it is your hard-earned money which should be useful to you, when you need it.  A quick note here – there are numerous other articles on this blog about Wealthsimple, BMO’s Smartfolio, InvestorLine, Wealthsimple Vs. Mylo, so do check them out when you get some time. I’m sure you will enjoy the content. Finally, with Mylo, you turn your spending habits into saving habits. Let us get started. 

mylo

What Is Mylo? 

Mylo was created with the social mission of helping Canadians achieve their financial goals. This online platform makes saving and investing accessible to everyone.

Mylo is an app that helps you save and invest. Mylo automatically rounds up every purchase you make and invest the spare change. There’s no investment knowledge required, and you don’t have to change your lifestyle. With Mylo, you turn your spending habits into saving habits. 

Here’s a fun fact – Over half of Canadian millennials have less than $1,000 in savings, regardless of their income. Mylo’s actively working to fix that with a simple, automatic and stress-free solution for saving money and building wealth.

It starts with roundups, but micro-saving is just the beginning. Mylo uses machine learning in conjunction with financial and transactional data to make personalized recommendations that help our users make smart decisions with their money.

Mylo was launched as an investment app in July 2017.

Today, the app has already been downloaded by over 500,000 Canadians from coast to coast.

What Is A Mylo Roundup?

A roundup is what Mylo calls the spare change on your credit and debit card transactions.

Automatically investing roundups is an easy way to save, and they add up quickly! Simply link your chequing account (funding source) and your debit and credit cards (roundup sources) to your Mylo account, and the system automates the process for you.

For example, If you spend $3.25 on a coffee using a linked credit or debit card, Mylo’ll automatically round up your purchase to the nearest dollar ($4.00) and put 75 cents aside in your Mylo account.

Every week on Monday, Mylo will add up all your roundups from the previous week, withdraw the total from your funding source (debit and credit card), and invest the money in your investment account. If you activate the in-app multiplier, you can accelerate your savings by multiplying your roundups by 2X to 10X.

How Does The Mylo Roundup Work? 

Let me give you an example here. Just to make sure you understand what Mylo is all about.

When you buy a coffee you’ll pay 1.30 or 1.50. These auto investment apps will round up to the nearest dollar amount, in this case, $2. So, the system automatically adds $0.70 to your investment portfolio. 

Again, that’s the basic plan I’m talking about – rounding up your purchases. You have other advanced levels where you can increase the round-ups and also bump up money every now and then.

Now just imagine, this keeps happening with all transactions throughout the day on all your bank accounts linked – you can link more than one bank account and multiple accounts within a single bank account – debit, credit cards etc. 

How Do I Connect My Bank Account To Mylo?

Mylo needs a funding source to start rounding up your purchases.

Your investment account is funded by the bank account that you designate as your funding source, typically a chequing account. 

If you want to use a savings account as a funding source, simply update your information in the app under Account and Banks.

You can fund your Mylo account by connecting it with a funding source, such as a chequing account, as well as any credit and debit cards you regularly use to make purchases. Every time you make a purchase with your cards, Mylo will round up the price to the nearest dollar and invest the spare change.

You can reach your financial goal faster by making a deposit in your Mylo account anytime. First, click on the goal in which you’d like to make a deposit. Next, hit the orange plus sign and select an amount to add to your goal.

mylo - 1

How Does Mylo Work?

Mylo asks for a couple of starter questions during signing up

Your answers provide the information that your portfolio manager needs to understand – your financial situation, your risk profile and your financial goals.

Using this information, your portfolio manager will recommend an investment portfolio that reflects your unique situation. Since your investment account is fully managed by a registered Canadian portfolio manager, you do not need any prior investment knowledge to use Mylo.

Is Mylo Safe To Use?

First of all, before answering this question you need to understand that there is a certain level of risk associated with any type of investment. In the case of Mylo, Tactex Asset Management invests your money in a well-diversified portfolio of low-cost ETFs, so your investment is far less volatile and risky than it would be if you were picking specific stocks on your own. 

All the ETFs that you’ll be investing in are held in trust by a custodian at Mylo, which is insured by the Canadian Investor Protection Fund (CIPF).

The custodian for these funds is Fidelity Canada Clearing and our trustee is TMX Trust, who is a wholly-owned subsidiary of the Toronto Stock Exchange Group (TSX).

The only risky element you need to note here is that – while the funds in your Mylo account are insured and safe, your investment account itself is not CIPF insured.

Also, all Mylo accounts are audited by an international accounting firm annually.

Mylo Roundups For More Than One Financial Goal?

Mylo rounds up your purchases and will put the same amount of spare change in every financial goal that you have created. Now, imagine you are saving for a vacation and also donating to a charity.

If you buy a coffee for $4.50, Mylo will deposit 50 cents on both goals.

In other words, you’ll be putting $1 aside on a $4.50 purchase.

You can also disable or accelerate roundups for specific goals.

If you want to focus on your donation goal, for example, you can temporarily pause roundups on other goals. If you want to reach a goal faster, you can multiply roundups (by 2X to 10X) for an individual goal.

Is Mylo Really Free?

Mylo costs $1 a month and Mylo Advantage costs $3 a month. That’s it. No matter how much you invest. To make investing affordable and accessible to all, Mylo invests in exchange-traded funds (ETFs).

The companies that manage these funds typically charge a Management Expense Ratio (MER) that range from 0.05% to 0.37% for regular portfolios and 0.20% to 0.60% for SRI portfolios. These MERs are among the lowest in the industry.

Mylo does not make any money from MERs and will always invest your money in the most efficient investment vehicles.

Why Does Mylo Charge A Monthly Fee?

Your Investments at Mylo are managed by Tactex Asset Management.

The Mylo app is free to use, but your portfolio manager, Tactex Asset Management, will charge a low, flat fee of $3 a month for access to unlimited registered accounts, including TFSAs, RRSPs and any accounts made up of Socially Responsible Investment (SRI) portfolios.

That’s it. No matter how much you invest.

To make investing affordable and accessible to all, Tactex Asset Management invests in exchange-traded funds (ETFs). The companies that manage these funds typically charge a Management Expense Ratio (MER) that range from 0.05% to 0.37% for regular portfolios and 0.20% to 0.60% for SRI portfolios.

These MERs are among the lowest in the industry. Mylo does not make any money from MERs and Tactex Asset Management always invest your money in the most efficient investment vehicles.

Here’s what Mylo has to say about charging a Monthly Fee to end-users: 

“We Charge a flat monthly technology fee so we can develop Mylo to serve you better.

We never charge hidden fees or surprise costs, unlike other investment services, and we pride ourselves on working hard to keep costs as low as possible”.

How Mylo Invests Your Money 

Every Mylo account out there is managed by a Canadian portfolio manager at Tactex Asset Management, a subsidiary of Mylo Financial Technologies Inc.

So what does the portfolio manager at Mylo actually do? Where does he actually invest your money? 

Like I said earlier, Investment accounts opened through Mylo are non-registered by default.

However, they have plans to allow registered plans for your TFSAs and RRSPs in the near future.

At Mylo, the portfolio manager invests your money using a diversified portfolio of low-cost ETFs that is modelled after the Modern Portfolio theory.

If you ask me, yes Mylo is definitely worth it! That’s because you have nothing to lose here. All you have to do is invest your spare change by connecting a couple of your bank accounts and the investment will grow over time without you having to do anything. Its plain simple. And the withdrawal process is simple too, you’ll never have any hassles as such, it is a premium Canadian company!

In this section let’s take a look if Mylo’s monthly charges are really worth it and how does it work

Mylo

4.6

Value For Money

4.5/5

Benefits

4.5/5

Rewards

4.8/5

Pros

  • The Mylo App is especially great for you if you find it difficult to put down significant sums of money at once to invest or save
  • As per the company, they employ the same security and encryption measures that your bank uses
  • No prior Investment knowledge is required on your part given that your portfolio manager does all the asset allocation and re-balancing for you

Cons

  • Desktop Version could have been better
  • Mylo Advantage is the only premium version of Mylo and comes with a $3 monthly fee
  • Could have more Investment Portfolios

Sagar Sridhar

Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master's degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.

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