Perhaps in the next 10-20 years big bank financial advisors (aka mutual fund salespeople) will become a thing of the past with the fintech explosion and millennial uptake of robo advisors becoming the go to resources for retirement planning. Young and Thrifty recently wrote a Complete Guide to Canada’s Robo Advisors and you can see that there are many robo advisor options available in Canada. This post specifically reviews WealthBar, a robo advisor based out of Vancouver, BC. WealthBar has helped Canadians plan over $625,000,000 since starting.
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Who’s Behind WealthBar
The two co-founders are a husband and wife team! Tea and Chris Nicola both have engineering backgrounds and are from Vancouver, BC. Tea has a special place in my heart since her bio explains that she enjoys playing Dungeons and Dragons! Tea has focused on working as a financial advisor and Chris got his involvement in the financial world working for his father’s wealth management company, but also cut his teeth as a software and web developer. They both worked on and off for John Nicola, owner of Nicola Wealth Management who has a clientele comprised of high net worth individuals and has $4 billion in assets under management. When Tea and Chris wanted to make financial advice available for the other 99%, they created WealthBar with John’s support.
The other members of WealthBar impressively include portfolio managers, CFA designates, and financial advisors. Of course there are marketers, software developers, and graphic designers as well.
WealthBar is a registered Portfolio Manager in British Columbia, Alberta, Manitoba, Saskatchewan, Ontario, Quebec, Newfoundland and Labrador, New Brunswick, Nova Scotia and PEI. The money that you invest in WealthBar is protected by the Canadian Investor Protection Fund for up to $1,000,000 CAD. The Custodians for WealthBar are BBS Securities Inc., Interactive Brokers Canada Inc., National Bank Corespondant Network, and Credential Securities Inc. These are the institutions that actually hold your assets. For more on what this means, check out our in-depth robo review.
How It Looks and Ease of Use
WealthBar looks sleek and I think the design of their site would definitely appeal to the millennial generation. Lets just say I really enjoy the colour scheme and the design is very appealing to the eye yet simple to nativate. When you go to the dashboard, it also is easy to use and easy to get to where you want to go. Setting up the account is a fairly simple process as well. A helpful message pops up while you’re opening the account to see if you need any WealthBar assistance (and a mini-face icon) so you know who you’re talking to.
How it Works
As with other robo advisors, how WealthBar works is you first start off by signing up for an account. You can do this in the comfort of your own home, wearing your pyjamas, and drinking wine (an introvert’s dream).
Then they ask a series detailed questions, collect your Social Insurance Number, ask you to take a picture of your government-issued ID and then you’re off to the account creation races.
Because you’re cutting out the middle man (the big bank and their massive maintenance costs) you save considerable money on the Management Expense Ratio fees (something you can say about all of the robos we’ve looked at).
As with other robo advisors, when it comes to re-balancing Wealthbar will automatically adjust your asset allocation if it deviates from your original target by more than 5%, when distributions or contributions are made to the account, and at a minimum quarterly.
What WealthBar will Cost You
WealthBar has a multi-tiered pricing system and charges a fee dependent on your portfolio value. The fee that you pay WealthBar includes transaction costs, administrative costs, and financial planning. If your fees are in a tax deductible account, you can deduct the fees on your tax returns.
- If you have less than $5,000, management is free.
- If you have $5,000-$150,000, it costs 0.60%
- If you have $150,000-$500,000 it costs 0.40%
- If you have over $500,000 to invest, it costs 0.35%
In addition to these fees, there will be a fee of 0.29% – 0.35% depending on which exchange traded funds they have invested in for you.
Types of Accounts Available
It is difficult to find the types of accounts available on WealthBar, but seemingly, the types of accounts available include:
- Spousal RRSP
- Corporate Non-Registered Account
- LIRA- Locked In Retirement Account
- Joint Non-Registered Savings Account
- RRIF and Spousal RRIF
- Open-Non-registered accounts
The portfolios depend on your risk level and there are a number of different portfolios depending on what you are investing for and your risk tolerance. When you invest with WealthBar, they will create a portfolio for you comprised of 8-10 exchange traded funds.
These are the funds that WealthBar uses. It is an interesting collection of exchange traded funds, I had never heard of NWM as an ETF, then looking it up realized that NWM is a pooled fund and not an ETF. And NWM is Nicola Wealth Management, which owns a stake in WealthBar and is a financial planning company for high net worth individuals. As you can see their MER is a little higher than the rest. To invest in the NWM funds, you will need to have a portfolio of more than $1,000,000. From what I understand, the value proposition with NWM is that it gives high net worth investors access to a slightly more diversified pool of assets such as direct real estate and infrastructure holdings that are normally the domain of institutional investment arms. Kind of a neat feature, but not likely one I’ll be ready to make use of any time soon!
Here is a screen shot of the different portfolio options available at WealthBar.
What Makes WealthBar Unique
What makes WealthBar unique is that they are backed up and teamed up with Nicola Wealth Management. and can access their pooled funds – but you need a minimum investment of $1,000,000.
You can open an account with WealthBar, chat with an advisor, set up a phone call, and create a financial plan or have it reviewed by an advisor from WealthBar. You will have a dedicated advisor WealthBar appears to be trying very hard to define itself as being the most focused on personalised advice.
WealthBar also sells independent insurance and they are a Full Life Insurance Agent in the provinces of British Columbia and Ontario. None of the other robo advisors I’ve looked at have been involved with insurance to the best of my knowledge.
Finally, WealthBar includes a cash portfolio option that gives you a rate of return of 1% to park your cash, which is an interesting alternative to a big bank high-interest savings account (although not as good as what some of Canada’s online banks offer).
What It Looks Like
When you start to open up an account, it doesn’t make you go through 25 questions about your risk tolerance and gets pretty much to the point. They ask you what you would do if you lost 10% of your portfolio, and some other questions, and are slotted into a recommended ETF portfolio. You can see the asset allocation for the growth mix below.
Then they ask detailed questions, such as if you have dependents, your martial status, etc., and finally, you show a copy of your ID. It seems very thorough.
Once your account is set up, the dashboard looks like this:
When you click on your financial plan, you can see personalized information where you can customize your net worth and calculate how much you will have by a certain year depending on rate of return and savings rate. This is just a demo and not reflective of my own financial plan!
Act Now! How to Open a WealthBar Account
Just make sure you have the information below handy and then Click Here (remember to snag our Young and Thrifty promotion).
In order to fully open an account and start growing your nest egg you’ll need:
- Your social insurance number (SIN)
- Your beneficiary’s SIN (if applicable)
- Images of the front and back of a piece of government issued photo ID
- An image of a recent bank account statement or screenshot from your online banking
- Your bank account information (a cheque is the easiest)
I’m excited to see such intense competition within the robo advisor space. At the end of the day, the more elite market entries such as WealthBar, the more relatively small-fry consumers like myself can benefit!