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Robo advisors are gaining popularity in Canada as an easy and low-cost way to use index investing without having to purchase index ETFs yourself. Young and Thrifty has published a Complete Guide to Canada’s Robo Advisors which covers the many robo advisors in Canada, but this article specifically focuses on the robo advisor known as Justwealth. This company claims to be Canada’s most comprehensive online portfolio platform, and we’re going to do a deep dive into their product offerings to see if that is true.
Justwealth has a host of very experienced staff on their team, from investment managers to marketing pros, and their name Justwealth doesn’t mean “only wealth” but instead refers to “justice wealth” or “fair wealth.” This company makes it their business to take care of your money the way it ought to be cared for – without gouging fees or unnecessary upsells.
Justwealth Operational Details
Justwealth is a registered portfolio manager for every province in Canada except Quebec. They are headquartered in Toronto, Ontario, and their custodian (a fancy term for the financial institution entrusted with safeguarding a client’s assets) is Virtual Brokers, a division of BBS Securities in Canada. When you invest your money with Justwealth, your investments are protected by the Canadian Investor Protection Fund, up to a maximum of $1,000,000. As a Portfolio Manager, Justwealth must adhere to a fiduciary legal standard. This title is more meaningful than the standard “financial advisor” you’ll see at most banks in Canada.
How Justwealth Looks and Ease of Use
Justwealth’s website has been home to the same bright green and navy blue colour scheme for the past three years. Some say it looks distinguished; I would prefer a sleeker website. That said, the beauty of a website should not affect your choice in robo advisor. After all, the website is just window dressing.
It does seem very easy to use, and it is certainly straightforward to join Justwealth. Just plunk your money in and watch your money grow.
How Robo Advisors Work
Just like other robo advisors in Canada, instead of visiting a financial institution (e.g. Big Canadian Bank), and speaking to a mutual fund sales representative (aka financial advisor), and then linking to the bank's head office, you can go directly to Justwealth and sort out your whole portfolio quickly and efficiently. Because you are cutting out the middle person, the fees on your portfolio are much lower than the traditional Canadian management expense ratio fee of 2.5%.
As they show, 2.5% over many years erodes your retirement money by a massive amount! Keeping your investing fees low is key to growing your wealth. After you put your money into a Justwealth account and input your data (e.g., investment goals, age, etc.) the Personal Portfolio Manager will provide you with a portfolio that suits you perfectly.
Right now, Justwealth offers 70 different portfolio options – by far the most of any robo advisor. The portfolios are made up of 42 ETFs from 9 different ETF providers. Unlike other robo advisors that only have a handful of options and choose the portfolio that most closely meets your needs (which may not be that close), Justwealth offers portfolios for literally every age and risk tolerance. Whether you are looking for portfolios for your taxable investments, your child’s RESP, or you are investing your very first dollar into your TFSA, Justwealth has an option for you.
Your portfolio is monitored daily on your behalf, and when the asset allocation gets more than 5% out of balance, the portfolio.
A unique example of the niche portfolios that Justwealth offers is the Education Target Date portfolios. These portfolios are designed to automatically rebalance as the target date approaches, so that when your child graduates, their money is available. As you can see in the screenshot below (taken from the “Performance” section of the website), the makeup of the portfolios is available without ever creating an account, allowing you to browse for the best portfolios without committing.
For example, with a target date of 2030, we see that the bulk of the portfolio is made up of iShares and Vanguard ETFs.
Like many robo advisors, Justwealth’s cost structure is easy to understand, and there are only two fee options. For those with less than $500,000 invested, the management fee is 0.50%. If you have more than $500,000 invested, your management fee is 0.40%. Simple! These fees cover all trading, custody and annual account fees. For accounts of less than $12,000, there is a minimum account fee of $4.99 per month. The minimum amount you need to open an account with Justwealth is $5,000, which is a little higher than some other robo advisors in Canada.
If you are opening an RESP, the structure is a little bit different: they are only subject to a $2.50 per month fee for accounts smaller than $25,000, and there is no minimum account size.
No Fees and No Minimums for Students and New Gradutes
Right now, Justwealth has a special offer for students and Canadians who have graduated within the last two years: try out Justwealth for free for the first six months, with no account fees and no account minimum.
On top of these fees, there is the management fee for the exchange-traded funds they use, which has an average of 0.25%. So, in total, you're looking at around 0.65% in fees if you have more than $500,000 and 0.75% in fees if you have less than $500,000 invested.
Type of Accounts
Justwealth offers the standard account types we’ve come to expect from robo advisors, including:
- RRSP (Registered Retirement Savings Plan)
- Spousal RRSP
- Non-Registered Account
- RESP (Registered Educational Savings Plan)
- Locked In Retirement Account
- Life Income Fund
- RRIF (Registered Retirement Income Fund)
- TFSA (Tax-Free Savings Account)
What Makes Justwealth Unique
- You can open a US Dollar account for some of their accounts including non-registered, RESP, TFSA, RRSP and spousal RRSP. A USD investment account is ideal for anyone with excess USD.
- For accounts larger than $1,000,000 Justwealth will prepare a custom portfolio for you.
- Every Justwealth customer is assigned a Personal Portfolio Manager who will review your finances beyond your portfolio and recommend the best portfolio for you. Additional financial planning and investment counseling is available upon request.
- Justwealth offers over 70 different portfolios for their customers, and each customer is assigned a personal portfolio manager who will help you choose the right portfolio or portfolios for your investment.
- Justwealth offers Education Target Date Portfolios for RESP accounts, and are the only Portfolio Manager in Canada (online or traditional) with an investment that automatically rebalances and matures as the target date for the child’s post-secondary education approaches. Simply choose the target date, and your child’s money will be ready when they need it most.
- Justwealth does not receive any kickbacks from exchange-traded fund companies, nor do they have a preference for particular exchange-traded fund companies.
A Peek Inside Justwealth
Justwealth is proud of saying that they are a financial company first and a tech platform second, and that is pretty obvious when you log into their client portal. It’s not as pretty as other robo advisors in the FinTech world (who may classify themselves as more “tech” than “fin”) but it is clear and concise. The new client dashboard provides summaries for all accounts that the investor has with Justwealth. You can break your investment down by Account and Asset class, and each view aggregates all of the client accounts into one chart.
Justwealth also provides both time-weighted and money-weighted performance calculations, like the one you see below:
Finally, Justwealth’s Client Bulletin Board makes it easy to interact with Justwealth and make requests to transfer money, start or change automatic contributions, and open a new account.
The qualms with the design aside, obviously looks aren't as important as how your portfolio performs, how low the fees are, and the quality of the advice Justwealth provides. Clearly, those areas are where Justwealth has put their focus.
Justwealth has options for institutional investors too, including group RRSPs that allow employees to take advantage of Justwealth’s technology and low-cost ETF-based portfolios. Justwealth also offers corporate accounts for corporate treasury and investment accounts. Corporate accounts are perfect for small and medium-sized companies looking to take advantage of taxable accounts but don’t want to DIY their investments. Finally, Justwealth designs custom portfolios for not-for-profit organizations, helping them meet their investment obligations in a low-cost way. Justwealth has specific institutional asset allocation expertise to help not-for-profit organizations accomplish their investment objectives.
If We Could Change One Thing
If we could change one thing about Justwealth, we'd change two. The first is the user experience. While Justwealth claims to put “Fin” first and “Tech” second, I think they should devote a little more time on the tech side of things. While their back end is serviceable, it's not pretty to look at, and when you don't have a brick and mortar branch to go to and you never meet your portfolio manager, the website user experience is the only representation of the company that is accessible to their users.
The second problem is the $5,000 minimum investment amount. While this is waived for students, new graduates, and RESP holders, for anyone looking to start investing who doesn't fit into these categories, $5,000 is too steep. Some competing robo advisors have much lower minimums or no minimums at all.
How to Open a Justwealth Account
Opening a Justwealth account is a cinch! You just need to have the right docs handy. To fully open an account and start growing your nest egg, you'll need:
- Your social insurance number (SIN)
- Your beneficiary’s SIN (only for spousal RRSP accounts)
- 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)
BTW, Young and Thrifty readers will receive a cash bonus when they open a new Justwealth account. Click here to take advantage of this special offer and get started right now.
- $50 for assets between $5,000 and $24,999
- $100 for assets between $25,000 and $49,999
- $225 for assets between $50,000 and $99,999
- $500 for assets over $100,000
Still not sure? Check out this PDF on Justwealth Competitive Positioning that compares Justwealth’s features and functionality to other robo advisors in Canada.
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