Did you hear that Questrade Portfolio IQ has been relaunched as Questwealth Portfolios?
- 1 Questrade: The Company Behind Questwealth Portfolios
- 2 Questwealth Portfolio Look and Ease of Use
- 3 How Robo Advisors Work
- 4 Questwealth Portfolio Options
- 5 Questwealth Portfolio Fees
- 6 Type of Accounts
- 7 What Makes Questwealth Portfolio Unique
- 8 A Peek Inside Questwealth Portfolios
- 9 If We Could Change One Thing
- 10 Act Now and Open a Questwealth Portfolio Account
- 11 The Bottom Line
|QUESTWEALTH PORTFOLIOS: AT GLANCE|
|Fees between 0.20% and 0.25% are an industry leading low.||Funds are actively managed by an investment advisor; there’s no evidence to support that actively managed portfolios outperform passively managed ones.|
|Link accounts with family and friends and get tiered pricing that could result in a rate cut of 0.5%|
|Offers socially responsible investment portfolios that are not more expensive than the regular portfolios.|
|Excellent transparency: information about Questwealth Portfolios' performance is published on the website.|
|Sleek, easy to use website|
It seems like every month there is a new entrant into the Canadian Fintech scene. Either it’s a new money tracking app, a new online bank, or a new robo advisor – and the backgrounds of the companies involved can vary dramatically. There are relatively new start-ups with amazing marketing and stunning websites (like Wealthsimple, check out our detailed Wealthsimple review,) and there are smaller but more established companies that focus entirely on the financials and less on the technical side of things. There are even some big banks offering their versions of robo advisors, but with the higher fees you’d expect for the privilege of working with a big bank.
Then you’ve got companies that seem to have hit the sweet spot: they’ve been around for a long time, they’ve got a killer user experience, and the fees are low enough to lure in even the most skeptical mutual fund owner.
The last company that I described is Questrade. Questrade is a discount brokerage that has been offering low-cost DIY investing solutions in Canada since 1999. They are the darling of the DIY investing world because they give Canadians the opportunity to build portfolios themselves for ultra-low fees. But there was a catch – you had to do it yourself, without any oversight, and many Canadians weren’t comfortable with that.
Questrade also offers managed portfolios, originally called Portfolio IQ. These portfolios have been available since 2014, but they recently relaunched as Questwealth Portfolios. These portfolios have all the hallmarks of a good robo advisor including exceptionally low fees (around 0.25%), an easy to use interface, and an entirely online presence.
Questrade: The Company Behind Questwealth Portfolios
The company behind Questwealth Portfolio is Questrade, which has had a presence in the Canadian investment industry for the past 19 years. In case you didn't know, Questrade is a registered investment dealer and a member of the Investment Industry Regulatory Organization of Canada (IIROC). Questrade is also a member of the Canadian Investor Protection Fund (CIPF), which is a not-for-profit insurance program that protects your money (up to $1 million) in the event Questrade becomes insolvent.
They’re also one of the fastest growing robo advisors, with over 30,000 new account sign-ups every year. Questrade’s headquarters are in Toronto, but they are an entirely online organization, meaning they don’t have brick and mortar branches for you to visit. Instead, if you have questions, you can get in touch with them via chat, phone, or email.
Regarding size, Questrade has a formidable presence in the robo advising scene. This company has $8 billion in assets under management, compared to Wealthsimple with just $2 billion. This company’s size and longevity have made them a household name in the DIY investing world, and now they’re extending their services to include actively managed portfolios for investors who want low fees but aren’t ready to DIY their investments yet.
Questwealth Portfolio Look and Ease of Use
When it comes to robo advisors, the usability and beauty of their websites run the entire gamut of quality. From the sleek, ultra-chic websites to bare bones and straightforward dashboards, the range in website quality is huge.
Questwealth Portfolio’s website falls on the higher end of the design quality spectrum. The website is sleek and user-friendly. When you first arrive on the Questrade website, you have the option to choose self-directed investing, or the Questwealth Portfolios.
After you’ve signed up for the Questwealth Portfolio option, you go through the questionnaire, which asks you questions about which accounts you’d like to open, details about your income, your risk tolerance, and investment timeline. After that, you’ll have access to the dashboard, which shows all of your investments in one place.
How Robo Advisors Work
If you haven’t heard of robo advisors yet, you’ve got some serious catching up to do in the Canadian Fintech world. Here’s the short version: Instead of visiting a brick and mortar bank and putting your money mutual funds that charge high fees (the average in Canada is 2.5%) and rarely beat the market, robo advisors are usually an entirely online experience. Simply sign up online, answer the questionnaire, and the robo advisor algorithm will suggest one of several model portfolios for you. These portfolios are usually designed to track the market and contain a highly diversified mix of equities and fixed income – often portfolios are built out of exchange traded funds (ETFs) to minimize fees. If you’re learning how to invest online for the first-time, we cover all of the robo advisors in Canada with our Complete Guide to Canada’s Robo Advisors.
An investment fund manager actively monitors your Questwealth Portfolios, but the fees are much lower than other actively managed funds – between 0.20% and 0.25% depending on how much you have to invest (more on that later). This huge difference in fees means you’ll save up to multiple percentage points every year for life of your investment.
A few percentage points may not sound like much, but they add up over the years.
For example, let’s say you currently have $20,000 in your RRSP, which is holding mutual funds. You’ve been making annual contributions of $6,000 per year, and you want to get the most bang for your buck. If you stuck with your current mutual fund, in 30 years, you would have $659,676. If you switch to a low fee robo advisor like Questrade, your money will grow to $1,004,497 in the same period. That’s a difference of $344,821 just from minimizing your fees.
If you’re interested in how much you could save, Questrade has a handy calculator where you can input your information. There is also a disclosure page where they show all of the numbers and assumptions behind the calculator.
Questwealth Portfolio Options
Right now, Questwealth Portfolios offers five portfolios, each built from ETFs, and each suited to a specific risk tolerance. The portfolios are:
The names of the portfolios are very self-explanatory, and each portfolio has a mixture of Canadian, US, and International equities, fixed income, and cash to reflect the risk tolerance of the individual matched to that portfolio. Your portfolio is monitored by Questwealth Portfolios and is automatically rebalanced on your behalf – a standard feature of most robo advisors.
If you want to learn more about a specific portfolio, you can do that before you sign up and commit your money to Questwealth Portfolios by checking out each portfolio in the Portfolios section of the website.
While five portfolio options may not seem like much (some robo advisors offer up to 70), I’m firmly in the “keep it simple, stupid” camp when it comes to investing my money. For the vast majority of Canadians who are investing for retirement, five options are enough. If you have a unique situation (for example, you want a target-date portfolio for your child’s RESP), perhaps another robo advisor would be a better choice.
Questwealth Portfolio does offer a few niche investing options for their customers, one that I find particularly interesting is their Socially Responsible Investment (SRI) Portfolios. These portfolios focus on companies that support environmental, social, and corporate governance initiatives, as well as companies with a good track record on labour practices, those with lower carbon footprints, and renewable energy companies. The SRI portfolios are built with ETFs, which means the fees are comparable to the regular portfolios, and you’ll pay the same flat rate of either 0.25% or 0.20% depending on how much you have invested, plus ETF fees.
Questwealth Portfolio Fees
Now down to the nitty-gritty: the fees. Simply put, Questwealth Portfolios offer some of the lowest robo advisor fees in Canada. There are two tiers of fees for Questwealth Portfolios:
- For balances between $1,000 – $100,000: 0.25%
- For balances $100,001 and above: 0.20%
That’s about $4 per month on a $20,000 balance, or less than most banks charge for their chequing accounts. You need at least $1,000 to start investing with Questwealth Portfolios, which isn’t as low as Wealthsimple (who has no minimum) but not as high as some other robo advisors either. $1,000 isn’t a huge hurdle for the average beginner investor.
There are also no hidden fees when you invest with Questwealth Portfolios. That means no fees to transfer your assets, no trading fees, and no fees to make regular contributions. Each portfolio does have its own Management Expense Ratio (MER) added to the fees above, but those fees are disclosed in the portfolio section.
Type of Accounts
The standard for most robo advisors is to offer a variety of registered accounts to their clients, and Questwealth Portfolios is no exception. Here are the account options they offer:
- RRSP (Registered Retirement Savings Account)
- Spousal RRSP
- LIRA (Locked-in Retirement Account)
- RIF (Retirement Income Fund)
- LIF (Life Income Fund)
- TFSA (Tax-Free Savings Account)
- RESP (Registered Education Savings Plan)
- Family RESP
What Makes Questwealth Portfolio Unique
- You can opt for socially responsible investment portfolios that are not more expensive than the regular portfolios. This option is available when you sign up, so you can invest responsibly right off the bat.
- Questwealth Portfolio is part of Questrade, who has an impressive $8 billion in assets under management. You aren’t taking a chance on a small company when you work with Questwealth Portfolio.
- Unlike most robo advisors who use passive investing to achieve their low fees, Questwealth Portfolios are actively managed by an investment advisor – which is probably the biggest difference between most other robo advisors and Questwealth Portfolios. Usually, when a fund is actively managed, there are higher fees to go along with it, like BMO Smartfolio, but in this case, the active management has not resulted in higher fees.
- Fees between 0.20% and 0.25% are an industry leading low.
- You can link your accounts with family and friends and take advantage of the tiered pricing. So if you have a sibling and together your account balances are over $100,000, linking them together could result in a rate cut of 0.5%
- If you’re wondering how the various Questwealth Portfolios have performed over the past ten years, that information is readily available in the portfolio section of the website, which you don’t need an account to access. This transparency gives you peace of mind and also an expectation of how the fund will perform over the long term – keeping in mind, of course, that past performance does not guarantee future results.
A Peek Inside Questwealth Portfolios
Signing up for robo advisor accounts is supposed to be easy, so I decided to put Questwealth Portfolios to the test myself. Right off the bat, I made a mistake: I clicked “open an account” on the main Questrade homepage, which led me through the process of opening a self-directed account – not my intent. After noticing my mistake and discarding that application, I found the right page to sign up for Questwealth Portfolios and got started.
Once you create a user ID and password, Questwealth Portfolios lets you start your questionnaire. This questionnaire is the basis for determining the intent of the investment account you are opening. It asks questions about your age, your net worth including liquid and illiquid assets, and your objectives for your investments.
The questions in the questionnaire roughly correspond with the five different portfolio options available through Questwealth Portfolios, and I answered how most Canadians with more than a 15-year time horizon for their investments would answer – with medium to high-risk tolerances for market fluctuations.
Once I got to the end of the questionnaire (which was visually beautiful, by the way) Questwealth Portfolios gave me my ideal portfolio: The Growth portfolio. This portfolio was medium-high risk and consisted of about 80% equities, 18% fixed income, and 2% cash. This screen is where you would make your portfolio an SRI portfolio as well.
Saying a portfolio is 80% equities and 20% fixed income is one thing, but I was also curious about what the actual holdings were. Right below the overview was a more in-depth breakdown of the contents of the portfolio. Questwealth Portfolios builds their portfolios using ETFs, and you can easily see the exact ETFs and their weightings above. This information was all available before I ever transferred a single dollar to Questwealth Portfolios.
After I finished my application, I was redirected to the Questwealth Portfolios dashboard, which was crisp and clean and easy to navigate. The next day I also received a call from a Questwealth Portfolios representative to ensure I was comfortable with my account – this was completely unexpected but appreciated, and it certainly seems that the old complaints about Questrade’s poor customer service have been resolved.
If We Could Change One Thing
Questwealth Portfolios is one of the strongest robo advisors on the market today. The website is great, the fees are low, and the performance of their funds are solid. The company itself has been around a long time, and they are the fastest growing robo advisor in Canada.
If there was one thing I could change about Questwealth Portfolios, it’s that they actively manage the portfolios. Most robo advisors rely on passive index-based investing, but Questwealth Portfolios boasts a team of investment advisors that are constantly adjusting strategies to take advantage of market conditions.
There is scant evidence that actively managed portfolios outperform passively managed ones in the long run, in fact, entire books have been written on the topic. Smart investors know this, and the higher-ups at Questrade must realize this too – after all, they are the original champions of DIY, ETF based investing.
Fortunately, because they have made the past performance of their portfolios public, it’s easy to see that active management hasn’t hurt their returns, and they aren’t charging higher fees for this premium service, so there is no negative result to this setup.
Act Now and Open a Questwealth Portfolio Account
If you’ve made it to the end of this review (first of all, congratulations) and you’ve decided that Questwealth Portfolios are the right option for you, grab the following details and click here to open a Questwealth Portfolio account. You’ll need:
- Your name and date of birth
- Your social insurance number
- Your government issued photo ID
- You’ll also need access to a printer to sign documentation if you’re planning to transfer funds that are held in a TFSA or RRSP at another institution
The Bottom Line
With its easy use, low fees, and SRIs, this is an excellent robo advisor for online investors in Canada. There’s no evidence to support actively managed portfolios, but Questwealth Portfolios isn’t charging you more for it, so it’s not a deal breaker. A winner!
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