Today we’re going to take an in-depth look at the Questwealth Portfolios and see how they stack up to other robo advisors in Canada. We’ll take a deeper look at this revamped online investing platform in Canada.
With low fees, SRIs, outstanding customer service, and an easy-to-use website, Questwealth Portfolios is an excellent robo advisor for online investors in Canada.
- Questwealth Portfolios offers some of the industry’s lowest management fees: 0.20% – 0.25%
- A wide variety of funds and investment options, such as socially responsible investing
- Low minimum investment requirement ($1000 minimum to open an account)
- A user-friendly platform makes investing easy and enjoyable
- Award-winning customer service
Questwealth Portfolios is a robo advisor that falls under the umbrella of Questrade Wealth Management. Established in 1999 and headquartered in Toronto, Questrade has $8 billion in assets under management and has earned the title as Canada’s fastest growing online brokerage, partly thanks to their low fee structure and exceptional trading platforms. In short: this company knows what they’re doing with your money, and it’s why Questrade is our top pick for the best online brokerage in Canada.
As a leader in the DIY online investing world, Questrade has now extended its services to include actively managed portfolios. Originally called Portfolio IQ, these actively managed portfolios have been available since 2014, but were recently relaunched in 2018 as Questwealth Portfolios. So far, we like what we see, with Questwealth Portfolios offering all the hallmarks of a good robo advisor: exceptionally low fees, an easy-to-use interface, and an entirely online presence coupled with excellent customer service. It’s the perfect option for investors who want low fees but aren’t quite ready to venture into DIY investing yet.
Questwealth Portfolios Features
There are many reasons why Questwealth Portfolios stands out as one of the best robo advisors in Canada. In fact, they’re Canada’s fastest growing online brokerage, with twenty years in the Canadian market and $9 billion in assets under management. They’ve even won the award for one of Canada’s best-managed companies eight times.
Aside from all of that, though, here are some of the excellent features and services provided to their clients:
|Accounts||TFSA, RRSP, RESP, Spousal RRSP, LIRA, Locked-In RRSP, RIF, LIF, cash, joint cash, corporate cash|
|Tax loss Harvesting||Yes|
|Automatic portfolio re-balancing?||Yes|
|Advice Type||Both human and automated|
|Socially responsible investing||Yes|
|Access||Website, mobile app, email, phone, virtual chat|
|Transfer Fees||Pays transfer fees up to $150 per account|
|Promo:||New customers receive up to $10,000 managed free for a year.|
- Low Fees: Questwealth Portfolios offers some of the industry’s lowest management fees, ranging from 0.20% to 0.25% based on the amount you have in deposits. The ETFs in the Questwealth Portfolios have portfolio MERs ranging from 0.17%-0.22%. That means you could get a portfolio with a total fee of only 0.42% (0.25% management fee + 0.17% MER). For extra savings, link your account with the accounts of friends and family members to take advantage of reduced fees.
- Free Tax-Loss Harvesting: This feature only concerns investors with taxable accounts but can be a useful tool if you are investing money outside of your RRSP or TFSA. Tax-loss harvesting lowers your taxes on investment gains by offsetting it with investment losses. Questwealth’s portfolio managers use tax-loss harvesting to lower capital gains tax in cash accounts.
- Socially responsible investing options (SRIs): Questwealth’s socially responsible investing option lets you invest in companies that focus on environmental, social and corporate governance qualities. Their SRI portfolios have the same diverse set of risk profiles as the other Questwealth Portfolios, ranging from aggressive to conservative. But you’ll get the same low management fees as all other portfolios, with only a slightly higher MER (0.21% to 0.35%). This option is available at sign up, so you can invest responsibly right off the bat.
- Actively managed portfolios: Questwealth actively manages your investments, using a team of experts who watch the market and adjust your portfolio when needed. Using research, the portfolio managers aim to limit losses and look for opportunities to improve your returns. Usually, higher fees accompany actively managed funds, but this isn’t the case for Questwealth clients.
- Automatic Re-Balancing: Once your portfolio is invested, you can “set it and forget it.” Your portfolio’s asset mix is constantly monitored and adjusted when market conditions change.
- Excellent Customer Service: Questwealth offers support over the phone, through virtual chat, or by email. The “Chat with Us” feature is especially handy, allowing clients to instant chat with a Questwealth representative (Monday to Fridays from 8:00 AM to 8:00 PM EST). They also have a searchable self-help function that provides information and support on a range of topics. Questrade received the 2018 DALBAR Seal for Service Excellence — a prestigious award that recognizes service leaders within the financial services industry.
- Paid Transfer Fees: When switching to Questwealth, some financial institutions may charge you a transfer fee. Don’t sweat it – Questwealth will rebate your transfer fees of up to $150 per account. This is a good deal considering transfer fees can be pricey at most places.
- Reinvested Dividends: Dividends you receive are automatically reinvested so your money never stops working for you.
Compared to other robo advisors, Questwealth Portfolios offers some of the most competitive fees in Canada:
|Fees:||0.25% from $1,000 - $99,999 |
0.20% from $100,000+
|ETF MERs:||● 0.17% to 0.22% |
● SRI Portfolios: 0.21%-0.35%
On a $20,000 balance, that’s about $4 per month – less than what most banks charge for their chequing accounts. 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. Ultimately, the lower fees mean you’ll save up to multiple percentage points every year.
A few percentage points may not sound like much, but they add up over the years. For example, let’s say you 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 Questwealth, 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, Questwealth 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.
Another bonus: Questwealth’s SRI portfolios are built with ETFs, which means the fees are comparable to the regular portfolios. So you’ll pay the same flat rate of either 0.25% or 0.20% (depending on how much you have invested).
As outlined above, each portfolio does have its own Management Expense Ratio (MER) added to the fees, ranging from 0.17% to 0.22%. Further, the MER can reach up to 0.35% for an SRI portfolio. Those fees are disclosed in the portfolio section.
Pros and Cons
When deciding if Questwealth Portfolios is right for you, consider these pros and cons:
|Low fees: 0.20% to 0.25% (an industry leading low)||Actively managed funds|
|ETF MERs: 0.17%-0.22% (highly competitive)|
|Access to human advisors|
|Offers affordable socially responsible investment portfolios|
|Excellent transparency: information about Questwealth Portfolios’ performance is published on the website|
|Free tax-loss harvesting|
Questwealth’s Investing Model
Questwealth takes a unique approach to investing. They aren’t just your typical “set it and forget it” robo advisor, as they offer a much higher level of touch.
After initially signing up for an account (which by the way is super easy), you’ll be asked several questions to help Questwealth understand your investment goals, risk tolerance, and overall preferences for managing your money. Then the robo advisor’s algorithm will match you with one of these five portfolios. Each 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.
Questwealth Portfolio Options
Currently, there are five standard portfolios you can select from:
- Aggressive: Designed for high-risk investors, with a portfolio that has 100% equity
- Growth: Not as aggressive as “Aggressive” but still layering in risk, this portfolio is designed for medium to high-risk investors, holding 80% equity and 20% fixed income
- Balanced: Designed for medium risk investors, holding 60% equity and 40% fixed income
- Income: Designed for medium to low-risk investors, this portfolio has 60% fixed income and 40% equity.
- Conservative: Designed for low-risk investors, reducing risk as much as possible (which also reduces upside) by keeping 80% of your balance in fixed income and only 20% in equity
While these portfolio options may seem limited – especially since some robo advisors offer as many as 70 – we’re in the “keep it simple” camp. For the vast majority of Canadians who are investing their money for retirement, five portfolio options are more than enough. If you have a unique situation (e.g. 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 customers, such as 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.
If you’re wondering how Questwealth’s portfolios have performed in the past, the information is readily available on the website. You don’t even need an account to access these public reports, and you can view this information before committing your money to Questwealth. This transparency gives you peace of mind and also an expectation of how the fund will perform over the long term. Of course, bear in mind that past performance never guarantees future results.
After you’ve chosen a portfolio that matches your risk tolerance, it’ll be actively managed. This means that a human being is shuffling things around for you, not a computer algorithm. This has the potential to add a lot of value, as sometimes there are intuitive moves that a human can make that a true robo advisor can’t – since it sticks to a rules-based algorithm.
Beyond this, Questwealth’s portfolios work for you in four key ways:
- You’ll have real-time rebalancing. This doesn’t mean your portfolio is rebalanced because it’s “that time of year” – it’s rebalanced when it makes sense from an investment perspective. For example, when the market is down, that’s a wonderful time to buy.
- You’ll have lowered tax obligations. The portfolio managers handling your money use tax loss harvesting to reduce your tax impact and save you money in the long-run.
- You’ll feel comfort with proven historic returns. While past performance doesn’t indicate future profitability, it doesn’t hurt to helping you feel confident that Questwealth knows what they’re doing. In fact, four out of five of their portfolios have over 10 years of historical performance.
- You’ll get your dividends reinvested. Instead of dividend-paying stocks just dumping small chunks of cash into an account that earns no interest, Questwealth will automatically invest your dividends for you, putting your money right back to work in your portfolio.
How Does Questwealth Compare?
Taking features and fees into consideration, Questwealth definitely stands out as one of the best robo advisors in Canada. Here are a few things to consider:
- Hybrid model: Unlike most robo advisors, Questwealth uses a hybrid approach – your investments are actively managed by experts who watch the market and adjust your portfolio when needed. This is a unique model that isn’t used by most robo advisors.
- Rock bottom fees: Considering the premium services offered by Questwealth, their fees are highly competitive when compared to other leading robo advisors in the industry.
- Five portfolio options: Each are built from ETFs and suited to a specific risk tolerance. Other robo advisors in Canada may offer more investing options (even up to 70 portfolios), but for most investors, five portfolios are more than adequate.
- Automatic re-balancing: Your portfolio is monitored by Questwealth Portfolios and is automatically rebalanced on your behalf – a standard feature of most robo advisors.
As mentioned above, Questwealth uses a hybrid model, whereby their experts monitor and reallocate your portfolio when necessary. This is unusual for a robo advisor, and typically, active management translates into higher fees. However, even with this extra service, Questwealth’s fees remain much lower than the competition.
Before you get too excited, active management may not be a desirable feature for some investors. There is limited evidence that actively managed portfolios outperform passively managed ones in the long run. Smart investors know this, and Questwealth must too: after all, they are the original champions of DIY, ETF-based investing.
That being said, looking at the past performance of their portfolios, it’s clear that active management hasn’t hurt their returns, and Questwealth isn’t charging higher fees for this premium service. So there isn’t really a downside to this setup.
If you’re interested to learn how Questwealth Portfolios compares to other robo advisors on the market, we have it covered in our Complete Guide to Canada’s Robo Advisors.
|Questwealth Portfolios||0.20 – 0.25%/year|
+ average 0.19% MER
|Wealthsimple||0.4 - 0.5%/year|
+ average 0.20% MER
|BMO Smartfolio||0.4 - 0.7%/year|
+ average 0.24% MER
|Nest Wealth||$20 - $80/month + average 0.13% MER||None|
|Justwealth||0.4 - 0.5%/year|
+ average 0.25% MER
|ModernAdvisor||0.35 - 0.5%/year + average 0.25% MER||None|
The beauty of Questwealth is that you have access to many different asset classes by holding just a few key ETFs. Since ETFs are essentially baskets of hundreds (sometimes thousands) of stocks, you’re instantly diversified. The only thing you need to think about is what level of risk you’re willing to take on (which is where the different portfolio options come in).
With that being said, here are the broad asset classes you can get an ETF in:
- Canadian Equity – these are all Canadian-based companies and stocks.
- U.S. Equity – these are all U.S.-based companies and stocks.
- International Equity – companies based outside of Canada and the United States.
- Fixed Income – securities such as bonds are considered fixed income.
- Cash – this is just plain old cash, earning almost nothing, but losing nothing (unless you factor in inflation, of course).
Now as I said, each of these is weighted differently, depending on the portfolio you choose. Here’s the breakdown for the:
The Growth Portfolio:
The Balanced Portfolio:
The Income Portfolio:
The Conservative Portfolio:
User Experience: A Peek Inside Questwealth Portfolios
Questwealth Portfolio’s website falls on the higher end of the design quality spectrum. The website is sleek and user-friendly. Opening the Questrade website, you have the option to choose self-directed investing or Questwealth Portfolios.
Signing up is supposed to be easy, so we put Questwealth Portfolios to the test. Right off the bat, we made a mistake: clicking “open an account” on the main Questrade homepage led us through the process of opening a self-directed account – not our intent. Watch out for this. After noticing the mistake and discarding that application, we found the correct sign-up page 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 roughly correspond with the five different portfolio options available through Questwealth Portfolios. We modelled our answers on 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.
At the end of the questionnaire (which was quite visually appealing, by the way) Questwealth Portfolios gave us our ideal portfolio: The Growth Portfolio. This portfolio is medium-high risk and consists of about 80% equities, 18% fixed income, and 2% cash. On this screen, you can also make your portfolio an SRI portfolio.
Saying a portfolio is 80% equities and 20% fixed income is one thing, but we were also curious to know about the actual holdings. Luckily, this information was easy to find: it appeared right below the overview and provided an in-depth breakdown of the portfolio’s contents. Questwealth Portfolios builds their portfolios using ETFs, and you can easily see the exact ETFs and their weightings (see below). This information was all available before we ever transferred a single dollar to Questwealth Portfolios.
After finishing the application, we were redirected to the Questwealth Portfolios dashboard, which was crisp, clean, and easy to navigate. The next day, we also received a follow-up call from a Questwealth Portfolios representative to ensure we were comfortable with the account. This was completely unexpected but appreciated, and it certainly speaks to Questrade’s reputation for providing exceptional customer service.
Sign Up Process
From our testing, signing up with Questwealth Portfolios is a cinch. The entire process is done online and here’s what you need to sign up:
- Your email address
- Your full name and home address
- Your social insurance number
- Your phone number
- Government-issued photo ID (and the ability to either take a picture of it or scan it)
- 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
Once you’ve opened an account, the last step is to transfer funds to from your bank into your Questwealth Portfolios account.
Questwealth Portfolios is one of the strongest robo advisors on the market, and it’s obvious why. Offering low fees, SRIs, exceptional customer service, and an easy-to-use website, this is an excellent robo advisor for online investors in Canada. The past performance of their funds is also solid, and as a company, Questrade has been a leader in the industry for decades. While actively managed funds don’t appeal to everyone, Questwealth Portfolios isn’t charging you more for it, so it’s certainly not a deal breaker.
The bottom line? Questwealth Portfolios is a winner in our books.
Editor’s note: This article was originally published in 2018 and has been updated to represent the current changes in 2020.