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Wealthsimple Invest vs CI Direct Investing (formerly WealthBar): Which robo-advisor is right for you?
Online advisors use algorithms to manage your savings. Here's a comparison of Wealthsimple Invest and CI Direct Investing (formerly WealthBar).
Wealthsimple Invest and CI Direct Investing (formerly WealthBar) are both online financial companies in Canada that feature low costs and automated investing to help grow your money. But there are some features that differentiate the two companies that might make one or the other more attractive, depending on your personal situation.
Wealthsimple Invest and CI Direct Investing (formerly WealthBar): At a glance
Both companies were founded by Canadians and headquartered here. They started about the same time, although Wealthsimple Invest has more assets under management.
|Wealthsimple Invest||CI Direct Investing (formerly WealthBar)|
|AUM||$5 billion||$275 million|
|People using||175,000||Not publicly disclosed|
How they work
Wealthsimple Invest and CI Direct Investing (formerly WealthBar) are sometimes referred to as “robo-advisors”, meaning your investments are managed by algorithms programmed to maximize the return on your investment. This differs from traditional financial advisory firms that employ humans to manage your money. Robo-advisors constantly rebalance your portfolio – in other words, tweaking the investment mix by buying and selling assets – depending on the level of risk you are comfortable with.
One of the advantages of using software to make investment decisions is that it is cheaper than hiring humans to do the same work, the premise being that the algorithm can make better investment decisions than people can.
Fees, minimum deposits and expense ratios
It’s time to get to the brass tacks: which firm charges lower fees? Both Wealthsimple Invest and CI Direct Investing (formerly WealthBar) are generally cheaper than traditional investment firms, but how much you pay depends on how much you invest. Wealth management firms typically charge an advisory fee to manage your money. This is expressed in a percentage per year of your total money invested. In Canada, the typical management fee for an actively managed mutual fund is about 2.3%. That means if you have $100,000 invested you’re paying about $2,300 in management fees annually.
Wealthsimple Invest and CI Direct Investing (formerly WealthBar) are significantly cheaper. Below is their fee structure.
Fees for basic plans
|Wealthsimple Invest||CI Direct Investing (formerly WealthBar)|
|Management expense ratio (MER)*||~ 0.2%||~ 0.25%|
*The underlying funds in your portfolio are the ones that charge the MER fee, not Wealthsimple Invest or CI Direct Investing (formerly WealthBar). That’s why the cost will vary depending on the fund and the company.
One key difference in comparing Wealthsimple Invest vs CI Direct Investing (formerly WealthBar) is the minimum amount you must invest. Wealthsimple Invest doesn’t have one, whereas you have to put up at least $1,000 to begin investing with CI Direct Investing (formerly WealthBar).
If you invest over $100,000 with Wealthsimple Invest you can unlock a premium account called the Black plan. It entitles you to an annual in-person meeting with a Wealthsimple Invest financial advisor and other perks such as access to VIP lounges at some airports. If you invest over $500,000, you can unlock Wealthsimple Invest Generation and get access to financial advice “whenever you need it”.CI Direct Investing (formerly WealthBar) pairs you up with a certified financial planner for a free introductory session to review your situation. Its website says clients receive ongoing reviews with the advisor to keep their financial plan on track.
What types of accounts can I open?
The types of account you can open at the two advisor firms are almost exactly the same. Both offer the more popular and well-known ones like RRSPs, TFSAs and RESPs, as well as general savings accounts, RIF/RRIFs, non-registered accounts and LIRAs.
What can I invest in?
Both CI Direct Investing (formerly WealthBar) and Wealthsimple Invest offer ETF portfolios tailored to your risk preferences. These exchange-traded funds track various market indices whose underlying securities range from government and corporate bonds to emerging market, US and Canadian equities.Wealthsimple Invest offers portfolios that focus on themes such as socially responsible and Halal investment options.CI Direct Investing (formerly WealthBar) offers a clean technology portfolio and what it dubs a “private investment” portfolio that invests in so-called alternative asset classes such as real estate and private equity.
Customer support and technology
Both Wealthsimple Invest and CI Direct Investing (formerly WealthBar) run in-house blogs featuring a lot of general advice about finance and investing. Both sites also have extensive “general questions” sections to answer the most common inquires about how their services work. Both also offer mobile apps with the full functionality of their websites.Wealthsimple Invest offers a free video series on its site meant to teach people about investing, in addition to financial resources like retirement planning calculators. However, if you wish to contact someone at Wealthsimple Invest to discuss its services, you need to do it via an email form on the website.CI Direct Investing (formerly WealthBar) also offers financial resources on its site and allows you to chat in real time with a customer service representative if you have questions about its services.
Bottom lineWealthsimple Invest and CI Direct Investing (formerly WealthBar) are remarkably similar services. The biggest single difference is that CI Direct Investing (formerly WealthBar) requires a $1,000 minimum investment to get started while Wealthsimple Invest has no minimum investment. Wealthsimple Invest‘s fees are slightly lower if you’re investing less than $100,000, although CI Direct Investing (formerly WealthBar)‘s fees become more attractive once you break the $500,000 investment barrier.
Another factor to consider is access to human financial planners. Investing can be overwhelming at times and also confusing. Wealthsimple Invest offers a financial planning session once you invest $100,000. CI Direct Investing (formerly WealthBar) advertises ongoing access to its financial planners for all clients, including a free introductory review of your finances.
To learn more about robo-advisors, read our handy guide here.
Frequently asked questions about Wealthsimple Invest vs CI Direct Investing (formerly WealthBar)
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