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What Is a Robo-Advisor?
A robo-advisor is an online investment service that automatically builds and manages a portfolio for you based on your goals and risk tolerance. They use algorithms to create diversified portfolios of low-cost ETFs.
Think of it as hiring a financial advisor, but the "advisor" is software that follows proven investment principles consistently.
How Robo-Advisors Work
- You answer questions about your goals and risk tolerance
- The platform recommends an appropriate portfolio
- You deposit money and the robo-advisor invests it
- Portfolios are automatically rebalanced
- Some offer tax-loss harvesting on larger accounts
Popular Canadian Robo-Advisors
Wealthsimple Invest
- Fee: 0.4-0.5% annually
- Minimum: $0
- Features: SRI and Halal options, tax-loss harvesting
Questwealth
- Fee: 0.25% annually
- Minimum: $1,000
- Features: Lower cost, part of established brokerage
CI Direct Investing (WealthBar)
- Fee: 0.35-0.6% annually
- Minimum: $0
- Features: Access to human advisors
BMO SmartFolio
- Fee: 0.4-0.7% annually
- Minimum: $1,000
- Features: Bank backing, integration with BMO accounts
Commonly Cited Advantages
- Automated investing — no active decisions required
- Automatic rebalancing maintains target allocation
- Generally lower cost than traditional advisors
- May reduce emotional decision-making
- User-friendly interfaces in many cases
💡 Note: Robo-advisors are often considered by those who prefer automated portfolio management. Individual experiences may vary.
Cons to Consider
- More expensive than DIY ETF investing
- Less personalized than human advisors
- Limited customization options
- No complex planning (estate, tax optimization)
- You still need to understand the basics
Who Commonly Considers Robo-Advisors?
Robo-advisors are often considered by those who prefer a hands-off approach and are willing to pay a fee for automated management. They may be less suitable for those with complex financial situations requiring personalized professional advice.
As with any financial platform decision, research multiple options and consider your personal circumstances before choosing.
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About Maple Wealth Guide
Maple Wealth Guide is an educational publication that explains investment concepts, retirement-related topics, and personal finance information for Canadians aged 50 and over. We are not licensed financial advisors and do not provide personalized recommendations. All content is for educational purposes only.
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