Are you looking for a low-cost robo-advisor that can offer you a variety of online portfolios based on your specific needs? I might have something in store for you.
I have used several robo-advisors over the years, and I think Justwealth could be an ideal product for many investors.
I’ve written this Justwealth review to highlight the essential qualities of this robo-advisor that offers quite a few unique features. I decided to write this comprehensive review of Justwealth to help you decide whether this is the right robo-advisor for you.
According to Statista, analysts expect the total Assets Under Management (AUM) in the Canadian robo-advisor segment to grow between 2020 and 2024 from US$8.8 billion to US$22.6 billion.
- Simple fee structure
- Over 70 different portfolio options
- RESP, USD, and income portfolios available
- Actual Registered Portfolio Manager for each account
- Several promos throughout the year
- $5,000 minimum account balance except for student, fresh grad, and RESP accounts
- The $4.99 minimum monthly management fee is a bit pricey for any accounts under $10,000.
- No Socially Responsible Investment options
Table of Contents
Things to Consider Before Choosing a Robo-Advisor
Robo-advisors provide investment management online with minimal to moderate involvement of humans, usually by investing in a portfolio of exchange traded funds (ETFs). They rely on the latest fintech developments to help you make the most of your investment capital.
Use a Robo-Advisor if:
- You don’t want to make your own self-directed portfolio.
- You want to pay low fees for investing your capital.
- You do not understand the risks involved with investing.
- You understand your investment goals and tolerance for risk.
- You like the idea of socially responsible investment.
Don’t Use a Robo-Advisor if:
- You want to learn about investing and ETFs and have a self-directed investment account.
- You prefer a lot of face-to-face time with financial advisors.
- You like buying and selling stocks to rebalance your portfolio.
How to Choose the Right Robo-Advisor
When you are considering robo-advisors, here are a few crucial factors you need to consider:
- Fees: The goal is to make the most of your investment to make more money. Getting a low-fee product that helps you grow your wealth is the most important factor.
- Portfolios Offered & Performance: When it comes to investment, you need to have a variety of options that align with your goals. You need a robo-advisor that offers you several types of portfolios suitable for a variety of investment goals and risk tolerance.
- Accounts Offered: There are various types of accounts available, and each offers its own features. You need to choose a robo-advisor that presents you with several account types to store your investment.
- Customer Service: Gauge the kind of customer support you can get from the platform. The level of customer support is crucial to help you make the most of your investment experience with a robo-advisor.
I’ve discussed these points and more in detail below in this Justwealth review.
What is Justwealth?
Justwealth is a robo-advisor product founded in 2015 by Andrew Kirkland and James Gauthier. The co-founders set out to create an online portfolio manager that offers Canadian investors a more justly priced service.
Working with their core team, the combined experience in investment management and financial planning of Justwealth’s team created this platform. Justwealth offers a comprehensive array of investment portfolios to its clients. Additionally, the platform offers customers more value by providing them with comprehensive financial planning and counselling to create a more beneficial solution for their long-term financial goals.
A member of the Portfolio Management Association of Canada (PMAC), Justwealth sees itself as the “… most comprehensive online portfolio management platform, committed to providing honest, smart, and cost-effective wealth management.” to its customers.
Features & Benefits of Justwealth
In this section of my Justwealth review, I will cover the features of the robo-advisor, a few unique offerings, and its benefits to give you a more comprehensive idea of what you can expect from the platform.
Justwealth Accounts Offered
Justwealth offers you a comprehensive selection of account types you can open with the robo-advisor to meet various investment goals using the robo-advisor, including:
- Individual Registered Retirement Savings Plan (RRSP)
- Spousal RRSP
- Tax-Free Savings Account (TFSA)
- Registered Retirement Income (RRIF)
- Registered Education Savings Plan (RESP)
- Non-registered Taxable Accounts
- Life Income Fund
- Locked-In Retirement Account (LIRA)
A noteworthy feature when it comes to accounts offered by Justwealth is that the online portfolio manager also offers US dollar accounts. If you have some greenbacks to invest along with loonies, the ability to invest with US dollars can be a substantial benefit for you.
Justwealth Portfolios Offered
Perhaps one of the best features of Justwealth is its wealth of portfolios.
When you go to the Justwealth website, click on the “get started” option on the screen. Once you provide sufficient information and open up an account with the platform, it will ask you a series of questions. Justwealth’s approach, to this point, is quite similar to what you would expect from most other robo-advisor products.
The platform asks you this set of questions to better determine your financial goals, risk tolerance, current financial situation, and much more to get a better picture of your unique requirements. Based on your response to its questions, it offers you a portfolio from an option of over 70 different low-cost Exchange-Traded Fund (ETF) portfolios using 42 different ETFs from nine different ETF providers.
The portfolios are divided into four general types to accommodate your investment goals over time:
Justwealth’s Starter Portfolios are designed to help you begin your investment and wealth accumulation journey with the platform. These portfolios consist of a balanced asset allocation towards fixed-income and equities.
Justwealth’s Growth Portfolios have a stronger inclination towards growth with a varying degree of aggression. The more aggressive the growth, the higher the risk and reward factor is with these portfolios.
Justwealth’s Income Portfolios lean more towards providing you reliable income, but they do not compromise on the growth of wealth.
Justwealth’s Preservation Portfolios present you with the most secure investments. The primary purpose is to provide your capital protection from risk with relatively nominal growth.
Justwealth offers you a breakdown of asset allocation for your specific portfolio to give you a more accurate idea of what your unique portfolio consists of.
Justwealth’s massive selection of portfolios is there because the people behind this online portfolio manager recognize that each investor has unique investment goals and situations. The experienced team with specialization in asset allocation and account management has engineered its various portfolios by using their expertise and algorithmic techniques to offer a full range of portfolios for various goals and risk tolerance levels.
For Example: Let’s consider that there is a retiree investor who is seeking a fixed income but is willing to take high risk. The approach typical online portfolio managers have is to either direct the investor to a low-risk and modest income portfolio or a high-growth portfolio with low income.
Justwealth offers a broader range of income-oriented portfolios that can provide a fixed income level without compromising on growth potential. While there is a certain degree of risk that comes with its more comprehensive income-oriented portfolios, the platform offers investors the option.
Justwealth aims to provide investors with a long-term investment solution to meet their life goals. It designs various portfolios to benefit you the best at the current stage of your life and your goals, which it determines using your responses. It means that the portfolio you have when you first open an account with the robo-advisor might be entirely different from your portfolio in a decade.
In addition to the uniquely constructed portfolios, Justwealth also offers you a dedicated portfolio manager for your account.
Each of Justwealth’s portfolios consists of a combination of a wide range of ETFs. Depending on the composition of your portfolio, you can see a substantial growth of your wealth invested in the account that keeps in line with long-term market returns. Here’s an overview of Justwealth’s performance for all of it’s portfolios.
The robo-advisor provides you with reports that track your portfolio performance, which accounts for several aspects to give you the best idea of how much returns your investments receive over time.
However, the real potential for investment returns from Justwealth comes from how much you save with fees using the platform. According to Justwealth, depending on how much you invest, you can save more than $500,000 over four decades using the robo-advisor because of the fees you will not need to pay as compared to say a mutual fund or traditional financial advisor.
All the amount you do not pay will add to your capital and experience compounded growth. I will discuss its fees in the next section to help you understand this better.
Justwealth also provides you with options for target-date portfolios. This is a way you can automatically adjust your long-term returns based on your need for the money. These portfolios automatically rebalance the asset allocation as you come closer to the target date and investment goals. The initial approach is towards riskier investments for faster growth of your portfolio. Over time, the money is moved towards safer investments to achieve your financial goal based on the timeline gradually.
It means that you can use the platform to set long-term investment goals that you can forget about after tying up your money to let it grow over time. You can use non-registered accounts to save for several other goals with different timelines and more specific purposes.
One of the main reasons that Justwealth’s co-founders created the platform was to provide Canadian investors with a more affordable online portfolio management and financial planning solution. Investors typically pay substantial fees for mutual funds products available, but robo-advisors like Wealthsimple and Justwealth are changing the landscape.
Justwealth has a straightforward fee structure that is divided into two tiers based on the account balance:
- $5,000 – $499,999 0.50% per year
- $500,000 and above 0.40% per year
However, if you have less than $25,000 in your account, you will need to pay $10 per month until your account balance crosses $25,000.
Apart from Justwealth’s management fees, you will also need to pay the standard fees for ETF Management Expense Ratios (MERs) that apply to every portfolio consisting of low-cost ETFs. The average MER fee charged by the ETF providers for Justwealth’s portfolios is around 0.20% but goes up to 0.25%.
It means that you can end up paying between 0.60% to 0.70% per year for using the platform. It is substantially lower than what you can expect for mutual fund MERs in Canada. According to Justwealth, the average equity mutual fund MER in Canada is 2.20%.
Justwealth has an entire page that the platform has dedicated to providing investors with all their pricing details. This includes every aspect of the charges you can expect to pay while using the platform.
Justwealth also explains its pricing structure and how it helps you save substantial amounts from increasing your potential returns compared to the typical mutual fund products available to Canadians. The example above clearly shows how much you can save just through the fees with Justwealth’s low-cost structure.
Compared to the active mutual fund average MER of 2.20%, you save up to 1.55% in fees each year if you use Justwealth that can translate to substantial wealth due to long-term compounded growth.
Unique Investment Offerings by Justwealth
Here are a few key benefits that Justwealth offers that differentiate it from other robo-advisors.
Custom Portfolios for High Net Worth Investors
Justwealth offers its services to all Canadian investors. However, it offers more customized solutions specialized to suit the needs of more high net worth investors. More affluent investors often look for a greater degree of customization options. The platform offers completely customized options for clients that invest more than $1 million with the robo-advisor.
Most robo-advisors and human portfolio managers tend to offer the same portfolio for taxable and tax-free accounts. It is not the most efficient approach when it comes to returns for investors with non-registered taxable accounts. Justwealth designs portfolios for tax-free accounts by modifying underlying assets to improve the after-tax performance of such portfolios.
RESP Target Date Portfolios
The RESP portfolio designed for your child’s education fund changes over time as they approach post-secondary education. The RESP Target Date Portfolios have a more aggressive structure in the initial years, and it becomes more inclined towards capital preservation as the maturity date for the portfolio comes closer.
US Dollar Portfolios
While Justwealth currently operates in Canada, it also garnered interest from Canadians who want to invest using US currency. It offers portfolios for these investors to invest in ETFs using US dollars.
Justwealth allows for in-kind transfers. The platform works with investors to help them realize gains over several years, and the platform takes responsibility for paying transaction costs since they do the selling for you.
Monthly Performance and Portfolio Profiles
To get a regular update on your portfolio’s performance, you can go to Justwealth’s Performance Page to review the past monthly performance data for all its available portfolios for at least 12 months.
It also offers you the chance to select specific portfolios to view further information about asset allocation, MER, risk level, and more.
Complimentary Portfolio Reviews
The platform also provides you access to view the opinion of its investment professionals on how your portfolio is invested without any charge. It merely requires you to provide a recent financial statement through its website, and Justwealth’s investment professionals will get in touch with you to give you a complimentary portfolio review.
Justwealth also offers investment solutions for institutional investors. This includes group RESPs that allow employees to leverage the platform’s low-cost ETF-based portfolios. The robo-advisor also offers corporate accounts for corporate treasury and investment accounts. Justwealth also has special institutional asset allocation experts who can help not-for-profit organizations achieve their investment objectives as well.
The platform also offers complimentary financial planning services to all its clients if they request it. The president and co-founder of Justwealth is a Certified Financial Planner like myself, and he believes that financial counseling should be free of charge for all clients.
Justwealth goes above and beyond to further educate its clients on information that can be relevant to them. It has a blog section on its website, which it consistently updates with new blogs to provide you with useful information in an easy-to-digest manner.
Justwealth also runs a series of promotions all year round to better service a broader client base. For instance, it launched a promotion to boost the investment options available for students and fresh graduates who might want to start investing but have limited resources.
Is Justwealth Safe and Legit?
Safety is a crucial factor when it comes to any online portfolio manager. Justwealth meets a fiduciary standard, which means it is obligated to consider your benefit above its own. Justwealth is also insured with the Canada Investment Protection Fund (CIPF) to cover account assets for up to $1 million. Justwealth uses BBS Securities as its custodian to hold the funds to provide you with further peace of mind.
Other robo-advisor products that I can compare Justwealth to are Wealthsimple, Questrade’s Questwealth, and BMO SmartFolio.
Justwealth vs. Wealthsimple
Wealthsimple is the most popular robo-advisor product in Canada. While both of them operate as online portfolio managers, there are a few critical differences between them. Wealthsimple charges an overall lower fee for smaller accounts with the platform.
Wealthsimple also offers a wide assortment of features that can boost better financial practices and savings for you. You can find out more about Wealthsimple in my Wealthsimple Review.
Justwealth vs. Questrade
Another robo-advisor in the Canadian market is Questwealth. This is the robo-advisor product made by Questrade. Questwealth has among the lowest fees when it comes to the entire robo-advisor segment despite having actively managed portfolios like Justwealth.
Justwealth also has a higher minimum investment amount compared to Questwealth. Questwealth has a $1,000 minimum investment amount, but you can keep adding smaller amounts to your account until you reach $1,000. To find out more about the platform, you can check out my Questwealth Review.
Justwealth vs. BMO SmartFolio
You might recognize the name for this one. BMO SmartFolio is the robo-advisor product that the Bank of Montreal released to announce its entry in the segment. The bank wanted to provide investors with a product in the increasingly popular segment, and it became the first among major Canadian banks to launch an online portfolio manager.
I think that it is a decent robo-advisor, but it has a higher fee structure and does not offer features as broad as Justwealth. Its fee structure is also sophisticated to understand. You can find out more about the platform in my BMO SmartFolio Review.
|Management Fees||0.40%-0.50% per year||0.40%-0.50% per year||0.20%-0.25% per year||0.40%-0.70% per year|
|Around 0.25%||Around 0.20%||0.11%-0.23%||0.25% – 0.35%|
Justwealth delivers on its promise of being an online portfolio manager and resource to seek financial counseling. It is a product that offers you a lower fee compared to typical mutual investment fund products, but it is slightly pricier than the likes of Wealthsimple. I also don’t think the $5,000 minimum will make the platform accessible to every investor.
However, its wide range of portfolios makes it a very attractive portfolio manager. You can check out Justwealth here. As for my verdict, Justwealth gets a Wealth Awesome thumbs up.