Wealthawesome Score: 2.5/5
- Provides investing advice
- Offers you insurance brokerage services
- Offers you borrowing solutions
- Low-cost financial planning solution
- A sexual harassment scandal forced the company to recently fold and reopen
Summary: Planswell is a robo-advisor that offers you more services like insurance and mortgage brokerage and investing and financial advice. They must earn back the public’s trust.
Planswell is a controversial robo-advisor company. The Toronto startup recently was forced to completely halt all operations due to a sexual harassment claim from one of it’s employees.
This Global News article contains sordid details about the incident. It seems that there was alleged unscrupulous behaviour from the perpetrator as well as the CEO for firing the whistleblower.
This type of behaviour is completely unacceptable and has greatly damaged the reputation of the company.
I’ll give an assessment of the services provided by Planswell, but the scandal will affect the opinion and rating that I give them. The ethics of upper management is an important piece of how trustworthy a company is.
There is an increasing interest in robo-advisors, especially among Canadians who do not have the knowledge or confidence to take full charge of their investment portfolio.
In my Planswell review, I will discuss this financial planning service that offers investing, insurance, and mortgage brokerage services. The robo-advisor has created a place for itself as both a DIY investing and a traditional active fund management service.
Hopefully, my Planswell review will help you get the information you need to decide whether you should work with the robo-advisor.
The average Assets Under Management per user in the robo-advisor segment is US$10,502 in 2020.
Things to Consider Before Using a Robo Advisor
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 understand the risks involved with investing.
- You understand your investment goals and tolerance for risk.
- You want certified experts to handle investment decisions for you.
- 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 want face-to-face time with financial advisors.
- You like buying and selling stocks to rebalance your portfolio.
What is Planswell?
Planswell is a Canadian fintech company that Eric Arnold founded in 2016. The team at Planswell includes professionals with qualifications in various fields, including mathematics, economics, business, and computer science, apart from solid financial and technical credentials like CFAs, CAs, CPAs, PFPs, CFPs, CIMs, and LLQPs.
Planswell entered the robo-advisor segment with a unique approach to differentiate itself from most of its peers. Apart from offering typical robo-advisor services like managing investment portfolios, Planswell also provides investment services, insurance, and mortgage services.
The services offered by Planswell come under its integrated umbrella of providing a wholesome financial planning service to its clients.
Features and Benefits
In this section of my Planswell review, I will discuss the several features and benefits that you can avail through this robo-advisor.
Planswell differs from most robo-advisors because it caters to their needs as a one-stop-shop solution for any financial services they require. When Planswell takes on the capacity of acting as an insurance or mortgage broker for you, the company receives a small percentage of commission on the products you purchase. It offers you lower-than-average industry commissions to make it more profitable to work with the robo-advisor.
As far as investing fees are concerned, Planswell charges the following fees depending on your account’s size. You should know that the fees do not include MERs for the underlying Exchange-Traded Funds (ETFs).
- $0 – $100,000 = 0.50%
- $100,000 and above = 0.40%
The MERs on the underlying ETF portfolios comprise a fraction of a percent, typically 0.20%. It is considerably lower than the MER of typical funds like the RBC Balanced Fund Series A has an MER of 2.15%. Another good thing I found about Planswell’s pricing is that there are no fees for deposits, withdrawals, trades, or rebalancing in the portfolios. It also does not add any GST/HST.
Planswell offers several types of investment accounts to its customers, including:
- Registered Retirement Savings Plan (RRSP)
- Spousal RRSP
- Tax-Free Savings Account (TFSA)
- Registered Education Savings Plan (RESP)
- Locked-In Retirement Account (LIRA)
- Registered Retirement Income Fund (RRIF)
- And non-registered investment accounts (individual and joint)
You can transfer your current accounts to Planswell with the help of their Client Success Team. If there are any penalties you may have to incur for the transfer from your current platform, Planswell reimburses you for those.
When you sign up for Planswell, everything is about a wholesome financial plan created for individual customers. Planswell differentiates itself by going beyond helping its customers deal with their investment goals. It focuses on three streams for helping you create a financial plan.
It asks you a series of 40 questions when you sign up. These questions help Planswell create a financial plan suited to your financial needs and address various financial goals you might have.
After you complete your Planswell questionnaire, the robo-advisor asks you several more questions to determine your tendencies as an investor.
Based on your answers, Planswell determines your risk tolerance and provides you with a corresponding portfolio recommendation.
The funds are invested in Planswell Portfolios and managed by Higgins Investment Group Inc., an investment management firm. The portfolios consist of low-cost ETFs, similar to what you can expect from the likes of Wealthsimple.
Part of Planswell’s unique services compared to other robo-advisors in Canada is its insurance brokerage. Completing a Planswell financial plan will also open up the opportunity for you to go for an insurance plan which matches your investment style and financial situation.
The experts at the company will walk you through how the insurance plan you choose will affect your cash flow currently and in the future.
Once you finalize your plan, you can choose to be referred to an insurance representative through Planswell, or choose your insurance provider.
Planswell provides you with three types of insurance that you can choose from:
- Disability insurance
- Term-Life insurance
- Critical illness insurance
All three can play a vital role in your financial plan. Most Canadians do not have insurance, according to a study conducted by investment firm Edward Jones. Not having the appropriate insurance in case you experience unforeseen life events can critically hamper your financial wellbeing.
Planswell offers its services to ensure you can get access to adequate insurance without having to shop around through other sources.
When you fill the questionnaire provided by Planswell, you will also answer questions regarding your mortgage and other debt you may be carrying. Planswell collects the information and devises a strategy to help you pay down the high-interest debt you owe more quickly.
The robo-advisor also helps you find a mortgage plan appropriate for you based on your financial goals and situation. It acts as a mortgage broker by informing you of the best rates and terms currently available in the market.
Instead of relying on your bank and going with any mortgage plan, it offers you, Planswell can help you find the best terms on the mortgage by doing all the legwork for you.
I think the best thing about Planswell is an overall approach to financial planning that covers more than the aspect of investment management for its customers. Typically, we tend to think of investments, insurance, mortgage, debt, and other things separately and not connected to each other.
Planswell, as its name suggests, comes up with a well-formulated plan to find you a complete approach to your financial planning. The robo-advisor consolidates the various aspects into one place where it becomes more straightforward to manage within your financial plan.
Financial Planning and Updates
Planswell has a more hands-on approach. After it helps you come up with a complete financial plan from your home’s comfort when you open an account, it takes things a step further.
The robo-advisor reminds you to update your plan twice each year to make sure that the plan remains relevant to your financial needs as they change.
A Personal Touch
One misconception that many people have about robo-advisors and online banks is that they lack the personal touch of an actual human, financial advisor. Many people are more comfortable talking to a human when they need help with their financial situation instead of blindly relying on recommendations made to you by the calculations done using complex computer algorithms.
Within 24 hours of filling out the questionnaire with Planswell, you will get a phone call from one of their client success team members. Without having to listen to high-pressure sales pitches, you can rely on getting the chance to ask any questions you have regarding their services.
Safety and Security
Your personal information is stored and protected using bank-level encryption to ensure your privacy. BBS Securities Inc. is a third-party custodian that takes on the responsibility of storing your funds.
The Canadian Investor Protection Find (CIPF) insures BBS Securities Inc. In case it goes bankrupt, BBS is also insured by Lloyd’s of London with coverage of up to $10 million per account.
I scoured the internet to find reviews of customers who have been using Planswell for their financial planning needs. I found several positive reviews on Reddit and a few that were not so good.
This review is from someone who signed up for Planswell and did not end up using the insurance they were providing. What caught my attention was a lack of pushy sales pitches that you might usually expect with insurance providers. This was part of the Reddit AMA by the CEO of Planswell.
The Not So Good
One Reddit review on the not-so-good side was a client who did not have an outstanding initial experience, but her financial expertise managed to help her get good use from the robo-advisor.
Planswell vs. Wealthsimple
Wealthsimple is the most popular robo-advisor product in Canada. It is, by far, among my favorites in the market. It provides you with an excellent combination of benefits, features, and low fees.
Planswell offers you plenty of useful features as a robo-advisor and further features and benefits that other robo-advisors like Wealthsimple do not.
Planswell vs. Questwealth
Questwealth is among the latest entrants in the robo-advisor product market in Canada. Its parent company, Questrade, has been around in Canada for more than two decades, and it is not a newbie in the world of wealth management.
Questwealth came into the market with the increasing popularity of robo-advisors. It offers several benefits you can expect from robo-advisors, and it provides you with the option of choosing Socially Responsible Investment portfolios. Unlike Planswell, it does not provide you with other financial planning services like insurance and mortgage brokerage.
Planswell vs. WealthBar
WealthBar was the first robo-advisor to enter the market in Canada. Founded in 2013, its AUM grew to more than $225 million within five years. It offers a wide variety of accounts like Planswell and several features and benefits.
However, it does not offer the same wholesome financial planning solution that you can get with Planswell.
Robo-advisors, typically, have a reputation for providing portfolio management services to their clients. However, there is a lack of perspective on other aspects that can affect your overall financial planning, including your debts and insurance.
Planswell offers you the traditional robo-advisor services to help you manage investment portfolios that can grow your wealth. It also provides you with an all-around financial planning solution covering the aspect of a mortgage, debt repayment, financial advice, and insurance. These are features that are unique to this robo-advisor.
I did find it challenging to find relevant information regarding the portfolios it offers. You can check out Planswell on its website here.
If you’re looking for a portfolio management service, I do not give Planswell the Wealth Awesome stamp of approval. If you are looking for help in your overall financial planning, I will give it a cautious thumbs-up.
However, the company will have to redeem itself and earn back the trust of the public after it’s recent scandal. There’s no room for discrimination in any situation. I would not use Planswell for now when there are other reputable companies with ethical leadership.