Are you in search of the ideal robo-advisor to help you fulfill your financial goals?
There are several robo-advisor products available in Canada. I can understand that choosing the right product can be a challenge with so many options.
I have used many robo-advisors myself in the past, and I’ve extensively researched most of the Canadian choices. Questwealth is one of my top robo-advisor picks in Canada.
My Questwealth review will hopefully help you understand whether this robo-advisor is suitable for you.
There was over $8 billion USD invested with robo advisors in Canada in 2020
Questwealth is a hybrid robo-advisor product that actively manages diversified investment portfolios to provide Canadians with a way to build substantial wealth for themselves.
- Industry-leading low fees
- Highly competitive ETF MERs
- Access to human advisors
- Offers socially responsible investment portfolios
- Free tax-loss harvesting
- Transparency about performance on the website
- Actively managed portfolio not proven to outperform
- Minimum requirement of $1,000
What is Questwealth?
Formerly known as Questwealth Portfolios IQ, Questwealth is the robo-advisor product that Questrade Wealth Management Inc., a subsidiary of Questrade Financial Group Inc., manages.
Questrade is an investment management firm based in Canada that started in 1999. The wealth management firm has over $25 billion in assets under management, and it has won Canada’s Best Managed Companies nine times.
Questwealth Portfolio IQ was rebranded to simply Questwealth Portfolios in November 2018. It offers Canadians a platform to create an investment portfolio of low-cost ETFs with exceptional customer support.
Questwealth can be ideal for investors who are not ready for DIY investing and want to enjoy low fees for wealth management services.
Questwealth offers some of the most competitive fee structures you will see in the market for robo-advisors in Canada. That is one of the main qualities that drew me to it.
The charges for using the robo-advisor and the management expense ratio (MER) for the ETFs that its portfolios consist of are attractive:
- 0.25% from $1,000 – $99,0000 managed
- 0.20% from $100,000 and above managed
ETFs MER Fees:
- 0.17% to 0.22% for normal portfolios
- 0.21% to 0.35% (for Socially Responsible Investing (SRI) Portfolios)
|Robo-Advisor||Fees (Management + MER: Normal Portfolio)|
|Questwealth||0.37% – 0.47% / Year|
|Industry Average||0.55% – 0.7% / Year|
Questwealth’s fees are exceptionally low compared to the rest of Canada’s robo-advisors.
Fee Savings Example with Questwealth:
If you invest $100,000 with Questwealth (non-SRI portfolio), expect to pay all-in fees of around $370 – $470 per year. For most of the other robo-advisors in Canada, expect to pay around $550 – $700 per year. Those hundreds of dollars will add up over the years.
Questwealth does not charge any hidden fees. No fee for trading, funds transfers, or for making regular contributions. The lower fees allow you to save up several percentage points each year gradually.
Saving a few percentage points each year might not seem attractive at first. However, the savings accumulate over time to help you a significant sum over time. As mentioned above, each ETF portfolio has an MER that depends on the underlying ETFs in that portfolio.
The MER can reach up to as high as 0.35% for an SRI portfolio, and these fees are mentioned in the portfolio section when you are selecting the type at Questwealth.
Questwealth Portfolios and ETF List Offered
In this section of the Questwealth Portfolios review, we will discuss the ETF portfolio options you can choose.
A Word About Robo-Advisors and Active Management
Most robo-advisors in Canada passively manage your investments, meaning they don’t actively trade the ETFs inside your portfolio.
Questwealth Portfolios takes a different approach, and actively manages your investments. It employs a team of expert financial advisors who keep tabs on movements in the market.
Using their experience and research, portfolio managers at Questwealth rebalance your portfolio to mitigate losses and seek opportunities to boost your returns.
Actively managed portfolios typically mean higher management fees, leading to underperformance of the market in the long term. That is not the case for the fees with Questwealth.
The company is able to impressively offer active management at a much lower fee than its passively managed competitors. This doesn’t guarantee Questwealth will outperform its passively managed peers, but it’s a good start.
Currently, the robo-advisor offers five standard portfolios you can consider:
- Aggressive: Aggressive portfolios are designed for investors with a high tolerance for risk. The portfolio consists entirely of equity.
- Growth: The growth portfolio is designed to grow investor wealth, but it is not as high-risk as the aggressive portfolio. This is a portfolio made for investors with a medium to high-risk tolerance. It holds 20% in fixed income ETFs and 80% in equity.
- Balanced: Designed for investors with medium tolerance to risk, it holds 40% fixed-income ETFs and 60% equity.
- Income: Designed for investors with a low to medium risk tolerance. The portfolio consists of 40% equity and 60% fixed income ETFs.
- Conservative: The conservative portfolio is for investors who want to minimize the risk to their capital. It contains only 20% in equity and 80% in fixed income ETFs.
Each Questwealth portfolio available comprises of a combination of the following low-cost ETFs:
- iShares Core Canadian Short Term Bond Index ETF
- iShares Core Canadian Universe Bond Index ETF
- iShares Core MSCI EAFE IMI Index ETF (CAD-Hedged)
- iShares Global REIT ETF
- SPDR Portfolio Emerging Market ETF
- WisdomTree Canada Quality Dividend Growth Index ETF
- SPDR Portfolio Total Stock Market ETF
The portfolios consist of a varying combination of these ETFs. Each portfolio can have five to seven of these ETFs to create the ideal ratio of equity and fixed income ETFs to reflect the risk and reward for the corresponding portfolio.
Socially Responsible Investing (SRI)
A winning feature that I like about Questwealth is its offering of Socially Responsible Investing (SRI) portfolios. SRI portfolios allow investors to invest their capital with ETFs that align with their moral values and beliefs.
SRI portfolios consist of social and corporate governance ETFs, low carbon ETFs, and Cleantech ETFs. These also include ETFs of companies with excellent track records for labor practices, renewable energy companies, and other socially and environmentally responsible ETFs.
Questwealth combines these ETFs to create five types of SRI portfolios that are suitable for investors with varying risk tolerance. These include:
- Aggressive Growth SRI
- Growth SRI
- Balanced SRI
- Income SRI
- Conservative SRI
Questwealth offers you transparency when it comes to the performance of its portfolios.
It publishes the performance of its ETF portfolios on its website. Here is the performance of its Aggressive Portfolio as of Nov 30, 2021. It’s performed exceptionally well in the last few years:
Questwealth Dividend Yield
Questwealth offers a dividend for each of its portfolios. As typical of most robo-advisors, it isn’t a huge dividend, but at least it’s something. For example, as of Nov 30, 2021, the Growth Portfolio offers a 2.11% dividend yield.
Questwealth Accounts Offered
Questwealth offers Canadians the following account types they can use with the platform:
- Tax-Free Savings Account (TFSA)
- Registered Retirement Savings Plan (RRSP) – personal and spousal
- Locked-in RRSP
- Locked-in Retirement Account (LIRA)
- Registered Education Savings Plan (RESP)
- Registered Retirement Income Fund (RRIF)
- Life Income Fund (LIF)
Most Popular Accounts
1. Questwealth TFSA
- Easy access to your capital
- Save for short- and long-term financial goals
- Tax-free growth of wealth
- Tax-free dividend and capital gain income
- Enjoy passive income and wealth-building without incurring taxes
2. Questwealth RRSP
- Save for long-term retirement goals
- Set up regular contributions
- Save more by starting early
- Leverage tax deductions on annual contributions
- Set yourself up for a comfortable life in retirement
3. Questwealth RESP
- Enjoy government grants
- Tax-deferred growth of capital
- Tax-sheltered environment for gains
- Withdraw with taxes on a lower tax bracket
- Boost your child’s chances for better education
Questwealth Customer Service
Questwealth Portfolios operates as a solely online robo-advisor service. It means you cannot go into their office if you want to talk to a financial expert or advisor from the company face-to-face.
The contact with Questwealth is limited to social media, chat, email, and telephone. I have contacted Questwealth a few times that I’ve been using their service to get more information about the ETF portfolios.
I don’t usually feel the need to call or email them. I contact Questwealth through chat and found that they are prompt and helpful. Getting on the phone with them is not hard either if customers want that human element.
Questwealth also has a useful self-help function that provides information on a wide array of topics. Questrade, its parent company, received the DALBAR Seal for Service Excellence.
It is a prestigious award that acknowledges leaders within the financial services department for excellent performance. Unfortunately, meeting the financial advisors is never a possibility with Questwealth like it is with traditional investment firms or banks, but you can call them for some basic help with things like portfolio selection.
Free Tax-Loss Harvesting
This is a feature available if you choose taxable accounts at Questwealth. Tax-loss harvesting essentially lowers your taxes on investment gains by using any losses in investments to offset them.
The portfolio managers at Questwealth use tax-loss harvesting to lower the capital gains tax in cash accounts – and they do it free of additional fees.
Once you have selected the portfolio and Questwealth invests your capital, you can simply “set it and forget it” without worrying about making changes manually.
The financial experts at Questwealth constantly monitor the mixture of assets in each portfolio. They make adjustments to the changing market conditions to maximize the profits and minimize the risks to your capital.
Is Questwealth Safe and Legit?
Questrade is a member of the Canadian Investor Protection Fund (CIPF). It means that your account with Questwealth Portfolios is adequately insured. In case Questwealth ever goes bankrupt, your capital is protected up to a value of $1 million.
Questrade also offers free private insurance of an additional $10 million. The company is also a member of the Investment Industry Regulatory Organization of Canada (IIROC). I think you can consider your investment safe with Questwealth Portfolios.
User Reviews for Questwealth
If you search Reddit for reviews from customers who have used Questwealth, there are plenty of happy customers out there.
I scoured through the internet to find reviews from customers who have been using Questwealth to see what they have to say so you can have an unbiased look at Questwealth.
Most people have good things to say about their experience of using Questwealth. However, I do share the concerns about an actively managed portfolio compared to a passively managed portfolio and the results it yields.
Questwealth vs. Wealthsimple
Wealthsimple is the most popular robo-advisor product in Canada. Wealthsimple enjoys its reputation due to an excellent combination of features, benefits, and low fees for clients. Questwealth also offers excellent features and benefits.
However, it offers substantially lower fees than Wealthsimple. In the Wealthsimple vs. Questwealth comparison, Wealthsimple beats Questwealth in terms of minimum balance. Questwealth has a minimum balance of $1,000, while there is no minimum balance limit with Wealthsimple.
Read my full comparison of Wealthsimple vs Questrade here.
Questwealth vs. Vanguard
Vanguard also entered the sector due to the rising popularity of robo-advisors. Vanguard is known for its pioneering presence in the world of low-cost index investing. Note that Vanguard does not offer a traditional robo-advisor product.
It offers a hybrid solution called Vanguard Personal Advisor. It uses a selection of portfolios that consist of Vanguard’s line of low-cost ETFs. A comparison with Questwealth is unfair since it is not technically a robo-advisor.
Vanguard is currently moving forward with an online-only robo-advisor called Digital Advisor. It will require a minimum balance of $3,000 and charge a 0.15% management fee.
Questwealth vs. Self-Directed
Self-directed investing is another alternative you can choose. If you think you have a knack for investing, have an understanding of how ETFs work, and understand how different funds can have varying risks, you can create your portfolio.
Questrade operates as an online brokerage that allows you to create your trading portfolio. The discount broker enables you to solve the problem of paying too much for investing, and it could be ideal for a DIY approach to investing.
You can learn more about Questrade in my Questrade Review.
If you are in search of a robo-advisor in Canada that charges you a lower fee and offers you transparency for the performance of its portfolios, I hope this Questwealth review has shed some light on what you should do.
I think Questwealth is a fantastic robo-advisor to help you achieve a variety of investment goals from aggressive growth to conservative investments. It also offers every account Canadians can ask for.
After doing this Questwealth review, it gets a big thumbs up from Wealth Awesome.
If you want to give them a try, you can get $10,000 managed free by Questwealth Portfolios here.