WealthBar Review 2024: Canada’s 1st Robo-Advisor

Note that Wealthbar is no longer operational and is now CI Direct Investing – read the full CI review here.

When it comes to creating a low-cost portfolio that you don’t need to manage yourself, robo-advisors could present you with the perfect way to go about it.

There is an increasing number of robo-advisors making their way into the world of online portfolio management. 

Let’s go over this Wealthbar review to cover the first full-service robo-advisor that began the trend in Canada – WealthBar. A pioneer in the field of fin-tech for Canada, WealthBar effectively introduced Canada to the world of robo-advisors.

What is WealthBar?

WealthBar is among the most prominent online portfolio management advisors in Canada. It is a hybrid robo-advisor that brings together the best of human wealth management experts and the reliability of investment algorithms in a single package.

WealthBar financial services provide investors with financial advice and customized low-cost ETF portfolios that match their investment goals. The ETFs provided by this robo-advisor require no maintenance from the investors themselves.

WealthBar was the brainchild of two seasoned professionals from the finance and technology industry, Tea and Chris Nicola. It offers you most of the standard robo-advisor features you can expect and some benefits unique to WealthBar that add more value to its service.

Tea Nicola is the CEO of Nicola Wealth Management, a company that provides wealth management services primarily to affluent investors via private investment pools.

WealthBar has more than $275 million in assets under management and a larger team. The WealthBar team consists of several financial experts with a variety of designations, including CFP, CIM, CFA, and more.

WealthBar Investment Options

If you choose WealthBar, it is likely that you will invest in the ETF portfolios that the platform provides you. Besides the ETF portfolios, you might invest in its Private Investment Portfolios.

ETF Portfolios

WealthBar gives you the option of five different risk levels with their ETF portfolios. It offers you plenty of diversity in terms of your preference. The options present something suitable for a range of investors – both who are not afraid of taking risks, and investors who are conservative with their capital  – and everything in between.

ETF Safety Portfolio

This is the safest type of ETF portfolio WealthBar offers its users. The Safety portfolio makes sure your capital has exposure to the least possible risk. In the past five years, the portfolio’s average return has been 3.05%, with a volatility rate of 3.25%.

Here is a look at what the portfolio’s asset allocation looks like.

Asset Class	Breakdown
Corporate Bonds	27.0%
Government Bonds	42.0%
Income Strategies	10.0%
US Equities	6.0%
Canadian Equities	5.0%
International Equities	5.0%
Real Estate	5.0%

The Safety portfolio is invested in the following ETFs:

Fund	Ticker	Breakdown
Vanguard Canadian Short-term Bond ETF	VSB	60.0%
Horizons Laddered Canadian Preferred Share ETF	HLPR	10.0%
Horizons S&P 500 ETF	HXS	6.0%
iShares Core MSCI EAFE IMI ETF	XEF	5.0%
Horizons S&P/TSX 60 ETF	HXT	5.0%
BMO Mid-Term US IG Corporate Bond Hedged to CAD ETF	ZMU	9.0%

ETF Conservative Portfolio

For investors inclined towards reducing risk but they still want to see more significant returns, the Conservative portfolio might offer a better option. In the past five years, this portfolio has seen a return of 4.48% with a volatility rate of 4.69%.

Here is a look at the portfolio allocation mix for the conservative portfolio:

Asset Class	Breakdown
Corporate Bonds	23.0%
US Equities	16.5%
Government Bonds	28.0%
High-Yield Bonds	5.0%
Income Strategies	10.0%
International Equities	7.5%
Real Estate	5.0%
Canadian Equities	5.0%

The Conservative portfolio is invested in the following ETFs:

Fund	Ticker	Breakdown
Horizons S&P 500 ETF	HXS	16.5%
Vanguard Canadian Short-Term Bond ETF	VSB	40.0%
BMO High Yield US Corporate Bond Hedged to CAD ETF	ZHY	5.0%
Horizons Laddered Canadian Preferred Share ETF	HLPR	10.0%
iShares Core MSCI EAFE IMI ETF	XEF	7.5%
BMO Mid-Term US IG Corp Bond Hedged to CAD ETF	ZMU	11.0%
Horizons S&P/TSX 60 ETF	HXT	5.0%
Horizons Equal-Weight Canada REIT ETF	HCRE	5.0%

ETF Balanced Portfolio

The Balanced portfolio offers investors a middle ground. It does not expose your capital to significant risk, and it does not keep it too conservative. The portfolio is likelier to give you more ups and downs but offers a better long-term overall return. This portfolio has provided a 6.06% return over the past five years, with a volatility rate of 5.97%.

Here is what the portfolio allocation looks like for the Balanced portfolio:

Asset Class	Breakdown
Corporate Bonds	27.0%
Government Bonds	42.0%
Income Strategies	10.0%
US Equities	6.0%
Canadian Equities	5.0%
International Equities	5.0%
Real Estate	5.0%

The Balanced portfolio is invested in the following ETFs:

Fund	Ticker	Breakdown
Horizons S&P 500 ETF	HXS	24.0%
Vanguard Canadian Short-Term Corporate Bond ETF	VSC	17.5%
BMO High Yield US Corporate Bond Hedged to CAD ETF	ZHY	10.0%
iShares Core MSCI EAFE IMI ETF	XEF	12.5%
Horizons S&P/TSX 60 ETF	HXT	7.5%
Horizons Equal Weight Canada REIT ETF	HCRE	7.5%
BMO Mid-Term US IG Corporate Bond Hedged to CAD Index ETF	ZMU	8.5%
Vanguard Canadian Short-Term Bond ETF	VSB	5.0%

ETF Growth Portfolio

With the ETF Growth portfolio, WealthBar begins to get into more volatile investments, but it still manages to keep a handle on the risk to your investment. It is an ideal option for investors who plan on investing for a long time, and they can bear some losses but wait for the market to recover any losses. The Growth portfolio has shown a return of 6.93% over the past five years, with a 6.78% volatility rate.

Here is what the portfolio allocation looks like for the Growth portfolio:

Asset Class	Breakdown
US Equities	30.0%
Corporate Bonds	22.5%
International Equities	15.0%
High-Yield Bonds	10.0%
Canadian Equities	7.5%
Real Estate	7.5%
Income Strategies	7.5%

The Growth portfolio is invested in the following ETFs:

Fund	Ticker	Breakdown
Horizons S&P 500 ETF	HXS	30.0%
iShares Core MSCI EAFE IMI ETF	XEF	15.0%
BMO High Yield US Corporate Bond Hedged to CAD ETF	ZHY	10.0%
Vanguard Canadian Short-Term Bond ETF	VSC	12.5%
Horizons S&P/TSX 60 ETF	HXT	7.5%
Horizons Equal Weight Canada REIT ETF	HCRE	7.5%
Horizons Laddered Canadian Preferred Share ETF	HLPR	7.5%
BMO Mid-Term US IG Corporate Hedged to CAD Index	ZMU	10.0%

ETF Aggressive Portfolio

The most risk-inclined portfolio is the Aggressive portfolio. It maximizes your return but puts you at a higher exposure to short-term risk. It has seen a return of 8.00% over the past five years, with a 7.52% volatility rate.

Here is what the portfolio allocation looks like for the Aggressive portfolio:

Asset Class	Breakdown
US Equities	35.0%
International Equities	17.5%
High-Yield Bonds	12.5%
Canadian Equities	10.0%
Real Estate	10.0%
Corporate Bonds	10.0%
Income Strategies	5.0%

The Aggressive portfolio is invested in the following ETFs:

Fund	Ticker	Breakdown
Horizons S&P 500 ETF	HXS	35.0%
iShares Core MSCI EAFE IMI ETF	XEF	17.5%
BMO High Yield US Corporate Bond Hedged to CAD ETF	ZHY	12.5%
Horizons Equal Weight Canada REIT ETF	HCRE	10.0%
Horizons S&P/TSX 60 ETF	HXT	10.0%
BMO Mid-Term US IG Corporate Hedged to CAD Index	ZMU	5.0%
Vanguard Canadian Short-Term Corporate Bond ETF	VSC	5.0%
Horizons Laddered Canadian Preferred Share ETF	HLPR	5.0%

Private Investment Portfolios

WealthBar’s Private Investment Portfolios (PIPs) is what really sets this hybrid robo-advisor apart from the rest of its peers. WealthBar’s connection to Nicola Wealth lets the robo-advisor give you access to investments that were supposedly reserved only for the wealthiest investors.

The addition of PIPs helps you create a more diverse investment portfolio with your capital through WealthBar. The inclusion of PIPs offers investors the chance to weather any market downturns since most of it is in private investments. There are three different Private Portfolios you can choose:

Safety Private Portfolio

The Safety private portfolio offers you the least risk to your investment. It has the lowest volatility rate, and yet it retains a decent return. For the past five years, this private portfolio has earned a 5.05% return with a 2.00% volatility rate.

Here is the breakdown of the Safety private portfolio through WealthBar:

Asset Class	Breakdown
Income Strategies	27.0%
Government Bonds	18.0%
Real Estate	15.0%
International Equities	10.0%
Corporate Bonds	8.0%
Fixed Income	6.0%
Canadian Equities	6.0%
Alternative Strategies	5.0%
Private Equity	3.0%
Private Debt	2.0%
High-Yield Bonds	2.0%

The Safety private portfolio invests your funds in the following ETFs and pooled funds:

Fund	Ticker	Breakdown
Nicola Core Portfolio Fund	NWM254	50.0%
Nicola Primary Mortgage Fund	NWM154	25.0%
Vanguard Canadian Short-Term Bonds ETF	VSB	25.0%

Balanced Private Portfolio

For investors seeking a more balanced approach, the Balanced private portfolio can offer a more substantial return with better volatility. It showed returns of 7.14% in the last five years, with a 3.51% volatility rate.

Here is the breakdown of the Balanced private portfolio through WealthBar:

Asset Class	Breakdown
Real Estate	30.0%
International Equities	20.0%
Canadian Equities	12.0%
Fixed Income	12.0%
Alternative Strategies	9.0%
Private Equity	5.0%
Private Debt	4.0%
Income Strategies	4.0%
High-Yield Bonds	4.0%

The Balanced private portfolio invests your funds in the following:

Fund	Ticker	Breakdown
Nicola Core Portfolio Fund	NWM254	100.0%

Aggressive Private Portfolio

The Aggressive private portfolio is for investors who want the same growth rate as the Aggressive ETF portfolio but with half the volatility. It has experienced a rate of 7.96% returns in the past five years, with a 4.71% volatility.

Here is the breakdown of the Aggressive private portfolio through WealthBar:

Asset Class	Breakdown
Real Estate	40.0%
Income Strategies	27.0%
International Equities	10.0%
Fixed Income	6.0%
Canadian Equities	6.0%
Alternative Strategies	5.0%
Private Equity	3.0%
Private Debt	2.0%
High-Yield Bonds	2.0%

The Aggressive private portfolio invests your funds in the following:

Fund	Ticker	Breakdown
Nicola Core Portfolio Fund	NWM254	50.0%
Nicola Global Real Estate Fund	NWM144	25.0%
Nicola US Tactical High-Income Fund	NWM234	25.0%

WealthBar Performance

If you want to consider WealthBar, it is always a good idea to find information about the performance of its portfolios. WealthBar has a section on their website that shows the performance of a hypothetical $100,000 invested WealthBar AUMs in the five ETF portfolios they offer.

The performance records the hypothetical amount invested since 2014. Below is a screenshot of the performance of WealthBar’s Aggressive ETF portfolio from the section that shows the cumulative performance of one of their portfolios, including WealthBar returns, asset allocation, and the assets your investment is allocated in.

Besides looking at the portfolio’s allocation of assets by asset class and fund, you can also view the average MER of ETFs that each portfolio consists of.

Here is a look at what a $100,000 Balanced ETF Portfolio would look like from 2014 to March 2020:

One thing I must point out is that historical performance does not always guarantee similar future returns. It only gives you an idea of the trend you can expect.

WealthBar Fees

WealthBar offers its clients a multi-tiered pricing structure for the services it provides. We are going to take a look at some hypothetical scenarios to help you determine the fees you can expect to pay for WealthBar’s services.

To give you a better perspective on how much it saves you as opposed to a traditional mutual fund, I’ve included the fees based on the average mutual fund fee of 2.20%.

Scenario 1: You’ve invested $20,000 for a modest portfolio. Here’s what your annual fee will look like:

• WealthBar: $120 per year
• Traditional Bank Mutual Fund: $440 per year

Scenario 2: You’ve invested $100,000 for a modest portfolio. Here’s what your annual fee will look like:

• WealthBar: $600 per year
• Traditional Bank Mutual Fund: $2,200 per year

Scenario 3: You’ve invested $500,000 for a modest portfolio. Here’s what your annual fee will look like:

• WealthBar: $2,300 per year
• Traditional Bank Mutual Fund: $11,000 per year

As you can see, resorting to WealthBar instead of a traditional bank mutual fund product can save you thousands of dollars over a lifetime.

WealthBar Features

WealthBar offers you a wealth of features that can make it an attractive option for you to consider. Here are some of the most prominent features of WealthBar I think you should know about:

1. Customized Financial Advice:

When you open an account at WealthBar, the platform assigns you a dedicated financial advisor. The professional will be available to answer any questions you may have regarding investments and the platform itself.

2. Diversified Portfolio:

The platform creates a customized portfolio keeping your preference for returns and risk in mind. It is aptly diversified to suit your preferences for a tailor-made investment experience.

3. Financial Planning

There is a financial planning tool on the dashboard of WealthBar. It allows you to create financial plans based on your long-term financial or retirement goals. The tool is versatile, and it can give you a comparison of your current financial situation against the goals you have set.

For instance, it will show you how much you will need to invest in your Registered Retirement Savings Plan, how long your savings might last during retirement, and other similar information.

A licensed financial planner comes as part of the package. The professional will be available to go through the financial plan with you in case you need help getting clarity on anything.

4. Simple Fee Structure

The fee structure for investment services like this can be complicated, especially when you have a wide array of embedded fees or commissions that are not apparent upfront. At WealthBar, the pricing is straightforward. There are no commissions earned on ETFs, and there is no fee for trading.

5. Auto Rebalancing

If your portfolio deviates for more than 5% from the target allocation, WealthBar automatically rebalances your portfolio.

6. Socially Responsible Investing

Socially responsible investment is a prominent feature. It allows you the chance to invest in a way that aligns with your beliefs and is beneficial for the environment. The Cleantech portfolio, in particular, offers the option to invest with environmental benefits in mind.

7. Free Investment Management

If you’re just beginning your path to becoming an investor, or you have a modest sum to invest, WealthBar typically offers to manage your first $5,000 of funds free of cost.

8. Security

Security is a significant concern with any online investment platform. WealthBar offers you protection for your funds. Your invested capital is held by an independent custodian NBIN, BBS, and Credential Securities. These custodians are members of the IIROC and CIPF.

In the event that the custodians lose all your money or go bankrupt for any reason, your funds are insured up to $1 million per account category.

What Investment Accounts Can You Use With WealthBar?

WealthBar offers Canadian citizens access to use several types of investment accounts, including:

• Registered Retirement Savings Plan – Individual, Spousal, and Group (RRSP)
• Registered Education Savings Plan (RESP)
• WealthBar Tax-Free Savings Account (WealthBar TFSA)
• Registered Retirement Income Fund (RRIF)
• Locked-In Retirement Account (LIRA)
• Life Income Fund (LIF)
• Registered Disability Savings Plan (RDSP)
• Non-registered investment account – Joint and Individual
• Corporate or business investment accounts

WealthBar Login and Register

Signing up on WealthBar and registering yourself is a simple process that takes anywhere from 15 – 20 minutes.

Step 1: Go to https://www.wealthbar.com/.

Step 2: Click on the Sign Up option.

Step 3: After you fill in the details, select the type of account you want to open with WealthBar (TFSA, RRSP, RESP, etc.). Answer the questions they will use to determine your tolerance for risk, goals with investment, and to provide you a recommendation for the portfolio they determine would work best for your purposes. You will also need to enter some basic personal information to complete the process.

Step 4: Add the funds you want to invest in the account with WealthBar. It will allow the portfolio manager the chance to invest it on your behalf to help you build your wealth.

If you are making the switch to WealthBar from your funds invested in another institution, WealthBar offers to refund any transfer fees you might have to pay for up to $150. They offer you this facility if your funds are more than $25,000. The minimum funds you can invest is $1,000.

If you plan on signing up, here is some information you should have on hand before you begin the process to speed things up:

• Your social insurance number
• Bank account information
• Employment details
• Investment and debt balances

WealthBar vs. Wealthsimple

I think it is a good idea to do a short WealthBar vs. Wealthsimple comparison for you. Wealthsimple is another product you can consider. It is similar to WealthBar in many ways, but they are two entirely different products.

Wealthsimple is an online investment manager. It combines the use of expert financial advice with smart technology. It lets you put your money in a managed portfolio, or allow you to trade yourself.

You can also put your money in a high-interest savings product offered by Wealthsimple. It has been around since 2014 and has more than $5 billion in assets under management.

Wealthsimple and Wealthbar both offer key similarities. Both online portfolio management services offer a variety of accounts and provide you access to financial advisors for the human touch. Both offer automated rebalancing of your investments to keep them on track if they deviate more than 5%.

Wealthsimple does not require a minimum account balance to begin trading. You can begin with as little as $1 in your account. WealthBar requires a balance of at least $1,000 in the account to begin trading.

Wealthsimple charges you a 0.5% management fee that drops down to 0.4% if you invest more than $100,000. WealthBar charges 0.6% as a management fee if you invest up to $150,000. It drops it down to 0.4% on the next $350,000, and to 0.35% on any amount above $500,000.

WealthBar and Wealthsimple are similar services in many ways. The most significant difference is that WealthBar requires a minimum of $1,000 to begin investing, while Wealthsimple can offer you the chance to trade with as little as $1.

Wealthsimple’s fee structure is more attractive for investments below $100,000. WealthBar, however, offers more attractive fees for investors beyond the $325,000 mark. Wealthsimple offers a financial planning session to its clients once they invest $100,000. WealthBar offers investors the chance to capitalize on ongoing access to its financial planners, including a free introductory review of their finances.

You Should Use WealthBar If:

• You want a low-cost wealth management product
• You want to work with a leading robo-advisor
• You want access to private investment pools
• You want Unlimited financial advice

Don’t Use WealthBar If:

• You don’t have the minimum $1,000 balance
• You want to manage your assets yourself
• You want more control over the assets to invest in

Conclusion

It is a positive sign that there are increasing fintech choices for Canadian investors. WealthBar effectively pioneered the field and retains a certain position that sets it apart from its peers.

If you are a more seasoned investor with money tied up in investments elsewhere, switching to WealthBar might be a refreshing change for you.

It offers you a free transfer from other institutions and lower fees in the higher investment ranges. For new investors, WealthBar might not be the best place to start. It has a high $1,000 minimum to begin using the platform. The premium amount may be worth it for some newcomers to the investment world for the customer service and financial advice WealthBar offers.

It certainly offers you more advantages compared to traditional banking mutual fund products. It all becomes a matter of preference.

Do let me know what your experience is like if you work with WealthBar. I’d be happy to learn about it!