How do robo-advisors work?

Computer script. Programming code abstract screen of software developer. Digital abstract bits data stream, cyber pattern digital background. Selective focus effect. Blue green  color.

Simply put, robo-advisors use sophisticated algorithms to invest your money into a variety of exchange-traded funds (ETFs) based on your financial goals. ETFs, like mutual funds, are convenient packages of different financial assets.

When making their picks, robo-advisors will divide your money between equity investments (stocks) and fixed-income investments (bonds, for example) according to your risk tolerance. A portfolio focusing on equities will allow you to grow your wealth quicker, but you’ll face a greater risk of losing money.

Many robo-advisors in Canada will allow you to invest within a variety of different accounts, including Tax Free Savings Accounts (TFSAs), Registered Education Savings Plans (RESPs) and Registered Retirement Savings Plans (RRSPs), to name a few.

How to set up an account

Setting up an account with a robo-advisor is easy. Just answer a few questions to determine the risk level that’s right for you, then connect your bank account and choose how much you’d like to invest.

Your robo-advisor will make the picks for you, then automatically rebalance your portfolio over time based on changes in the market.

What are the advantages of using a robo-advisor?

Machines don’t have the same needs and wants as humans, so robo-advisors generally offer much lower fees than traditional fund managers. Plus, you probably won’t have to pay a commission on trades.

Annual fees for robo-advisors typically range between 0.02% and 1.0% of your assets under management, according to accounting giant Deloitte, while human advisors charge between 2% and 3% per year.

Some robo-advisors will allow you to open an account with no minimum balance, so you can start investing with as little as $1.

And even though your assets are being managed by an algorithm, many robo-advisor services also offer support from human advisers if you have questions or concerns about your investments.

Will my money be secure?

Yes. Using a robo-advisor is just as secure as hiring a human being to manage your investments.

In Canada, robo-advisors often register as portfolio managers, which means they’re bound by fiduciary standards and required by law to put their clients’ interests first. Plus, a number of robo-advisors are required to disclose investing risks to their clients as members of the Investment Industry Regulatory Organization of Canada.

Many are also members of the Canadian Investor Protection Fund, which will safeguard up to $1 million of your money if your robo-advisor happens to go bankrupt.

How do I choose the right Canadian robo-advisor?

Before comparing your options, you’ll need to ask yourself a few questions:

  • How much are you willing to invest upfront?
  • How much are you willing to pay in fees?
  • Are you interested in socially responsible investments (SRI) that focus on ethical companies and funds that make a positive impact?
  • Are you fine investing through a multipurpose account like a TFSA, or do you want something more specialized like an RRSP or RESP?

Knowing which of the following strengths and weaknesses matter to you will make your choice much easier. Let’s get started:



Wealthsimple is Canada’s best-known robo-advisor, managing more than $5 billion in assets for more than 175,000 clients.

The service is helmed by an experienced team and has the backing of Power Corp., one of the largest financial firms in Canada, which owns close to 90% of the company. Wealthsimple also has a presence in Europe and the United States.

The platform is intuitive and easy to use, and there’s no minimum investment required to open an account. Whenever there’s a change in the market, Wealthsimple’s algorithm will automatically rebalance your portfolio.

Portfolio options

Wealthsimple offers three ETF portfolios, based on risk tolerance:

  • Growth — 75% to 90% equity, 10% to 25% fixed income
  • Balanced — 50% to 65% equity, 35% to 50% fixed income
  • Conservative — 30% to 40% equity, 60% to 70% fixed income

You can also personalize your portfolio with niche options like SRI and halal investing.

Wealthsimple’s account options include RRSPs and registered retirement income funds (RRIFs), TFSAs, RESPs, locked-in retirement accounts (LIRAs), personal accounts, joint accounts and business accounts.

Minimum account size


Fee structure

  • 0.5% for the first $99,999
  • 0.4% for $100,000 to $500,000
  • 0.4% for anything above $500,000, with access to special perks and discounts

As with other robo-advisors, your investments through Wealthsimple are also subject to a Management Expense Ratio (MER) — a fee charged by the fund companies within your portfolio.

With Wealthsimple, the MER will not be deducted from your account but will instead appear as an adjustment to the prices of your ETFs. The company says you should expect these MERs to cost about 0.2% of your portfolio annually.


  • Plenty of industry experience, with human advisers available to help.
  • Diverse investing options, including niche accounts based on your personal values.
  • No minimum account size.
  • Reasonable fees for new investors.


  • Fees are slightly higher than others for large investments.
  • Fewer portfolio choices.

Questwealth Portfolios


This is the robo-advisor offered by Questrade Wealth Management, the largest independent brokerage firm in Canada. It’s basically a hybrid of robo and human adviser, with humans stepping in to manage your portfolio when the market fluctuates.

Questwealth users also get access to Questrade’s discount brokerage services, which means that in addition to the automated management of their assets, experienced investors still have the option to pick individual stocks.

Portfolio options

Questwealth offers five ETF portfolios based on risk-tolerance:

  • Aggressive — 98% equity, 2% fixed income
  • Growth — 80% equity, 20% fixed income
  • Balanced — 60% equity, 40% fixed income
  • Income — 40% equity, 60% fixed income
  • Conservative — 20% equity, 80% fixed income

You can also personalize your portfolio with socially responsible investing.

Questwealth’s account options include TFSAs, RRSPs, Spousal RRSPs, RESPs, Family RESPs, LIRAs and cash accounts.

Minimum account size


Fee structure

  • 0.25% up to $99,999
  • 0.20% for anything above $100,000

Additionally, Questwealth portfolios are subject to an MER of 0.11% to 0.23% — rising to between 0.21% and 0.35% for SRI investments.


  • Competitive fees.
  • Wide selection of investment accounts, including socially responsible options.
  • Provides options for more experienced investors.
  • Humans get involved, if that’s something you like.


  • $1,000 minimum account size.
  • Humans get involved, if that’s something you dislike.

CI Direct Investing

CI Direct Investing
CI Direct Investing

CI Direct Investing has been impressing Canadians since 2014, when it was known as Wealthbar. It offers low-fee portfolios and provides unlimited access to financial advice from human advisers.

Users’ investment opportunities expanded greatly in 2019 when the company became a wholly owned subsidiary of CI Financial Corp. By the end of 2020, the company managed more than $500 million in assets across Canada.

CI Direct Investing operates on a hybrid active-passive model; its funds are constructed by human portfolio managers but are still based on ETFs managed by algorithms.

Unlike many other robo-advisors, all of CI Direct Investing’s ETF portfolios include real estate, which could provide broader diversification for its customers.

Portfolio options

CI Direct Investing offers five ETF portfolios based on risk tolerance:

  • Aggressive — 64.5% equity, 25.5% fixed income, 10% real estate
  • Growth — 55.5% equity, 37% fixed income, 7.5% real estate
  • Balanced — 47% equity, 46% fixed income, 7.5% real estate
  • Conservative — 33% equity, 62% fixed income, 5% real estate
  • Safety — 20% equity, 75% fixed income, 5% real estate

CI Direct Investing also has a socially responsible investing option available called Cleantech.

In addition to its ETF portfolios, CI Direct Investing offers four “private investment portfolios.” CI Direct Investing says you’ll gain access to unconventional investments not normally available to people without $1 million to spend. That privacy, it says, means your investments won’t lose value from speculation and bad headlines.

Minimum account size


Fee structure

  • 0.60% per year up to $150,000
  • 0.40% per year for $150,000 to $500,000
  • 0.35% per year for anything above $500,000

Additionally, CI Direct Investing's normal portfolios are subject to an MER of 0.16% to 0.26%.


  • Wide variety of investment options, including private investment portfolios.
  • Every client gets access to financial planning tools.
  • Custom portfolios available through Cleantech.


  • Higher fees than some competitors for smaller investments.
  • $1,000 minimum account size.

BMO SmartFolio


This robo option comes from Bank of Montreal (BMO), Canada’s oldest financial institution. Although SmartFolio is open to anyone, the majority of its clients are existing BMO customers.

It’s another hybrid, as SmartFolio uses real-life fund managers from BMO’s experienced investing team to design its ETF offerings. BMO’s advisers will also personally rebalance your portfolio around four times a year and are always available to answer your questions through live chat, email or by phone.

Portfolio options

BMO SmartFolio offers five ETF portfolios based on risk tolerance:

  • Equity Growth — 90% equity, 10% fixed income
  • Long Term Growth — 70% equity, 30% fixed income
  • Balanced — 50% equity, 50% fixed income
  • Income — 30% equity, 70% fixed income
  • Capital Preservation — 10% equity, 90% fixed income

SmartFolio’s accounts include TFSAs, RRSPs, RESPs, RRIFs and joint accounts as well as non-registered accounts that have no contribution limits and provide easy access to funds.

Minimum account size


Fee structure

  • 0.7% for your first $100,000
  • 0.6% for your next $150,000
  • 0.5% for your next $250,000
  • 0.4% for anything above $500,000

Additionally, SmartFolio portfolios are subject to an MER of 0.20% to 0.35%.


  • Backed by one of Canada’s most respected financial institutions.
  • Comes with an experienced team of advisers and portfolio managers.


  • High fees.
  • $1,000 minimum account size.
  • MERs for its chosen investments are higher than some competitors.
  • No SRI options.

RBC InvestEase


The robo-advisor from the Royal Bank of Canada is the newest on this list, having rolled out nationwide in 2018.

Last year InvestEase got a major update when RBC teamed up with BlackRock Asset Management Canada Limited to create RBC iShares, which manages the most ETFs in Canada at 150.

The InvestEase platform is easy to use and provides access to human portfolio advisers who can provide assistance when needed.

Portfolio options

RBC InvestEase offers both standard and socially responsible ETF portfolios, each with five different options based on risk tolerance:

  • Aggressive Growth — 100% equity
  • Growth — 70% equity, 30% fixed income
  • Balanced — 55% equity, 45% fixed income
  • Conservative — 35% equity, 65% fixed income
  • Very Conservative — 20% equity, 80% fixed income

RBC InvestEase’s accounts include TFSAs, RRSPs and non-registered accounts.

Minimum account size

None, although investments start at $100.

Fee structure

  • 0.5% flat fee for both standard and responsible investing portfolios

Additionally, InvestEase’s ETFs come with MERs between 0.18% and 0.30%.


  • Low fees and MERs.
  • Backing from Canada’s largest bank.
  • Wide selection of ETF portfolios to choose from.
  • Access to human advisers.


  • No discounts for larger investments.
  • Limited account options (no RESPs or LIRAs).

Which is the best robo-advisor in Canada for beginners?

Artificial intelligence (AI) advisor or robo-advisor in stock financial market technology. Shaking hands of male investor and 3d rendering robot. Abstract graph stock exchange background.
Zapp2Photo / Shutterstock

Keep in mind that the options above are only a sample of what’s available, so you may want to investigate other robo-advisors to see whether any suit your needs better. Just be sure to keep an eye out for hidden fees and read reviews to identify any red flags.

That said, based on our comparison of popular options, most new investors will find Wealthsimple the best robo-advisor in Canada.

It charges low fees for smaller investments and doesn’t require a minimum balance, making it the ideal option when you’re starting out. You can toss a couple bucks in and see how the system works without committing an entire paycheque at once.

The fee structure will also appeal to more experienced investors who want to hedge their bets by entrusting a bit of their money to a robo-advisor. Plus, Wealthsimple provides more niche account options than its competitors, so you can feel confident that your investments are in line with your personal beliefs.

MoneyWise readers can take advantage of a special offer and get a $50 bonus when you open and fund your first . With the barrier to entry so low, there’s no reason not to try “investing on autopilot.”

Grow your money

Get started, whether you're investing, planning for retirement, or anything in between

Qualify Now

About the Author

Shane Murphy

Shane Murphy


Shane is a reporter for MoneyWise. He holds a bachelor’s degree in English Language & Literature from Western University and is a graduate of the Algonquin College Scriptwriting program.

You May Also Like

Canadian Homeowners: There’s Still Time to Save Big By Refinancing Your Mortgage

With mortgage rates near record-lows, you can save lots of money on your home loan.

So You’ve Joined the Gig Economy; What Are You Doing About Life Insurance?

Only a small fraction of gig workers have access to life insurance through work.

Inflation Busters: 8 Ways to Stretch Your Money and Fight Soaring Prices

Battle the rising cost of living with these strategies to save and make more money.

4 Affordable Canadian Housing Markets for Investors in 2022

You can still find winning properties, at least outside Ontario and B.C.