Robo-advisors are the leading alternatives to mutual funds and traditional investment managers partly due to their automation process that reduces human errors.
With minimum human intervention, robo-advisors tend to be less expensive than other investment platforms.
If you’ve less investment experience or don’t have the time to invest yourself, you can set it and forget it through a robo-advisor.
Justwealth and Wealthsimple Invest are award-winning robo-advisors in Canada that distinguished themselves from their peers on various grounds.
Even though Justwealth and Wealthsimple are among the best robo-advisors in Canada, one of them would be more suitable for your needs. Which could that be?
Join me in this Justwealth vs Wealthsimple Invest comparison to expose the key differences and similarities between the two robo-advisors. You will also learn about the major factors to consider when narrowing your selection.
Table of Contents
Overview of Justwealth
Justwealth Financial operating as Justwealth is an automated Portfolio Manager that was founded in 2015.
The robo-advisor seeks to provide smart, cost-effective and honest wealth management solutions to individuals and institutions in Canada.
Justwealth offers a wide range of unique portfolios that are investable with CAD and USD accounts. Available investment accounts on the robo-advisor range from registered and non-registered accounts.
Due to the unique features of its RESP account, Justwealth is regarded by many as the overall best RESP robo-advisor in Canada.
CI Investment Services Inc. (formerly BBS Securities Inc.) serves as the custodian of Justwealth.
As such, your assets in Justwealth are covered up to $1 million per insured account by the Canadian Investor Protection Fund (CIPF).
Pros and Cons of Justwealth
Below are the key pros and cons of Justwealth Financial you should be aware of:
- Multiple portfolios and accounts: If you’re looking for a full-fledged robo-advisor with multiple portfolios and investment accounts, Justwealth could be what you need.
- Dedicated RESP: Registered Education Savings Plan (RESP) accounts on Justwealth have special features compared to other registered accounts on the platform. With this treatment, Justwealth is seen by many as the ideal robo-advisor for RESP investing in Canada.
- USD account: Unlike other robo-advisors (including Wealthsimple Invest), Justwealth offers a USD account which automatically eliminates FX fees on your US investments.
- Tax-loss harvesting: With the tax-loss harvesting feature, you can reduce the capital gain taxes on your non-registered account. This feature is available on Justwealth.
- Personal Portfolio Manager: Each client on Justwealth is assigned a Personal Portfolio Manager who will plan, build and manage their portfolio among other things.
- Switch fee coverage: If you move your existing investment up to $25,000 to Justwealth, you may be reimbursed the $150 transfer fee.
- High minimum investment requirement: All non-RESP accounts on Justwealth require a $5,000 minimum investment balance. This is not the case at other robo-advisors that require lower or zero minimum investment requirements.
- High management fees and MER: Justwealth management fees and MERs are among the highest in Canada. Although this is common with other actively managed robo-advisors.
- Active investment strategy: This explains why the robo-advisor is relatively more costly than other robo-advisors in Canada. The active strategy may also undermine the purpose of automated investing.
- Limited availability: At the moment, residents of Northwest Territories, Nunavut and Yukon can’t access Justwealth.
Overview of Wealthsimple Invest
Wealthsimple Invest is the automated investment platform of Wealthsimple. The robo-advisor uses a passive investment strategy to provide Canadians with a seamless autopilot investing experience.
Virtually everything on Wealthsimple Invest is automated — deposit, rebalancing, dividend reinvesting and so on.
Despite using a passive investing strategy, Wealthsimple Invest still has expert financial advisors that are ready to provide you with customized solutions.
Available portfolios on Wealthsimple Invest range from classic ETFs, and socially responsible investing (SRI) to halal portfolios. You can also invest through registered and non-registered accounts on the robo-advisor.
With no investment required, there are many reasons why Wealthsimple Invest is considered among the best robo-advisors in Canada.
Pros and Cons of Wealthsimple Invest
Below are the major pros and cons of Wealthsimple Invest you need to know:
- No minimum investment requirement: You can start investing with as little as $1 on the robo-advisor as there’s no minimum investment required.
- Autopilot investing: The entire investing process is automated on Wealthsimple Invest, making things stress-free for you.
- Tax-loss harvesting: Taxes usually apply on capital gains on non-registered accounts. Wealthsimple Invest helps reduce the tax rate through tax-loss harvesting.
- Passive strategy: Wealthsimple Invest passive investing strategy reduces human intervention in your investment.
- Human touch: You can give your Wealthsimple Invest portfolio a human touch by tapping on the experience of Wealthsimple expert financial advisors.
- Switch fee coverage: If you move your existing investment up to $5,000 to Wealthsimple Invest, the $150 transfer fee will be reimbursed to you.
- Wide availability: Wealthsimple Invest is available in all parts of Canada including Québec and Canadian territories.
- High fees: Despite using a passive investing approach, Wealthsimple Invest has a higher management fee than other actively managed robo-advisors.
Justwealth vs Wealthsimple Invest: The Key Differences
|Canadian Growth, Global Growth, USD, Income, Education Target Date & ESG
|ETFs, SRI and Halal
|Taxable, TFSA, RRSP, RRIF, LIRA, LIF and RESP accounts
|Taxable (personal, joint and business) TFSA, RRSP, RRIF, LIRA and RESP accounts
|0.4% or 0.5%
|0.4% or 0.5%
|0.13% – 0.16%
|$5,000 for non-RESP accounts
|10 provinces of Canada
By now you must have noticed some of the similarities between Justwealth and Wealthsimple. Both robo-advisors have tax-loss harvesting and assets with them are covered by the CIPF up to $1 million per insured category.
In addition, Justwealth and Wealthsimple don’t charge inactivity fees and their management fees range between 0.4% to 0.5%.
Both robo-advisors also waive the $150 transfer fee when you move your investment to any of them.
Beyond these limited similarities, the two robo-advisors differ considerably.
In what follows, we shall be looking at the key differences between Justwealth and Wealthsimple Invest.
Justwealth vs Wealthsimple Invest: Investing Strategy
Justwealth uses an active investing approach while Wealthsimple Invest uses a passive approach.
What this means is that Justwealth portfolios are adjusted frequently as per fluctuations in the markets.
On the other hand, Wealthsimple Invest seeks to track the returns of underlying holdings while being adjusted only when a portfolio allocation exceeds 30% of its benchmark.
Instead of this difference yielding a varying management fee among the two robo-advisors, it turns out that both Justwealth and Wealthsimple Invest charge 0.4% to 0.5% management fee.
The common knowledge is that actively managed portfolios are justifiably more expensive than passively managed portfolios due to their high level of human intervention.
In this case, your selection of passive vs active robo-advisor can’t be influenced by management fees as the two robo-advisors have the same schedule.
Justwealth vs Wealthsimple Invest: Portfolios
The two robo-advisors have pre-built portfolios according to different investment objectives. You only need to explain your situation and you will be matched with one of the pre-designed portfolios.
With Justwealth, available portfolios range from Canadian Growth, Global Growth, USD, Income, Education Target Date & ESG. These portfolios are further sub-categorized into the following risk-weighted portfolio classes:
- Conservative portfolio
- Growth portfolio
- Balanced portfolio
- Moderate portfolio
- High portfolio
- Advanced portfolio
- Maximum portfolio
On the other hand, Wealthsimple Invest has three portfolio categories namely classic ETF portfolios, SRI portfolios and Halal portfolios. These portfolios also have underlying risk-weighted portfolios as follows:
- Conservative portfolio
- Balanced portfolio
- Growth portfolio
Justwealth vs Wealthsimple Invest: Investment Accounts
Both Justwealth and Wealthsimple have personal and business accounts you can invest through. The accounts are categorized into registered accounts and non-registered accounts.
The robo-advisors have somewhat similar account types as they both allow you to invest through taxable, TFSA, RRSP, RRIF, LIRA, LIF and RESP accounts.
In addition, both robo-advisors help reduce your capital gains taxes through tax-loss harvesting.
Bear in mind that you can only invest with CAD on Wealthsimple Invest. However, Justwealth allows you to invest with either CAD or USD.
Justwealth vs Wealthsimple Invest: Minimum Investment
As noted above, Justwealth non-RESP accounts require a minimum investment balance of $5,000. Justwealth only eliminates minimum investment requirements on its RESP accounts.
On the other hand, all Wealthsimple Invest accounts don’t have minimum investment requirements. This makes them more easily accessible than Justwealth non-RESP account accounts.
While the minimum investment requirement can’t determine your portfolio performance, it will impact your investment volume.
Justwealth vs Wealthsimple Invest: Returns
In terms of returns, Justwealth and Wealthsimple Invest perform differently given the differences in their investment strategy.
Below is a highlight of some of the returns of Justwealth portfolios as of October 31st, 2022
|Justwealth Global Conservative Growth Portfolio
|Justwealth Canadian Conservative Growth Portfolio
|Justwealth Conservative Income Portfolio
|Justwealth ESG Conservative Growth Portfolio
|Justwealth Capital Preservation Portfolio
|Justwealth U.S. Conservative Growth Portfolio
Wealthsimple Invest returns also vary across its portfolio types. The following are the returns of Wealthsimple Invest classic ETF portfolios as of October 31, 2022:
Obviously, the since-inception returns of Wealthsimple Invest classic ETF portfolios are impressive compared to the since-inception returns of the above Justwealth portfolios.
This goes to show how passively managed portfolios can outperform actively managed portfolios.
Justwealth vs Wealth Invest: Fees
As robo advisors, both Justwealth and Wealthsimple Invest charge management fees and management expense ratios (MERs).
The management fees of the two robo-advisors are the same only that they’re scheduled differently.
With Justwealth, you will be charged a 0.50% management fee on your initial $500,000 balance. When you exceed this balance, the fee will drop to 0.40%
In the case of Wealthsimple Invest, the 0.50% management fee applies on balances below $100,000. The management fee will drop to 0.40% when your balance exceeds $100,000.
That said, the average MER on Justwealth is 0.20%. Wealthsimple Invest MER varies per portfolio type as shown below:
- 0.13% – 0.16% for classic ETF portfolios
- 0.25% – 0.5% for Halal portfolios
- 0.50% for SRI portfolios
Depending on the portfolio you’re investing in, you will save more on MER on Wealthsimple Invest than you wound on Justwealth.
However, you would save on FX fees on Justwealth because the robo-advisor offers USD accounts. Wealthsimple Invest doesn’t have a USD account and it charges a currency conversion fee of 1.5%.
Justwealth vs Wealthsimple Invest: Availability
Finally, the two robo-advisors also differ in terms of their availability. As noted earlier, residents of Northwest Territories, Nunavut, Yukon and can’t access Justwealth at the moment.
On the other hand, Wealthsimple Invest is available to all the residents of Canada including Québec, Northwest Territories, Nunavut, and Yukon.
Here there’s no long story. Consider the robo-advisor that’s accessible to your resident. Of course, there are other robo-advisors to consider if neither Justwealth nor Wealthsimple Invest suits your needs. This includes:
- Questwealth Portfolios
- RBC InvestEase
- BMO Smartfolio
Justwealth vs Wealthsimple: Which to Choose?
We have just explored the key differences between Justwealth and Wealthsimple. It’s obvious that the two robo-advisors are not in the same class even though they’re among the best robo-advisors in Canada.
As a result, one of the robo-advisors will be more suitable to your needs than the other. What could that be? I guess not!
As our situations differ, so do our investment needs. So it’s essential to first understand your situation and investment needs before narrowing your selection between these robo-advisors.
The following are the key factors to consider when narrowing your selection between the two robo-advisors:
1. Investment Strategy
If you’re looking for a passively managed robo-advisor, Wealthsimple Invest is the right option here.
But unlike other passively managed robo-advisors, the management fees on Wealthsimple Invest don’t make a difference from those of actively managed robo-advisors such as Justwealth.
What this means is that you can’t go wrong with Justwealth or Wealthsimple Invest based on investment strategy.
2. Account Types
Since the two robo-advisors have similar investment accounts, we don’t have to dwell on that here.
However, the presence of a USD account on Justwealth and the absence of such on Wealthsimple Invest should ring a bell especially if you’re looking to invest in US securities.
Instead of paying a 1.5 foreign currency conversion fee on Wealthsimple Invest, you can save the cost by investing through a Justwealth USD account.
But if you’re looking to invest with CAD, you can’t go wrong with either of the robo-advisors.
The returns of the two robo-advisors differ and this is expectedly so. Besides the differences in investment strategy, the two robo-advisors have varying portfolio allocations.
This explains the possibility of significant differences in terms of their portfolio returns.
Even though Wealthsimple Invest’s returns outshine those of Justwealth, there’s no guarantee that such will replicate in the future.
Notwithstanding, choosing a robo-advisor with impressive returns will give you positive insight into its potential.
4. Minimum Investment
The difference in minimum investment requirement between Justwealth and Wealthsimple Invest says a lot about their level of accessibility.
Depending on your net worth, you may find Wealthsimple Invest more accessible as it has no minimum investment requirement.
But even if you have a high net worth, you may not be interested in having a $5,000 minimum investment balance on a Justwealth non-RESP account.
Notwithstanding, you can’t make the wrong choice of choosing between the two robo-advisors based on their minimum investment requirement.
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Verdict on Justwealth vs Wealthsimple Comparison
Justwealth and Wealthsimple are household names in the Canadian robo-advisory industry. But one thing is clear, the two robo-advisors are not in the same class.
As such, narrowing your selection between the two requires you to first know your class. This means understanding your situation and investment needs.
The bottom line of this comparison is that you can’t go wrong with either Justwealth or Wealthsimple so long as you choose the one that suits your situation and needs.
Need more clarification? Hit me up in the comment below or email our expert team at [email protected].
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