As technology is dominating virtually all aspects of our lives, knowledge and ability gaps are decreasing by the day.
Before now, investment used to be seen as the exclusive business of those with advanced knowledge of the stock market.
Fortunately, the coming of robo-advisors like VirtualWealth has democratized the investment industry and made it accessible to everyone.
VirtualWealth is considered among the best Canadian robo-advisors.
But before handing your funds to VirtualWealth, there are key things you need to know to make an informed decision.
In this VirtualWealth review, I cover what the robo-advisor entails and how it compares with other robo-advisors in Canada.
Let’s go there.
Table of Contents
Overview of VirtualWealth
| Investment platform | Robo-advisor |
| Year established | 2017 |
| Parent company | Aviso Wealth |
| Management style | Active |
| Portfolios | ETFs, Responsible Investing and mutual funds |
| Account types | Taxable, TFSA, RRSP, RLSP, LRSP, LIRA and RESP accounts |
| Minimum investment | $2,000 |
| Management fee | 0.35% – 0.60% |
| MER (on ETFs) | Less than 0.15% |
| CIPF coverage | Yes |
| IIROC regulation | Yes |
VirtualWealth, the former name of Qtrade Guided Portfolios is one of the most popular robo-advisors in Canada.
The robo-advisor is offered by Aviso Wealth, a 25-year-old wealth manager with 30 partners and 100 billion in assets under administration and management.
VirtualWealth offers active management robo-advisory services using robots and professional human advisors.
Assets with the robo-advisor are insured up to $1 million per insured category by the Canadian Investor Protection Fund (CIPF).
The practices of VirtualWealth are guided by the Industry Regulatory Organization of Canada (IIROC) as is the case with other robo-advisors in the country.
Who Owns VirtualWealth?
Short answer, Aviso Wealth owns VirtualWealth (Qtrade Direct Portfolios).
However, the robo-advisor serves as the trade name of Credential Qtrade Securities Inc.
As per Aviso Wealth, it has more than two decades of experience as a wealth manager in Canada.
Aviso is partnered with over 300 institutions and it has $100 billion in assets under management and administration.
In addition to independent financial institutions, Aviso Wealth also services almost all the credit unions in Canada.
Besides robo-advisory offerings, Aviso Wealth also provides a self-directed investment platform known as Qtrade.
With Aviso Wealth, you can also access a wide range of investment solutions and insurance products.
How Does VirtualWealth Work?
If you’re familiar with how robo-advisors work, that’s exactly the working process of VirtualWealth.
To invest on your behalf, VirtualWealth will require you to answer an investment questionnaire to ascertain your:
- Investment objective
- Investment time horizon
- Risk tolerance
- Income level
- And so on
Upon understanding your situation, the robo-advisor will require you to make a minimum of $2,000 deposit to start investing on your behalf in a low-cost diversified portfolio.
You can make this deposit at once or in installments. But VirtualWealth will only invest your funds when you have a minimum balance of $2,000.
Once your funds are invested, professional portfolio managers will monitor the investment and rebalance it regularly.
VirtualWealth Portfolios
VirtualWealth has an ETF, Responsible Investing (RI) and mutual fund portfolios.
Depending on your investment objective, the robo advisor will invest your funds automatically into any of these portfolios.
Let us have a brief look at the ETF and RI portfolios of the robo-advisor.
VirtualWealth ETF Portfolios
VirtualWealth ETF portfolios provide global exposure to stocks and bonds according to different risk levels.
The ETFs cut across Canadian, US and International ETFs such as:
- Vanguard FTSE Canada All Cap Index ETF
- Vanguard Global ex-U.S. Aggregate Bond Index ETF (CAD-hedged)
- iShares Core MSCI Total International Stock ETF
- iShares Core S&P Total U.S. Stock Market ETF
- FlexShares STOXX Global Broad Infrastructure Index ETF
The following is a breakdown of the assets allocation of VirtualWealth ETF portfolios:
| Portfolio | Assets allocation |
| Maximum growth portfolio | 100% equity |
| Growth portfolio | 80% equity and 35% fixed income |
| Income portfolio | 80% fixed income and 20% equity |
| Income & growth portfolio | 65% fixed income and 35% equity |
| Growth & balanced portfolio | 65% equity and 35% fixed income |
| Balanced portfolio | 50% fixed income and 50% equity |
As always, the higher your risk tolerance, the higher your stock allocations. The opposite is the case if you have a lower risk tolerance.
VirtualWealth RI Portfolios
The VirtualWealth Responsible Investing (RI) portfolios are tailored to investors that are interested in value investing.
With this portfolio, funds are strictly invested in companies that meet the standards of environmental, social and governance (ESG).
ESG companies usually invest in tobacco, nuclear power, weapons and other unethical practices.
By investing in a RI portfolio, you will help improve society while maintaining your personal values.
That being said, the asset allocation breakdown of VirtualWealth RI portfolios is the same as those of the ETF portfolios highlighted above.
Below are some of the local and foreign mutual funds that the VirtualWealth RI portfolios invest in:
- NEI Canadian Equity RS Fund
- NEI Canadian Bond Fund
- NEI U.S. Equity RS Fund
- NEI Global Total Return Bond Fund
As you shall learn shortly, the VirtualWealth RI portfolios have relatively higher management expense ratios (MERs) compared to those of VirtualWealth ETF portfolios.
Is VirtualWealth Safe?
The short answer is yes. VirtualWealth comprises the key features of a safe robo-advisor in Canada.
Firstly, the robo-advisor is regulated by the Investment Industry Regulatory Organization of Canada (IIROC). This means that it adheres to the best industry practices.
Secondly, assets with VirtualWealth are insured by the CIPF up to $1 million per eligible account. This means that investors have nothing to worry about should VirtualWealth go out of business in the future.
Thirdly, investors’ data with VirtualWealth are protected using advanced security measures such as 256-bit encryption — the strongest and most robust encryption at the moment.
With the backing of its parent company (Aviso Wealth), you can guarantee maximum safety with Qtrade Guided Portfolios (VirtualWealth).
VirtualWealth Investment Accounts
Depending on your investment objective and needs, VirtualWealth can invest your funds using a registered or non-registered account.
Investments in registered accounts are tax-deferred while investments in non-registered accounts are tax-deductible.
Below are the registered and non-registered accounts available on VirtualWealth:
- Tax-Free Savings Account (TFSA)
- Registered Retirement Savings Plan (RRSP)
- Locked-in Retirement Account (LIRA)
- Locked-in Retirement Savings Plan (LRSP)
- Restricted Locked-in Savings Plan (RLSP)
- Registered Education Savings Plan (RESP)
- Cash
Compared to the collections of other robo-advisors in Canada, VirtualWealth has a wide range of registered accounts.
VirtualWealth Fees
Robo-advisors charge management fees to sustain themselves in business.
On the other hand, the fund providers on the robo-advisors charge management expense ratios (MERs) in exchange for their products.
So there are two major fees you will encounter when investing with VirtualWealth — management fees and MERs.
What are these fees?
The management fees are the same on all VirtualWealth portfolios. They are tiered by investment amount as shown below;
| Investment amount | Rate |
| Above $1 million | 0.35% |
| $500,000 | 0.40% |
| $400,000 | 0.50% |
| Initial $2,000 – $100,000 | 0.60% |
Note: The first quarter management fee is waived.
One clear point from the above table is that the higher your investment amount, the lower the management fee on VirtualWealth.
However, the management fee is reduced if you have several accounts with VirtualWealth — be it individual accounts or household accounts.
That being said, the VirtualWealth management fee schedule is on the high side compared to the management fees of other robo-advisors in Canada.
To worsen the situation, VirtualWealth management fees are charged quarterly. Most robo-advisors in Canada have an annual schedule.
As per management expense ratios (MERs), the schedules vary considerably on VirtualWealth. This is because the fees are charged by fund providers, not VirtualWealth.
The MERs vary per VirtualWealth portfolio as shown below:
- ETF MER: Less than 0.15%
- RI MER: 0.72% to 0.96
In addition to the above management fees and MERs, the following are other fees charged on VirtualWealth:
| Electronic funds transfers | $0 |
| Cheque requests | $10 per request |
| Paper statement requests | $6 per request |
| Paper trade confirmation requests | $2.50 per trade |
| Account estate settlement | $250 |
| Registered account partial deregistration (excluding RESP and TFSA) | $250 |
| Registered account full deregistration of a registered account | $125 |
| Account transfer out | $150 (for partial and full transfer) |
| Closing account within one year | $100 |
VirtualWealth Pros and Cons
Every robo-advisor has its good and ugly sides. Qtrade Guide Portfolios (VirtualWealth) is not an exception. Below are the pros and cons of the robo-advisor that are worth considering.
Pros of VirtualWealth
- Broader diversification: From Canadian and US to international markets, VirtualWealth provides global exposure to investors. This helps maximize your investment returns with ease.
- Multiple portfolios and accounts: In addition to traditional ETF portfolios, VirtualWealth also offers access to Responsible Investing and mutual fund portfolios. Compared to the collections of robo-advisors in Canada, VirtualWealth has a wide range of registered accounts.
- Hybrid portfolio management: Instead of leaving your portfolio to the mercy of robots, VirtualWealth employs the service of professional portfolio managers to give your portfolio a human touch. This reduces errors and matches your portfolio with current market realities.
- Automated contributions: Besides automating your investment, VirtualWealth also allows you to automate your investment contribution. This way, you can focus on what matters most in your life while growing your portfolio.
Cons of VirtualWealth
- High fees: VirtualWealth quarterly management fee is scheduled on the high side when compared to the annual fees of other robo-advisors in Canada.
- Minimum investment requirement: The robo-advisor requires a relatively higher minimum balance of $2,000 to kickstart investment. This serves as a barrier to investors with limited budgets.
- No tax-loss harvesting: Tax-loss harvesting helps reduce capital gains tax on taxable accounts. This feature is not available on VirtualWealth.
- No performance data: We don’t have an idea of how VirtualWealth portfolios performed in the past. This is because the data is not disclosed to the general public even though the robo-advisor has been in existence since 2017.
How to Open a VirtualWealth Account
There are two ways of opening a VirtualWealth account — via a VirtualWealth web portal and mobile app.
The method you choose will depend on your preference.
But regardless of the method you choose, the registration process is straightforward.
As expected, you will be required to provide your personal information such as full name and email address when opening a VirtualWealth account.
Accordingly, VirtualWealth will require information about your investment objective, time horizon, risk tolerance, income etc. to match you with a suitable portfolio.
Once your account is created, you can fund it with a minimum of $2,000 to start investing immediately.
How VirtualWealth Compares
VirtualWealth is not the only robo-advisor in Canada. Before its existence, there were already ModernAdvisor, Questwealth Portfolios, Wealthsimple Invest, Justwealth, and so on.
However, not all the existing robo-advisors compete significantly with VirtualWealth.
In this section, we’re going to see how VirtualWealth compares with some of the leading robo-advisors in Canada — Wealthsimple Invest and Questwealth Portfolios.
VirtualWealth vs Wealthsimple Invest
| Profile | VirtualWealth | Wealthsimple Invest |
| Parent company | Aviso Wealth | Wealthsimple |
| Investment strategy | Active management | Passive management |
| Portfolio type | ETF, RI and mutual funds | ETFs, Halal and SRI portfolios |
| Minimum investment account | $2,000 | None |
| Registered accounts | TFSA, RRSP, LRSP, LIRA, RLSP and RESP | TFSA, RRSP, RRIF, LIRA, and RESP |
| Non-registered accounts | Cash account | Personal, joint, & business accounts |
| Management fee | 0.35% – 0.60% (first quarter fee waiver) | 0.4% – 0.5% |
| MER (ETF) | Below 0.15% | 0.13% – 0.16% |
| Tax-loss harvesting | N/A | Available |
| Assets coverage | $1 million per insured account by CIPF | $1 million per insured account by CIPF |
| Regulatory body | IIROC | IIROC |
Wealthsimple Invest is Wealthsimple’s equivalent of VirtualWealth.
Using a passive management strategy, Wealthsimple Invest automates the entire investing process for investors.
Besides ETF portfolios, Wealthsimple Invest also offers access to halal and SRI portfolios in one place.
But unlike VirtualWealth, Wealthsimple Invest doesn’t require a minimum balance to start investing.
With Wealthsimple Invest, capital gains tax is reduced on non-registered accounts, a feature that’s not available on VirtualWealth.
Although Wealthsimple Invest management fees are among the highest in Canada, they’re lower than those of VirtualWealth because they are charged annually.
Wealthsimple Invest portfolio returns are available for the general public and they are competitive compared to the returns of other passively managed robo-advisors in Canada.
Learn more: VirtualWealth vs Wealthsimple Invest
VirtualWealth vs Questwealth Portfolios
| Profile | VirtualWealth | Questwealth Portfolios |
| Parent company | Aviso Wealth | Questrade |
| Investment strategy | Active management | Active management |
| Portfolio type | ETF, RI and mutual funds | ETF and SRI portfolios |
| Minimum investment account | $2,000 | $1,000 |
| Registered accounts | TFSA, RRSP, LRSP, LIRA, RLSP and RESP | TFSA, RRSP, RIF, LIF, LIRA and RESP |
| Non-registered accounts | Cash account | Cash & corporate cash accounts |
| Management fee | 0.35% – 0.60% (first quarter fee waiver) | 0.20% – 0.25% |
| MER (ETF) | Below 0.15% | 0.17% – 0.22% |
| Tax-loss harvesting | N/A | Available |
| Assets coverage | $1 million per insured account by CIPF | $1 million per insured account by CIPF |
| Regulatory body | IIROC | IIROC |
Questwealth Portfolios is Questrade’s equivalent of VirtualWealth.
This robo-advisor also uses an active management strategy like VirtualWealth to automate investing.
Even though both Questwealth and VirtualWealth require a minimum balance on investment, Questwealth has a lower requirement of $1,000.
In addition, Questwealth has lower management fees than VirtualWealth and the fees are charged annually not quarterly.
As with Wealthsimple Invest, capital gains taxes on Questwealth’s non-registered accounts are reduced with tax-loss harvesting.
With competitive returns, Questwealth is ahead of VirtualWealth on various grounds.
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Takeaways on VirtualWealth Review
One thing to take from this VirtualWealth review is that the robo-advisor is not suitable for the average investor.
Besides having higher management fees, VirtualWealth also requires a relatively higher minimum investment balance.
Coupled with these, the robo-advisor doesn’t disclose its portfolio performance to help potential investors make informed decisions.
With no tax-loss harvesting on taxable accounts, I can’t recommend VirtualWealth to the average investor in Canada.
But if the robo-advisor suits your needs, then you can’t go wrong with it. Else, you may be better off with Wealthsimple Invest, Questwealth Portfolios or other top-ranking robo-advisors in Canada.
Hopefully, this VirtualWealth review has improved your knowledge about the robo-advisor.
If you need more clarification, kindly drop a comment below or contact our expert team at [email protected].
For more related information, check out the following articles and visit our Investing Archive before leaving.
