Tag Archives: robo-advisers

Robo advisers here to stay: Dan Hallett

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Dan Hallett (Twitter.com)

Good piece by High View Financial Group’s Dan Hallett in the Globe & Mail the past 24 hours.

In Why robo-advisers are here to stay, Hallett notes that the user-friendly online investment advisory firms removes the sometimes intimidating barrier of dealing with human advisors face-to-face: “Leveraging the power of user-friendly technology removes that barrier for the tech-savvy while creating a scalable platform for these firms. This keeps costs low; a key benefit of Robo-Advisors.

(Note on spelling: the G&M spells it robo-adviser in the headline but robo-advisor in the story itself. The Hub prefers robo-adviser but some guest bloggers spell it the other way.)

In any case, this is a nice example of a market “naturally establishing a pricing floor for basic investment advice,” Hallett writes, “i.e. 35 basis points (0.35%) per year of the value of client portfolios plus tax and product fees.”

Hallett predicts some traditional advisors could get pushed out of the business: every Robo-Advisory firm he’s looked at is a licensed portfolio manager and hence a legal fiduciary.

Some Drawbacks
Continue Reading…

Invisor.ca launches “goal-based” robo-like service

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Invisor (CNW Group/Invisor)
Invisor Logo (CNW Group)

By Jonathan Chevreau

Financial Independence Hub

After the initial wave last year of new robo-advisers washing up on the shores of the Canadian market comes a variation on the theme — a so-called “goal-based” online investment management service called Invisor.ca.

Announced Tuesday, the service claims to offer “personalized online investment management at a fraction of the cost of a traditional financial advisor.” The service is available initially in Ontario and Manitoba and it plans to register in other provinces “in the near future.” The custodian is Credential Securities Inc.

The reference to traditional advisors is evidently to mainstream retail mutual funds, whose fees are high enough that all domestic robo-advisers can undercut them and still make money. In a press release, Invisor notes that many Canadians pay more than 2.5% a year for mutual funds and that “in some cases these costs can be s high as 2.8% to 2.9%.” Continue Reading…

Weekly wrap: TFSA fever & the looming election, how robo-advisors affect human advisors, and more

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“Glad I saved up in my super-sized TFSA for these new shoes. These are almost twice as big as my old pair.”

By Jonathan Chevreau

Judging by the post-budget media coverage, Tax-free Savings Accounts or TFSAs are now a household name. Little wonder, with nearly 11 million Canadians enrolled in them. (For any American readers, the TFSA is the equivalent of Roth plans: no tax deduction going in but no tax going out. The TFSA was introduced in Canada in January 2009).

Seeing as the TFSA is shaping up to be a major political issue, this topic won’t be going away any time soon. On Twitter following the budget, I highlighted several note-worthy pieces that touch either on the mechanics of the new $10,000 TFSA limit, the political implications or both.

Yes, Ontario followed up with a budget of its own but by definition that’s a bit “provincial.” You can find all you really need to know by reading Andrew Coyne’s piece in the National Post: Little Difference Between Ontario and Federal budget, until it comes to deficit.

No, the big kahuna was the federal budget and – as part of the Findependence Trifecta I wrote about on Tuesday – the TFSA expansion. As regular Hub readers know, we were quick to make the extra $4,500 contribution and by Friday the papers were reporting finally that CRA had blessed the strategy of topping up the TFSA immediately. For instance, the Globe’s Bill Curry in CRA clarifies time line of new limit. And John Heinzl did a Q&A with CIBC’s Jamie Golombek on some of the mechanics of transferring securities in-kind from taxable accounts to TFSAs

Over at the National Post, columnists did a good job explaining the political battles that are swirling around the TFSA, Continue Reading…

A visual guide to the Budget

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wealthbarlogoIf you prefer pictures and graphics over text, you may enjoy this visual guide to Tuesday’s federal Budget, prepared by Vancouver-based robo-advisers, Wealthbar.com.

Until we figure out how to embed it here at the Hub, we’ll just send you over to the graphic housed at Wealthbar’s site. Just click on the red link below:

http://blog.wealthbar.com/visual-guide-to-the-2015-canadian-federal-budget/

Weekly wrap: fingers crossed for TFSA doubling, how to spend your tax refund, looking under the Robo hood

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Gordon Pape (www.everythingzoomer.com)

Gordon Pape, author of the definitive TFSA book, Tax-Free Savings Accounts,  wrote a couple of good pieces this week for the Globe & Mail on what next Tuesday’s federal budget may have in store for the TFSA. In TFSAs benefit more than the rich, Pape listed various groups that can benefit from TFSAs, including seniors, savers, young people, income splitters and low-income Canadians. Or as I’ve said, pretty much every Canadian 18 years of age or more.

An earlier Pape column on Monday titled Oliver’s plan to raise TFSA limits raises many questions, looked at whether the promised “doubling” of an annual TFSA contribution limits would be double the original $5,000 limit, for a total of $10,000, or double the current $$5,500 limit for a total of $11,000. Hey, we’d be happy with either event! The other main question is how inflation indexing would be handled.

Over at Retirement Redux, Sheryl Smolkin looks at What Seniors Want in the federal budget. Continue Reading…