Robo Advisors A Touch More Human In Canada

December 29, 2016

Neville Joanes is portfolio manager and CCO at WealthBar, Canada's first full-service portfolio manager to conduct its services entirely online, with clients across Canada with an average account size of $90,000. Joanes will be speaking at the Inside ETFs conference in Florida on Jan. 22 on “The Rise of the Canadian Robo Advisor.” caught up with him to discuss the differences and similarities between robo advisors there and in the U.S. Are there differences and similarities between what's happening in the Canadian robo industry space compared to the U.S.?

Neville Joanes: The robo space in terms of Canada and the U.S. are similar in offering a broad-based offering. They both provide online financial advice to clients at a low cost, mainly using ETFs. And much like our counterparts in the U.S., here in Canada, we're able to leverage technology to offer local solutions online.

What we've seen in general is that people are doing more and more online each day. They interact with each other, they bank, they shop. They've developed confidence around investing and working online. So there's less "It's new; I'm scared of it."

They look at the reliability of the service, and people are more inclined to trust an online advisor, especially if it's associated with a brand or they're reading more about them.

Where we differ from the U.S. is, in Canada, the regulatory environment is slightly different. We're required to have a portfolio manager and an advisor review every account with the client. So we have a follow-up process with each client. It's not pushed through, like simply "click, click, click." There actually has to be interaction with an advisor.

You don't have to physically talk to a human with us. You can send us a message, you can email. But regulators here require some interaction between the advising representative and the client. We have to explain to the client on a basic level what the portfolio is, to make sure they understand it. We found that initially this was a hindrance, but we've actually embraced it. And can clients call?

Joanes: Yes, they can call, and they can use our online chat function to connect with a person. The main reason is to help the client with their understanding of the portfolio and provide financial planning. And that's how we differentiate ourselves from our peers here in Canada. We provide more financial planning for the client.


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