Robo Advisors A Touch More Human In Canada

December 29, 2016 So what’s the protocol for new clients? Do you put them through a risk tolerance test and then assign portfolios based on that?

Joanes: Yes. So, effectively a client comes in to the site. We ask questions to determine their risk and we assign a portfolio based on that. And as I said, we then have a follow-up discussion with the client in terms of what the portfolio is and the risks associated and make sure they understand that.

We've seen in that discussion that sometimes the client’s needs are straightforward. And as long as they have that basic portfolio that's going to reach their goals, it gets them there. And tell me a little bit, are your portfolios all 100% ETFs? Or is there a mix of mutual funds and cash?

Joanes: We have two types of offerings. The core part of our business is portfolios of low-cost ETFs that are diversified across various asset classes and geographies.

We also offer a group of private investment pools that have access to asset classes that are not easily captured by ETFs, such as mortgages, infrastructure, private equity, physical real estate. We offer portfolios that use those. So what percentage of your investments are in ETFs? Are all the ETFs you use Canadian-listed, or do you use any U.S.-listed?

Joanes: It's about 50/50 in ETFs and in our private investment portfolio. We offer all-Canadian-listed ETFs. We've seen that the Canadian ETF landscape is evolving. Most of the large providers from the U.S. have a presence in Canada, such as Vanguard, iShares, First Trust, WisdomTree.

We've also seen development of strategies beyond simple indexing, such as smart beta and active management. And with more than 400 ETFs in Canada, we are able to construct well-diversified portfolios for our clients.


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