CI Direct Investing / WealthBar Review 2021
The popular Canadian robo-advisor WealthBar was recently bought out by the wealth management company CI Financial and became CI Direct Investing.
Should you follow CI Financial’s lead and invest in this platform too? Find out in this CI Direct Investing (formerly WealthBar) review.
What is CI Direct Investing / WealthBar?
WealthBar, now known as CI Direct Investing, is an online investment service that makes it easy to invest your money.
Sitting in a category known as “robo-advisors,” WealthBar / CI Direct Investing takes care of all the little details, so you don’t have to.
Just like a financial advisor you would visit in person, WealthBar / CI Direct Investing helps you make decisions about how to invest your money, buys and sells investments on your behalf, and keeps your portfolio balanced in line with your needs.
How does CI Direct Investing / WealthBar work?
WealthBar / CI Direct Investing makes it easy to invest your money, even if you don’t know much about the stock market.
After you open a WealthBar account online, you’ll answer a series of questions to help determine your goals and risk tolerance.
You’ll then have a quick discussion with a (human) financial advisor who will help you make some decisions and review your investing plan with you.
Following the set up of your investment portfolio, you can start investing by transferring money from your bank account, savings, or existing investment provider.
As you deposit money into your WealthBar / CI Direct Investing account, the service will automatically invest it in the diversified portfolio you selected.
If you’re new to investing, there’s value in simplicity. WealthBar / CI Direct Investing lets you sign up online, helps you make straightforward decisions about your investments, and takes care of a lot of the dirty work.
(You don’t have to worry about whether you should invest in Apple or Tesla, and you don’t have to know the difference between high-yield bonds and government bonds.)
It then does its best to keep your portfolio “balanced.” For example, if you select the Balanced ETF Portfolio, 32% of your money is invested in corporate bonds, a type of investment that grows by lending money to companies who agree to pay it back.
Every time you deposit money, receive dividends, or make a withdrawal, CI Direct Investing automatically rebalances your portfolio. That means selling investments you have “too much” of and buying investments you have “too little” of according to your plan.
Your ETF portfolio will also automatically rebalance for you any time your asset mix (all the different investments that make up your account) strays too far from its target.
For example, if the value of your investments change so that corporate bonds make up 35% of your portfolio, rather than the target 32%, WealthBar / CI Direct Investing will sell enough corporate bonds to bring that category’s share down to 32%. They’ll then use the cash to buy other investments that are below their target share.
Over time, your investments will more than likely grow, and you can withdraw your money at any time.
Once your WealthBar / CI Direct Investing account is up and running, you can choose to deposit money automatically on a regular basis.
CI Direct Investing / WealthBar Sign-Up Requirements
You don’t need to have any money to open an account or get started, but until your WealthBar / CI Direct Investing account has $1,000 in it, your money will be parked as cash, earning a negative return after inflation.
Other robo-advisors start investing your money right away with no minimum.
WealthBar / CI Direct Investing is only available to current Canadian residents (including permanent residents) and Canadian citizens living abroad.
ExPats need to have a Canadian bank account and invest a minimum of $25,000.
CI Direct Investing / WealthBar Mobile App
WealthBar / CI Direct Investing has an app for iOS and Android that lets you check in on your money from anywhere, so you can double-check how rich you are without getting out of bed.
CI Direct Investing / WealthBar Account Options
WealthBar / CI Direct Investing lets you take advantage of Canadian savings programs that shelter your investments from tax.
The big three registered investing accounts offered include:
- The Registered Retirement Savings Plan (RRSP) lets you defer income tax on the money you invest until you retire.
- The Tax-Free Savings Account (TFSA) lets you earn investment income on a wide variety of investments without paying tax.
- The Registered Education Savings Plan (RESP) lets you save money for a child’s education and gain access to valuable government grants.
Wealthbar / CI Direct Investing also offers other registered and non-registered accounts, including:
- Registered Retirement Income Fund (RRIF)
- Locked-In Retirement Account (LIRA)
- Life Income Fund (LIF)
- Group RRSPs and Group TFSAs
- Formal In-Trust
- Informal In-Trust
- Individual Pension Plan (IPP)
- Personal Pension Plan (PPP)
CI Direct Investing / WealthBar Investing and Portfolio Options
WealthBar / CI Direct Investing only offers five choices of portfolio suitable for the average beginner investor:
Chances are one of these portfolios will meet your needs, but compared to competing robo-advisors, these investment options are limited.
CI Direct Investing / WealthBar Socially Responsible Investing
The problem with many hands-off investments is that your money can fund activities you don’t necessarily agree with.
Fortunately, Wealthbar / CI Direct Investing offers Socially Responsible Investments (SRIs) that can bring your portfolio in line with your ethos.
Despite the wide variety of SRIs out there, CI Direct Investing / WealthBar only offers two SRI options.
- The first is an ETF that invests exclusively in clean technology companies like wind and solar power, available only as an add-on to your otherwise “unclean” portfolio.
- The second is a Halal portfolio that offers ethical Islamic investments through partner company Manzil.
CI Direct Investing / WealthBar Fees
WealthBar was already one of the more expensive options before it became CI Direct Investing, and unfortunately, that has not yet changed.
In addition to the management expense ratios (MERs) charged by the individual investments, WealthBAr / CI Direct Investing charges a management fee of 0.60% per year on the first $150,000 you invest.
On a modest $20,000 portfolio, every 0.1% adds up to $20 per year. That might not sound like a lot, but your fees will grow along with your investments and could become significant by the time you’ve saved enough to retire.
On the plus side, WealthBar / CI Direct Investing will cover at least a portion of any transfer fees you have to pay to switch.
CI Direct Investing / WealthBar Pros & Cons
Generally speaking, robo-advisors all have their pros and cons versus more traditional methods of investing.
Most notably, robo-advisors beat human financial advisors on fees, frequency of updates, and ease of access to your investments.
Conversely, they fall short in terms of customization, and the ability to have a one-on-one conversation with an expert about your money (although robo-advisors are rapidly improving in this category).
Among its peers, WealthBar / CI Direct Investing also has its pros and cons.
Pros: The Good StuffNo minimum investments to open account
Save money automatically
Dedicated mobile app available for iOS and Android
Provides the best Canadian investing accounts and tax shelters
Cons: The Not So Good StuffHigher fees than most (but not all) competitors
$1,000 minimum to start investing
Investment choices are limited
SRI options are very limited
Available to Canadian citizens and residents only
Our Final Thoughts
If you’re a beginner investor who values simplicity and ease, CI Direct Investing is a good option for you. The limited number of portfolios and higher fees might irk more advanced investors, but might work to your advantage, especially if you’re not interested in getting deep into the nuts and bolts of investing.
While its simplicity lends itself well to beginners, CI Direct Investing’s relatively high fees and $1,000 minimum investment paradoxically create a barrier to entry that’s higher than other options.
Overall, CI Direct Investing (formerly WealthBar) is a worthy choice for Canadians who want to keep things simple, have at least some money they’re looking to invest, and aren’t too worried about paying the lowest fees possible. If that sounds like you, give WealthBar / CI Direct Investing a try.
Frequently Asked Questions
There’s no better time to start investing than when you’re young. But that comes with a caveat. If you have any debt whatsoever, including student debt, it’s best to pay that off before opening an account.
If you’re a debt-free student, or you want to start investing a small amount of money as a learning opportunity or hobby, choose a provider that offers lower fees, a lower minimum investment and more choice of investments than WealthBar / CI Direct Investing.
Yes. Only Canadian residents (including permanent residents) can open a WealthBar / CI Direct Investing account.
Canadian citizens living abroad may open an account, but with a higher minimum investment and less access to Canadian tax shelters.
Like all investment providers, CI Direct Investing makes money by charging you to manage your portfolio. CI Direct Investing / WealthBar fees are 0.6% of the first $150,000 you invest, 0.5% of the next $350,000, and 0.35% of any additional amount per year.
You will also have to pay a small fee called a management expense ratio (MER) by the funds you invest in. These range from an additional 0.16% to 0.26% per year.