Justwealth Review 2021

A Justwealth Review for 2021

Woman looking at Justwealth on the computer

When it comes to investing, many people are unsure of how to get started. They may find it complicated, confusing, boring, or a combination of all three. However, the introduction of robo-advisors to Canadians has made the process of investing a little easier for the average investor.

In this Wealth Rocket article, we’ll provide a review of Justwealth, one of the many robo-advisors in Canada, with an assessment of fees, portfolio and investment options, pros and cons, and more.

Justwealth Review 2021: Fees, Portfolios, and More

Justwealth calls itself an online portfolio management platform, which is also known as a robo-advisor.

It’s an independent company based in Toronto, Canada. It is privately held and not owned or backed by a large financial institution like some of its competitors.

Justwealth: Sign-Up Process

To open a Justwealth account, you need to provide some general personal, employment, and financial information.

Once Justwealth knows your investment objectives, it builds you a tailored portfolio using a set-up wizard.

Portfolios contain various ETFs from different providers to construct a portfolio aligned to your investment goals.

Justwealth offers more than 70 different portfolios designed to increase your wealth, generate income, or preserve your wealth.

A dedicated portfolio manager will invest your money in selected ETFs once you’ve set up your account.

This personal portfolio management is ideal for your situation, whether for creating a tax-efficient portfolio, saving for retirement, or putting away money for your child’s education.

If you open up a Registered Education Savings Plan (RESP), you’ll invest in what’s called a target-date portfolio.

As your child gets older, the allocation to stocks will decline as a way to reduce risk. When your child starts their post-secondary education, the portfolio focuses on capital preservation.

Justwealth says it’s the only investment manager in Canada that has such an offering.

Transferring funds to Justwealth is easy. You can set up automatic payments from your bank account.

Keep in mind that a robo-advisor doesn’t handle financial planning. If you use one, it will be up to you to create your personal finance goals and figure out how you can achieve them.

Its employees have worked for investment managers and financial institutions in Canada, so they know what they’re doing.

The company offers its services to consumers, businesses, financial advisors, and non-profit organizations. Like other robo-advisors, Justwealth manages your money, so you don’t have to.

It’s an ideal situation for those who want a low-cost alternative to mutual funds.

Justwealth: Account Options

The type of accounts you can get is similar to what other robo-advisors offer.

These are the different account types available from Justwealth:

  • Non-registered
  • Registered Retirement Savings Plan (RRSP)
  • Spousal RRSP
  • Tax-Free Savings Account (TFSA)
  • Locked-In Retirement Account (LIRA)
  • Registered Education Savings Plan (RESP)
  • Registered Retirement Income Fund (RRIF)
  • Life Income Fund (LIF)

Justwealth: Fees

The fees you pay will vary depending on the size of your investment portfolio.

The annual management fee is 0.5% on the first $500,000 invested. The minimum management fee is $4.99 a month for all types of accounts except for RESPs, which are subject to a minimum monthly fee of $2.50.

For any amount above $500,000, the fee is 0.4%. So, if you have $550,000 invested, the fee is 0.5% on the first $500,000 and 0.4% on the remaining $50,000.

On top of the management fee are fees for the underlying ETFs. That fee is about 0.2%. Assuming your portfolio is worth less than $500,000, your annual fees will be around 0.7% (0.5% annual management fees + 0.2% annual ETF management fees).

Compared to the average mutual fund, Justwealth’s fees are about one-third lower.

You need $5,000 to open an account unless you’re a student, a new graduate, or it’s an RESP.

While the management fee is 0.5% for non-RESP accounts with assets less than $500,000, it can be much higher if you don’t have a lot invested.

If you invest less than $12,000, the fee is $4.99 a month or $59.88 a year. On a $5,000 portfolio, that works out to an annual management fee of 1.2%. When you’ve invested $12,000 or more, the management fee is 0.5%.

You need $5,000 in order to open an account unless you’re a student, a new graduate, or it’s an RESP.

While the management fee is 0.5% for non-RESP accounts with assets less than $500,000, it can be much higher if you don’t have a lot invested.

If you invest less than $12,000, the fee is $4.99 a month or $59.88 a year. On a $5,000 portfolio, that works out to an annual management fee of 1.2%. When you’ve invested $12,000 or more, the management fee is 0.5%.

The fees can be higher when compared to some other robo-advisors. For example, Wealthsimple Invest’s management fee drops to 0.4% once your portfolio reaches $100,000. And Questwealth Portfolios’ fees are 0.25% on a balance under $100,000 and fall to 0.2% when the balance is $100,000 or more.

Justwealth’s management fee is 0.4% when you have more than $500,000 in assets, but only on the amount above that level. The fee is still 0.5% on the first $500,000.

If you want to make a withdrawal, there aren’t any fees if you withdraw from a TFSA, RESP, RRIF, or non-registered account.

If you withdraw from your RRSP, the fee is $25 plus HST for a partial withdrawal or $50 plus HST for a full withdrawal.

If you no longer want to invest with Justwealth and want to transfer your account to another financial institution, there are transfer fees. There’s a $50 fee for a partial account transfer or a $150 fee for a full account transfer.

Justwealth: Minimum Investment

Justwealth also has a $5,000 minimum investment to get started. For RESP accounts, there isn’t a minimum investment.

For a new investor who doesn’t have a lot saved up, this can be a big deterrent. Other robo-advisors have a lower minimum investment or no minimum at all. For example, Wealthsimple has no minimum investment, RBC InvestEase has a $100 minimum, and BMO SmartFolio has a $1,000 minimum.

If you’re 18 or older and a student or a recent graduate, the minimum investment is just $500 instead of $5,000 and management fees are $0 for six months.

You must be currently enrolled in a post-secondary institution or have graduated in the last two years. To qualify, you must provide proof of enrollment or graduation.

Justwealth Pros & Cons

Pros: The Good Stuff

Logo More than 70 portfolio options in both Canadian and U.S. dollars.

Logo $500 investment minimum and no management fees for post-secondary students and recent graduates.

Logo Target-date portfolio for RESP accounts.

Cons: The Not So Good Stuff

Logo High minimum investment requirement.

Logo Higher fees than competition.

Logo No mobile app.

Our Final Thoughts

In this Justwealth review, the robo-advisor has a lot going for it. It has a wide selection of portfolio options and no minimum investment for RESPs. However, some of its competitors don’t require a $5,000 minimum investment and they have lower management fees.

Frequently Asked Questions

Justwealth is a 100% privately owned and operated company. The Toronto-based company says this “allows us to make decisions that are exclusively in the best interests of our clients, not our shareholders.” It was co-founded by Andrew Kirkland and James Gauthier. Both have extensive experience in the financial services industry.

Yes, Justwealth is only available to Canadians who reside in one of the 10 provinces. You must be at least 18 or older in order to open an account with the company. Justwealth doesn’t currently offer services to anyone living in Nunavut, the Northwest Territories, or Yukon. If you’re a non-resident, you’re also unable to open an account.

The company says the technology and security measures it uses is comparable to that offered by banks. A Justwealth account is registered in your name, which means you or anyone you authorize can access your assets. The company can only access them to pay for management fees. Your assets are also protected by the Canadian Investor Protection Fund (CIPF) for up to $1 million, which protects your assets should the company become insolvent.

About the Author

In fermentum posuere urna nec. Facilisi cras fermentum odio eu feugiat pretium. Risus ultricies tristique nulla aliquet enim. Sed vulputate odio ut enim blandit volutpat maecenas volutpat. Id volutpat lacus laoreet non curabitur gravida arcu ac tortor.

Read Review >