WealthBar Review – How Does This Robo-Advisor Stack Up?

WealthBar

WealthBar is a Canada-based robo-advising service that adopts a low-risk, moderate-reward strategy for long-term investing. The platform offers excellent diversification and access to a financial advisor, but the management fees and minimum investment are somewhat higher than for competing platforms. That said, you can open a wide variety of accounts with WealthBar, making it ideal for tailoring the service to your long-term investing goals. In this review of WealthBar, we’ll take a closer look at this robo-advising service so you can learn more and find out if it is right for you.

About WealthBar

WealthBar was founded in Vancouver, Canada, in 2013 by Tea and Chris Nicola. The company currently manages around $275 million in user assets and has several licensed financial advisors on staff to answer customer questions. WealthBar was acquired by CI Financial in January 2019, but the platform’s original leadership team remains in place.

How WealthBar Works

WealthBar operates on the same model as many competing robo advisors. Your money is automatically invested in low-cost ETFs, and you reap the benefits of tax-loss harvesting and automatic rebalancing without lifting a finger.

Perhaps the most notable difference to WealthBar is that all clients get unlimited access to a certified financial planner. You can take advantage of this service to discuss which WealthBar portfolio or account type is right for your goal. Or, you can talk about any of your other financial questions like how big a mortgage you can afford or how much money you need to save for retirement.

When it comes to choosing a portfolio, WealthBar has a number of different options. There are five standard portfolios that range from “Aggressive” to “Safety,” depending on your risk tolerance. Helpfully, the company is upfront about the returns and volatility of each portfolio. You can see the annualized return for every year since WealthBar was founded as well as the weight of each ETF that goes into the portfolios. In general, portfolios contain a mix of US, Canadian and international stocks, corporate bonds, and real estate (through REITs).

WealthBar also offers three premium Private portfolios that have been more carefully crafted than the company’s standard portfolios. These have significantly better performance than the standard portfolios since they launched as well as lower volatility. Somewhat surprisingly, these are available for no additional fee relative to the standard portfolios – but the expense ratios are much higher.

Account Requirements

WealthBar is only available to Canadian residents or non-resident citizens. You can open an account with any amount of money, but you need a minimum of $1,000 CAD to begin investing.

WealthBar offers a number of different types of accounts, depending on your investing goals. You can open an RRSA, TFSA, RESP, RDSP, or non-registered account. There are also pension, trust, and corporate accounts available, but you will need to speak with a financial advisor before opening one of these. WealthBar also offers a high-yield savings account for free, but it is only available to existing investment customers. 

WealthBar Pricing And Fees

WealthBar charges an annual management fee of 0.60% up to $150,000. If you have more than $150,000 in accounts with this company, your fee drops to 0.40% for the next $350,000 and 0.35% for every dollar about $500,000.

In addition, you are responsible for paying the expense ratios of the ETFs you are invested in. For the standard portfolios, the total expense ratio ranges from 0.18% to 0.25%. For the Private portfolios, the expense ratio ranges from 1.00% to 1.55%.

WealthBar Platform And Tools

WealthBar’s platform is relatively straightforward. You can easily monitor your accounts and your return over time, as well as project your wealth in the future based on anticipated costs.

One of the nice things about the WealthBar online dashboard is that you can also use it for budget management to some extent. The interface enables you to input large monthly expenses along with your income so that you can track how much is left over for investing. This isn’t the most comprehensive budget tool, since it doesn’t link to your bank or credit cards to more accurately reflect your spending. But, it can be a useful tool if you want to improve the projections of future wealth that WealthBar displays.

Performance

WealthBar is upfront about the annual and lifetime returns of its portfolios. All of the portfolios, including the “Aggressive” portfolio, are relatively low-risk, and that is reflected in the expected returns. The Aggressive portfolio has an annual average return of 4.01% (with 9.49% volatility), the Balanced portfolio has a 3.11% return (with 7.77% volatility), and the Safety portfolio has a 1.78% return (with 4.30% volatility).

The Private portfolios fare significantly better. The Private Balanced portfolio, for example, has seen an average return of 4.97% per year with just 4.26% volatility. 

WealthBar Comparison To Alternative Investments

WealthBar offers an extremely wide variety of account types and access to a financial advisor. That makes it a very fully featured platform. But, if you want to cut costs while still having your investments managed for you, it might be worth looking at competitors Wealthsimple and Nest Wealth. Both offer lower fees, although you won’t get unlimited access to a financial planner.

It’s also worth noting that WealthBar’s portfolios are extremely conservative, and the returns are generally much lower than the broader market. More aggressive investors may be able to build a more aggressive and higher return portfolio on their own by investing in low-cost index ETFs through a brokerage. However, you won’t get tax-loss harvesting or automatic rebalancing if you go this route, and the volatility you experience may be much higher.

WealthBar Key Differentiators

The main thing that sets WealthBar apart is that you get unlimited access to a certified financial planner with your account. That’s a huge advantage for anyone with a complex financial situation or who needs a helping hand with investment. It also, to a large extent, justifies WealthBar’s high annual management fee.

Another reason to choose WealthBar is that it offers a wide variety of accounts. The fact that you can start out with a TFSA and then eventually work with an advisor to open a trust or individual pension plan through the same platform makes for a much smoother financial journey.

Trustworthiness

WealthBar has been around since 2013 and offers a level of transparency about how your money is invested that most robo advising platforms don’t match. The company is a fiduciary, and all financial advisors you speak to through WealthBar are certified, financial planners. Plus, all accounts at WealthBar are insured by the Canadian Investor Protection Fund, up to $1,000,000.

Who Is WealthBar Best For?

WealthBar is best for long-term investors who want both automated investments and access to a financial planner. This platform is especially useful if you want to open multiple different accounts for saving, retirement, and passing on wealth to your family.

However, if you aren’t sure whether you can take advantage of the financial planner, it’s worth taking a hard look at whether the fees that WealthBar charges are worth your while. The returns on WealthBar’s portfolios are relatively low, and the expense ratios of the underlying ETFs are relatively high.

Pros

• Unlimited access to a certified financial planner
• Open a wide variety of investment accounts
• Free high-yield savings account for clients
• Offers exposure to bonds and real estate
• Many different portfolio options to choose from

Cons

• Very high management fee and ETF expense ratios
• Conservative portfolios with meager returns
• $1,000 minimum deposit