Quick Comparison
| Factor |
DIY Investing |
Robo-Advisor |
Financial Advisor |
| Total annual cost |
0.05-0.25% |
0.55-1.00% |
1.00-2.50% |
| Cost on $100K/year |
$50-$250 |
$550-$1,000 |
$1,000-$2,500 |
| Cost on $500K/year |
$250-$1,250 |
$2,750-$5,000 |
$5,000-$12,500 |
| Time required |
2-4 hours/year |
30 min/year |
0 hours |
| Knowledge needed |
Moderate |
Low |
Low |
| Rebalancing |
Manual |
Automatic |
Automatic |
| Tax-loss harvesting |
Manual |
Automatic (some) |
Sometimes |
| Financial planning |
No |
Limited |
Comprehensive |
| Best for |
Cost-conscious, hands-on investors |
Busy professionals, beginners |
Complex situations, high net worth |
The True Cost of Fees Over 30 Years
Starting with $50,000, contributing $500/month, 7% gross return:
| Approach |
Fee |
Portfolio at 30 Years |
Fee Drag (Lost) |
| DIY (index ETF, 0.20%) |
0.20% |
$724,000 |
$17,000 |
| Robo-advisor (0.70%) |
0.70% |
$663,000 |
$78,000 |
| Financial advisor (1.50%) |
1.50% |
$579,000 |
$162,000 |
| Mutual funds (2.20%) |
2.20% |
$513,000 |
$228,000 |
Fee drag = how much the fees cost versus a zero-fee scenario ($741,000).
DIY Investing
How It Works
| Step |
Details |
| 1. Open account |
Wealthsimple Trade, Questrade, or IBKR |
| 2. Choose ETFs |
All-in-one ETFs (VBAL, VGRO, XGRO, XEQT) or build portfolio |
| 3. Contribute regularly |
Monthly automated deposits |
| 4. Buy ETFs |
Commission-free on most platforms |
| 5. Rebalance annually |
1-2 hours/year (all-in-one ETFs rebalance automatically) |
| Platform |
Commission |
Currency Conversion |
Best For |
| Wealthsimple Trade |
$0 (CAD), 1.5% fx (US) |
Norbert’s Gambit not available |
Beginners, Canadian ETFs |
| Questrade |
$0 (stocks & ETFs, buy and sell) |
Norbert’s Gambit available |
Cost-conscious, US stocks |
| Interactive Brokers |
$0-$1/trade |
Best fx rates (0.002%) |
Advanced, large portfolios, US stocks |
| National Bank Direct |
$0 all trades |
Available |
Quebec-based, simple needs |
Sample DIY Portfolio
| ETF |
Allocation |
MER |
Description |
| XEQT |
100% |
0.20% |
All-in-one, 100% global equity |
| XGRO |
100% |
0.20% |
80/20 equity/bond |
| VBAL |
100% |
0.24% |
60/40 equity/bond |
All-in-one ETFs are the simplest DIY approach. One fund, globally diversified, automatic rebalancing inside the ETF.
Robo-Advisors
How They Work
| Step |
Details |
| 1. Answer risk questionnaire |
Online, takes 5-10 minutes |
| 2. Algorithm builds portfolio |
Based on your risk tolerance and goals |
| 3. Deposit money |
One-time or automatic recurring |
| 4. Automatic rebalancing |
Portfolio stays on target without your input |
| 5. Tax-loss harvesting |
Some robo-advisors do this automatically |
Best Robo-Advisors in Canada
| Robo-Advisor |
Management Fee |
Total Cost (incl. ETF MER) |
Min Investment |
Special Features |
| Wealthsimple Invest |
0.40-0.50% |
0.60-0.70% |
$1 |
SRI portfolios, roundups, best app |
| Questwealth |
0.20-0.25% |
0.35-0.45% |
$1,000 |
Lowest cost, SRI option |
| RBC InvestEase |
0.50% |
0.65-0.75% |
$100 |
Bank integration, familiar brand |
| BMO SmartFolio |
0.40-0.70% |
0.55-0.90% |
$1,000 |
BMO integration |
| CI Direct Investing |
0.35-0.60% |
0.50-0.80% |
$100 |
Formerly WealthBar |
| Justwealth |
0.40-0.50% |
0.55-0.70% |
$5,000 |
Target-date RESP portfolios |
Robo-Advisor Pros and Cons
| Pros |
Cons |
| Hands-off investing |
Higher cost than DIY (0.4-0.7% more) |
| Automatic rebalancing |
You don’t learn how to invest |
| Tax-loss harvesting (some) |
Limited customization |
| Low barrier to entry |
No financial planning (limited) |
| Better than mutual funds (cheaper) |
Still has fees that compound |
| Prevents emotional mistakes |
May not suit complex situations |
Financial Advisors
Types of Financial Advisors in Canada
| Type |
How They’re Paid |
Typical Cost |
Best For |
| Fee-only financial planner |
Flat fee for plan |
$2,000-$6,000 (one-time) |
Financial plan without product sales |
| Fee-based advisor (AUM) |
% of assets under management |
0.75-1.50%/year |
Ongoing management + planning |
| Commission-based (mutual funds) |
Embedded fund commissions |
2.0-2.5%/year (via MER) |
Avoid if possible (highest cost) |
| Fee-for-service planner |
Hourly rate |
$150-$350/hour |
Specific questions, one-time advice |
| Insurance-based advisor |
Insurance commissions |
Paid by insurance companies |
If you need insurance products |
| Private wealth manager (bank) |
AUM fee |
0.50-1.25% (on $500K+) |
High net worth, complex needs |
When You Need a Financial Advisor
| Situation |
Advisor Type |
Why |
| Retirement income planning |
Fee-only planner |
Optimize CPP, OAS, withdrawal order |
| Estate planning |
Fee-only planner + lawyer |
Minimize estate taxes, trusts |
| Business owner |
Fee-only planner + CPA |
Corporate structure, succession |
| Cross-border (US/Canada) |
Specialist cross-border planner |
Dual tax obligations |
| Sudden windfall ($500K+) |
Fee-only planner |
Avoid costly mistakes |
| Divorce financial settlement |
Certified Divorce Financial Analyst |
Equitable division |
| Simple TFSA/RRSP investing |
You don’t need one |
Use robo-advisor or DIY |
Decision Framework
By Portfolio Size
| Portfolio Size |
Best Approach |
Why |
| Under $10,000 |
DIY (all-in-one ETF) or robo-advisor |
Fees matter less at small amounts |
| $10,000-$100,000 |
DIY or robo-advisor |
Savings from DIY start to add up |
| $100,000-$500,000 |
DIY is best; robo-advisor is fine |
$700-$3,500/year saved vs advisor |
| $500,000-$1M |
DIY + fee-only planner |
$5,000-$12,500/year saved vs advisor |
| $1M+ |
DIY + fee-only planner (or private wealth) |
$10,000-$25,000+/year saved vs advisor |
By Investor Type
| Profile |
Best Approach |
Why |
| Complete beginner |
Robo-advisor |
Simple, automated, prevents mistakes |
| Wants to learn |
DIY with all-in-one ETF |
Simple enough, you learn by doing |
| Busy professional |
Robo-advisor or DIY (all-in-one ETF) |
Minimal time required |
| Financially complex (business, estate) |
Fee-only planner + DIY/robo |
Expert advice where needed, low cost elsewhere |
| Emotional investor |
Robo-advisor |
Removes temptation to panic sell |
| Cost-focused optimization |
DIY |
Savings compound significantly |
Hybrid Approach (Best of Both)
| Service |
Provider |
Cost |
| Day-to-day investing |
DIY (XEQT in TFSA/RRSP) |
0.20% MER |
| Financial plan (every 3-5 years) |
Fee-only planner |
$2,000-$5,000 |
| Tax optimization |
CPA |
$200-$600/year |
| Insurance review |
Insurance broker |
$0 (paid by insurer) |
| Total annual cost on $500K |
|
~$1,500-$3,000 |
| vs Financial advisor on $500K |
|
~$5,000-$12,500/year |
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