Fintech enters RRSP space with low-cost option

Fintech enters RRSP space with low-cost option

Fintech enters RRSP space with low-cost option Online wealth manager WealthBar.com has introduced a new full-service, low-cost group registered retirement savings plan.

“Companies that want to support their employees in saving for retirement” can purchase the RRSPs “for a fraction of the cost of traditional plans,” WealthBar stated in a release.

The plans also provide group members with a dedicated advisor, an individual financial plan and individually tailored investment advice, the company stated. The announcement marks the first time that a financial technology provider in Canada has offered a full-service, low-cost group plan.

Fees for WealthBar’s plans will cost less than 1%, compared to the industry standard of 2-3%, the company stated. The plans will also feature more transparency, automatic rebalancing and better investments, WealthBar said.

“At WealthBar, we often find ourselves advising people who come to us with traditional group RRSP plans,” said WealthBar co-founder and CEO Tea Nicola. “This has given us a lot of insight. Unfortunately, it’s a familiar story: offerings are limited, while fees are high. It’s just not necessary.”
According to WealthBar, most group RRSPs are offered by large insurance companies and have a narrow choice of products, often coupled with little to no individual advice.

“HR professionals get a lot of financial questions from their employees that they cannot answer,” Nicola said. “Employees often select the wrong portfolio for their circumstances, or just don’t participate at all. By having a direct line to a dedicated advisor, HR professionals can confidently send their employees to WealthBar for that advice. This increases participation and ensures they’re invested in a plan that’s tailored for them.”

The WealthBar RRSP also automatically becomes a low-fee personal plan when an employee leaves a company or retires.

“We’re looking to truly transform the group benefits industry,” Nicola said. “If employers can have a group RRSP at a fraction of the traditional cost, with a higher level of service, transparency and better convenience, it should be a no-brainer to switch.”


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2 Comments
  • John Wallace 2016-07-08 11:39:51 AM
    Sun Life offers group RRSPs, DCPPs and DPSPs which in many cases charge much less than 1% in fees PLUS free consultations (and financial planning) with a licenced Financial Advisor.
    So, I'm not sure what all the fuss is about.
    Post a reply
  • CG 2016-07-08 2:28:19 PM
    Most insurance companies provide this level of service however the fee structure is usually based on cash flow or volume of assets so maybe this is the catalyst position. Otherwise it's left to the servicing advisor to do the heavy lifting when it comes to service with support from the respective carrier so we all need to do our part 100 percent. The race to the bottom is not the answer.
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