Questrade enters robo-advisor fray

Questrade enters robo-advisor fray

Questrade enters robo-advisor fray The discount broker, known best for its customer service, is bringing wealth management to the masses. It announced Monday that it was launching Portfolio IQ, a customized investment portfolio created entirely online.

CEO Edward Kholodenko, who recently was named Ernst & Young’s Entrepreneur of the Year, stated in the announcement, “With the typical wealth management model, you need $250 to 500 thousand of investable assets – just to start. We dramatically reduced that – a dollar to open an account and $2000 to get a customized portfolio. This is an entry point just about anyone can afford. It's the democratization of investing."  

It sounds like the greatest thing since sliced bread. But is it really?

Upon closer review it’s clear that Questrade’s pricing isn’t nearly as attractive as their website would lead do-it-yourself investors to believe. For example, if an investor has a $50,000 portfolio, he or she would pay $350 annually (0.70%) for the Portfolio IQ service itself along with the MERs of the selected ETFs. Its competitors providing automated investment advice charge on average $250 annually for the same or similar services.

Does Questrade provide enough extras to justify the additional $100 in fees? That’s still to be determined.

However, Questrade maintains that clients will be able to speak to its portfolio managers over the phone or by setting up an appointment in person therefore making it more full-service investment advisory rather than computerized robo-advisor. 

Ultimately, its Portfolio IQ service is a hybrid of the two. While this might be attractive to certain investors it’s doubtful those with smaller portfolios will find much use for Questrade’s newest innovation.

Democratization of investing it’s not. 
  • Will Ashworth 2014-11-18 4:04:06 PM
    We stand corrected folks.

    Dan Poole, co-founder of Oakville-based Invisor Investment Management, let us know today that his firm is also in the robo-advisor business. You can learn more at
    Post a reply
  • John – Team Questrade 2014-11-19 1:01:26 PM
    Hi Will,

    Great article as you’ve touched on many important points. I just wanted to make sure that when looking at other robo-advisors, we’re comparing apples to apples.

    A few other services with lower fees allow clients to choose from pre-determined portfolios. However, Portfolio IQ is a managed, discretionary account. We assess each individual’s risk tolerance and suitability before creating a personalized portfolio. We also notify our clients whenever there are changes in the weighting of the portfolio based on market view.

    It’s also important to note that performance history is a factor you’ll want to consider before opening an account. We have an eight-year track record for our model portfolios that are managed by a sub-advisor who has been managing ETF portfolios for nine years.

    Lastly, we’re democratizing investing for all Canadians by offering managed investing for as low as a $2,000 initial investment. Many of our competitors offer much higher minimums to get started and their services are restricted to residents of certain provinces.

    I’d be happy to answer any questions about Portfolio IQ.

    John – Team Questrade,
    Questrade, Inc.
    Post a reply
  • Will Ashworth 2014-11-19 3:05:48 PM
    Hi John,

    I want to thank you for your comments.

    There's no doubt that Questrade has earned its rightful place in the investment industry.

    Portfolio IQ definitely serves a purpose. I'm just not sure it makes sense for beginner investors.

    If you'd like to write a guest blog we'd be glad to give you a forum to further explain your company's views on the subject.

    Will Ashworth
    Post a reply