Understanding Robo-Advisors – Pros, Cons & Dilemmas

About This Episode

With the number of easily accessible robo-advisors on the rise, there has never been an easier time for Canadians to start saving and investing.

With as little as $100 per month, you can build diversified portfolios at a relatively low cost which is a very empowering option. At the same time, despite the numerous benefits, there are potential downsides and pitfalls that investors need to be aware of when deciding where to invest.

To explore this topic, we’re joined by our colleague, Lawrence Greenberg, who is part of our next-generation advisory team. Lawrence is an Associate at Tulett, Matthews & Associates and over the course of his studies and multiple co-op internships, Lawrence discovered his passion lies in working alongside private clients and helping people make sense of their complex financial lives.

On this episode, Marcelo, Lawrence and Keith discuss how robo-advisors work, the opportunities that robo-advisors have created for Canadian investors, the advantages and risks of using a robo-advisor, and so much more!

Thank you for listening!

Key Topics:

• Lawrence’s background and journey into wealth management (1:38)
• What is a robo-advisor? (4:00)
• Advantages of using a robo-advisor (6:04)
• Why robo-advisors create more opportunities for Canadian investors (7:19)
• Drawbacks of investing with a robo-advisor (8:34)
• Understanding the limits of robo-advisors (10:20)
• How Lawrence helps our young investors to get started with Wealthsimple (12:13)
• Young investors’ experiences using Wealthsimple (13:12)
• Comparing Wealthsimple and Tangerine (14:55
• The value of empathy in investing (16:05)
• Feedback from young investors about using robo-advisors (17:01)
• How robo-advisors are democratizing access to investing (19:01)
• The three doors of Wealthsimple (21:18)
• Why robo-advisor platforms can end up distracting investors (22:34)
• The slippery slope of the core and explore portfolio strategy (24:11)
• Creating market value at the expense of the end-user (25:36)
• The negative effect of the gamification of investing (26:54)
• Our key takeaways for Canadian investors (28:40)