Andrew Goldman has been writing for over 20 years and investing for the past 10 years. He currently writes about personal finance and investing for Wealthsimple. Andrew's past work has been published in The New York Times Magazine, Bloomberg Businessweek, New York Magazine and Wired. Television appearances include NBC's Today show as well as Fox News. Andrew holds a Bachelor of Arts (English) from the University of Texas. He and his wife Robin live in Westport, Connecticut with their two boys and a Bedlington terrier. In his spare time, he hosts “The Originals" podcast.
At one time, investment advice was a perk for only the wealthy. New investors with small savings were stuck using traditional mutual funds, direct investing, or expensive (and risky) online trading platforms. But after the 2008 financial crisis, new players emerged in the online investment space: technology-driven investment advisors and managers called robo-advisors.
Betterment was one of the first robo-advisors to emerge, though many have followed since. These kinds of services make professional portfolio management available to everyone, often with simple platforms, low costs, and low (or no) minimum investments. You don’t need a substantial bank account or investment experience to use these services.
Is Betterment available in Canada? In this article, we’ll unpack Betterment’s eligibility requirements and offer a solid alternative.Get a $50 cash bonus when you sign up to Wealthsimple Invest. Start with as little as a dollar and we’ll build you a personalized investment portfolio to grow your wealth.
What is Betterment?
Betterment is a New York City-based tech startup that launched in 2010. It was founded by business school grad Jon Stein and lawyer Eli Broverman, who met at a friendly poker game. Today, it’s one of the largest American robo-advisors by assets under management (or AUM).
Betterment is a FINRA-approved broker dealer. In other words, it’s legit. As of 2021, this robo-advisor reported managing more than $26.7 billion in assets under management for approximately 615,000 clients. Betterment is not a traditional trading platform. You can not purchase your own stocks, bonds, EFTs, mutual funds, or other securities.
What’s a robo-advisor? A robo-advisor is a digital platform that allows for money to be invested on auto-pilot by a computer algorithm, rather than actively managed by humans. Robo-advisors normally invest money in broad portions of the stock market rather than an individual choosing the stocks to buy and sell by themselves.
The general model of robo-advisors is to keep fees low through passive investment, that is, investing exclusively in low-fee ETFs that seek to mirror the returns of a sector or index, for example the S&P 500, an index of the 500 most highly valued companies listed on American stock exchanges.
Is Betterment available in Canada?
Betterment is not available in Canada. On its website, the company explains that “Betterment currently only operates in the United States, and for regulatory reasons cannot accept customers residing outside the country. This includes U.S. citizens residing and/or working abroad.” At this time, the company has no plans to expand into Canada.
An alternative robo-advisor in Canada
Just because Betterment isn’t currently available in Canada doesn’t mean there isn’t a robo-advisor that offers nearly all of the same services as Betterment, and even some that Betterment doesn’t. Some of the best robo-advisors in Canada include the following:
CI Direct Investing
Our platform, Wealthsimple, is considered one of the best robo-advisors because it provides smart and simple investing without the high fees and account minimums associated with traditional investment management. Wealthsimple was founded in 2014 by Michael Katchen, a longtime market investor who had long helped friends and colleagues to invest wisely in low-fee, passive ETFs.
Wealthsimple is anything but a fly-by-night startup. Based out of Toronto, Wealthsimple is Canada’s largest automated investing service. It’s received $265 million in investment from some of the world’s largest financial institutions in Canada and Europe. It’s backed by a team of world-class technology and financial experts and the best technology talent. Its Investment Advisory Committee is full of recognized thought leaders in the investment community.
As of June 2022, Wealthsimple boasted more than two million clients and $15 billion of assets under management. Wealthsimple’s brokerage, Wealthsimple Investments Inc., which handles all client trades, is a member of the Canadian Investor Protection Fund (CIPF), a program that insures all accounts up to one million dollars against member firms’ bankruptcy.
Furthermore, Wealthsimple offers some powerful products you won’t find with other robo-advisors, such as:
Wealthsimple Trade, a commission-free stock trading app
Wealthsimple Tax, an easy, accurate, and free tax filing platform
Wealthsimple Crypto, Canada’s first ever regulated crypto platform
Roundup, a way for clients to link a credit and/or debit account to their Wealthsimple account and invest any change left when a transaction amount is rounded up to the nearest dollar
As a Wealthsimple client, you have access to a range of registered and non-registered accounts. Registered accounts include TFSA, RRSP, Spousal RRSP, LIRA, and RESP. Non-registered options include accounts for personal use, savings/joint savings, crypto, and business.
Looking for a great place to invest? Consider Wealthsimple. All Wealthsimple clients—regardless of their account balances—receive state-of-the-art technology, unlimited human support all for a remarkably reasonable management fee and no minimum investment. Even if you’re not quite ready to invest, anyone with five spare minutes can go to Wealthsimple’s two-time Webby-winning website and sign up for a Wealthsimple account.
Frequently Asked Questions
Betterment is not a bank. You need a checking account with any U.S. bank account to use Betterment. Customers must be at least 18 years of age and have a permanent U.S. address and a U.S. social security number or an ITIN.
Betterment earns money from its annual fees: 0.25% for its Digital Plan and 0.4% for its Premium Plan. For example, if you are a Premium Plan user with $5,000 invested, Betterment would cost $12.50 per year.
For checking accounts, Betterment receives a portion of interchange fees from merchants when you use your debit card and a small portion of the net interest margin from deposits in your account. For its Cash Reserve program, Betterment receives compensation from its affiliated banks. The robo-advisor also makes money by charging for investing advice.
Trade stocks commission-freeStart trading