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.
So you’re curious about whether T. Rowe Price operates in Canada.
It’s not exactly clear cut. The answer is unfortunately, no, T. Rowe Price’s services are not available for individual Canadian investors, but yes, for those who use the company’s platform through another institution. Confused yet? Sorry, but we’ll clarify everything below.
What is T. Rowe Price and is it available in Canada.
T. Rowe Price is a Baltimore-based investment and mutual fund firm. The company was, in fact, named for its founder, a gentleman named Thomas Rowe Price, Jr., who, according to his 1983 New York Times obituary was one of Baltimore’s favorite sons, “ to the financial world what H. L. Mencken was to literature.” Price, who’d retired from the firm in 1971, became famous for championing what became known as the “growth stock” theory of investing. Price’s technique, according to the Times “was to find companies for which he could project growth in both earnings and dividends over a period of years and to make long-term investments during the early stages of this growth.” Growth stocks and mutual funds that assemble them are super common now, but at the time it was a revolutionary concept.
T. Rowe Price is primarily known now as both an issuer of mutual funds and one-stop financial planner for individual investors. So, you wouldn’t necessarily need to be a client of T. Rowe Price’s advisory services to buy their mutual funds. They specialize in “no load” mutual funds. For now, it’s enough to know that “loads” are fees that mutual fund holders pay, and are to be avoided whenever possible, but should you want a deeper dive on that topic, take a gander at this article, How To Invest in Mutual Funds. T. Rowe price also can act as a brokerage, allowing those to use their website to trade stocks, mutual funds and ETFs, for fees that generally range from $9.95 to 19.95 per trade.
As a Canadian, at this time you cannot go onto the T. Rowe Price website and sign up for either their advisory or brokerage services directly. Instead, you may be able to use the T. Rowe Price platform if you invest through their institutional clients, which, as of 2019, are TD Canada Trust and IG Wealth Management. As the company sets out quite technically on its site, “Our investment management services are only available for use by Accredited Investors as defined under National Instrument 45-106 in those provinces where we are able to provide such services.”
A word of caution for all investors. When investing with any money manager, make sure you understand the accumulated fees that you will be assessed. They add up fast. Because they often look so minuscule, they’re deceptively destructive. Small fees make a huge difference; one Toronto-based investment advisor showed that a fee of just 2% could decrease investment gainsby half over the course of 25 years. And studies regularly demonstrate that fees are directly predictive of returns in a very simple way; the higher the fees, the lower the returns.
An alternative to T. Rowe price for Canadian investors
Given that you won’t be able to open a T. Rowe Price account as a Canadian individual, have you considered Wealthsimple? Wealthsimple is what’s commonly known as a “robo-advisor,” meaning that when you invest with the company, your money isn’t actively managed by humans but rather by a computer algorithm. You may want to read more about robo-advisors, but “robots” watching over your life savings is not nearly as frightening as it might sound. The general model of robos is to keep fees low through passive investment, that is, investing exclusively in low-fee ETFs that, rather than attempting to beat the market, as most mutual funds seek to do, they instead 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. Passive investing has become increasingly popular in light of tons of studies that demonstrate that professionals paid to pick stocks fail to outperform the market as a whole over the long term. In fact, perhaps the greatest stock picker of all time, Warren Buffett, has encouraged his heirs to invest the lion’s share of their inheritance in low-fee, highly diversified stock funds.
Unlike many other robos, Wealthsimple offers unlimited human support for all clients, which really means everyone, since Wealthsimple has no account minimum. Wealthsimple offers some cool products you won’t find with other robo-advisors. Clients who love the idea of investing a little at a time can take advantage of Wealthsimple’s “roundup” feature on its app that allows 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. Those seeking to open a brokerage account to trade stocks and ETFs can try Wealthsimple Trade, a trading app, which, unlike T. Rowe Price, is commission-free, meaning you pay absolutely no fees to trade.
Wealthsimple is anything but a fly-by-night startup; it’s Canada’s largest automated investing service. It’s received $265 million in investmentfrom some of the world’s largest financial institutions in Canada and Europe. As of May 2019, Wealthsimple boasted more than 150,000 clients and $4.5 billion of assets under management. Wealthsimple’s brokerage Canadian ShareOwner Investments Inc., which handles all client trades, is a member of the Canadian Investor Protection Fund (CIPF). CIPF is a program that insures all accounts up to one million dollars against member firms bankruptcy.
Even if you’re not quite ready to invest, anyone with five spare minutes can go to our two-time Webby-winning website and sign up for a Wealthsimple account.
Looking for the best investing service and no-fee brokerage in all of Canada? Take Wealthsimple for spin. All Wealthsimple clients, regardless of their account balances, receive state-of-the-art technology, unlimited human support all for a remarkably reasonable management fee.