So, you’ve decided that easy, hands-off index investing using a robo advisor such as Wealthsimple or BMO Smartfolio is the best fit for you.
Figuring out which robo-advisor has the exact options you want – at the right price – can seem overwhelming.
We put two of the best robo-advisors in Canada, Wealthsimple Invest and BMO Smartfolio, side-by-side so you can see the differences for yourself. Then we break the data down and show you what it actually means.
Wealthsimple Invest vs. BMO Smartfolio: Quick Comparison Chart
BMO ETFs only
13 ETFs (10 standard, 2 SRI, 1 Halal), a variety of top providers.
5 model portfolios
A choice of 9 portfolios (3 standard, 3 SRI, 3 Halal)
RRSP, TFSA, RRIF, RESP, unregistered
RRSP, Spousal RRSP, TFSA, LIRA, RRIF, LIF, RESP, unregistered
4-9.6% annualized growth
4-12% annualized growth
CIPF protection up to $1 million + Bank-level encryption
CIPF protection up to $1 million + Bank-level encryption
Easy to access (human) advisors
Easy to access (human) advisors
0.5% cashback for every dollar you invest
$50 sign-up bonus
Wealthsimple vs. BMO: Similar Service, (Very) Different Institutions
BMO was founded in 1817 and is Canada’s first bank. It has over $600 billion in assets under management. BMO launched Smartfolio in 2016. It blazed a trail as the first robo-advisor to be launched by one of the big banks (to date there’s only one more, RBC Investease, which we featured in our Wealthsimple vs RBC comparison).
Wealthsimple is a Fintech company that was founded in 2014 with its robo-advisor service, Wealthsimple Invest, as its flagship product. It has since branched out into DIY investing with Wealthsimple Trade and cryptocurrency investing with Wealthsimple Crypto.
Even though it’s much newer, Wealthsimple still has over 1.5 million customers and over $60 billion in assets under management.
BMO prefers the term “online portfolio management” over “robo-advisor” because they focus heavily on human interaction. Their portfolios are actively managed by a team of Portfolio Managers and rely a bit less on computer algorithms than their competition.
This means that BMO isn’t exactly a “robo-advisor” – but it’s passive (for you) and online, and frankly, this is kind of like comparing a Cortland to a Macintosh.
They both make a mean apple pie.
Wealthsimple vs. BMO: Security
Both Wealthsimple and BMO Smartfolio are legit, regulated robo-advisors. Your accounts are held by custodial brokers which are members of the Canada Investor Protection Fund (CIPF) and regulated by the Investment Industry Regulatory Organization of Canada (IIROC).
Both take data security seriously. They use bank-level encryption and firewalls at every level. You can trust each company to protect your information as well as your money.
Wealthsimple vs. BMO: Annual Fees
BMO’s fee structure is more complicated than Wealthsimple’s. They charge according to the following tiers:
- 0.7% for first 100K
- 0.6% for next 100K
- 0.5% for next 250K
- 0.4% for over 500K
But it’s even more complicated because their fee structure is cumulative.
For example, if you have $250,000 to invest, your total fees look like this:
$100,000 x 0.7% = $700 + $100,000 x 0.6% = $600 + $50,000 x 0.5% = $250
$700 + $600 + $250 = $1,550 to manage that $250,000.
Meanwhile, Wealthsimple charges a straight percentage of the account (0.5% for accounts under $100,000 or 0.4% for larger accounts). This sample $250,000 account would be charged a flat 0.4% fee.
$250,000 x 0.4% = $1,000. That’s a steep difference!
BMO is quick to point out that their fees are lower than a typical (1.75%) traditional investing fee – and that’s true, at 1.75% you’d be paying $4,375. But it’s still 50% more than you’d pay with Wealthsimple Invest.
Wealthsimple vs. BMO: MER
Any ETF has a management expense ratio – a management fee that is charged behind the scenes and is expressed as a percentage of the total investment. MERs can vary widely – and in the case of Wealthsimple Invest and BMO Smartfolio, they do!
Wealthsimple’s standard ETFs have an MER of 0.12-0.15%, which is extremely low compared to industry standards. The MERs for their socially responsible investment (SRI) ETFs range from 0.21-0.23%, while the MERs for their Halal ETFs range from 0.25-0.5%.
BMO’s MERs sit between 0.2% and 0.35% – about double Wealthsimple’s standard ETF MERs.
Wealthsimple vs BMO: Additional Fees
Wealthsimple Invest doesn’t charge transfer fees or withdrawal fees. In fact, if you transfer over $5,000 in investments to Wealthsimple, they’ll reimburse you for the incoming transfer fee. They do charge a 0.2% foreign exchange fee, but that’s really it.
Meanwhile, BMO charges a host of additional fees including:
- Transfer-out of a Non-Registered or Registered Account (Full and partial) ($135)
- Partial withdrawal of a Registered Account (excluding TFSA and RRIF accounts) ($25)
- Full Deregistration of a Registered Account (excluding TFSA and RRIF accounts) ($100)
- Cheque requests ($10)
- Paper statement requests ($5)
- Foreign Currency Conversions (1.5%)
We’re not fans of fees for every little thing, so we consider this extensive menu of charges to be a point against BMO.
But we get it – BMO is a traditional bank, and this is what (many) banks do.
Wealthsimple vs. BMO: ETF Selection
Bank of Montreal is an ETF provider, so it’s not a surprise that their Smartfolio service builds its portfolios out of BMO ETFs. They’re recognized as one of the top ETF providers, so this isn’t a terrible thing.
However, we question the tactic of limiting portfolios to a single ETF provider. There are many excellent ETFs available from other providers, including many of the Best Canadian All-in-One ETFs and Best Dividend ETFs in Canada.
A typical portfolio from Wealthsimple includes ETFs from Vanguard, iShares, and BMO, which gives them a much wider field of candidates to choose from. We’re not sure if this explains why BMO doesn’t offer socially responsible investment portfolio options…but we do think it’s important to point out that they don’t.
Wealthsimple has SRI options, but if you prefer a big bank experience, check out RBC Investease, which offers them as well.
Wealthsimple vs. BMO: Portfolio Options
BMO offers 5 basic portfolio templates from Capital Preservation (lowest risk) to Equity Growth (most aggressive). Smartfolio portfolios are managed by a team of Portfolio Managers and Credited Financial Analysts. They rigorously vet any new ETFs, and they monitor each portfolio daily. That’s a lot more hands-on attention than Wealthsimple or any of the pure robo-advisors give you.
Wealthsimple Invest has 3 basic portfolio templates: Conservative, Balanced, and Growth for their standard, SRI, and Halal portfolios. Within those 3 main types of portfolios, they adjust asset allocation based on a risk-tolerance scale of 1-10. Wealthsimple does have Portfolio Managers on staff, but the impression we get from their marketing is that the algorithms handle a certain amount of the day-to-day details.
We’re not saying that as a knock against Wealthsimple, for the record. They’re our most recommended robo-advisor, so clearly, we think they’re doing an excellent job. But if you like the idea of having professional hands on your investments more often, BMO may be the better fit for you.
Wealthsimple vs BMO: Account Selection
Both Wealthsimple Invest and BMO Smartfolio offer the following account options:
But Wealthsimple also offers spousal RRSPs, LIRA, and LIF accounts.
Wealthsimple vs. BMO: Performance
Annualized returns are a problematic metric for picking a robo-advisor. Markets change constantly, and differences in performance generally have nothing useful to reveal about the quality of the platform.
However, if you’re interested in BMO Smartfolio’s performance, they put their numbers front and centre on the pages for each portfolio.
Wealthsimple shares our opinion of the effectiveness of performance tracking – but the numbers are there if you dig for them. BMO’s returns range from 4% to 9.6% returns while Wealthsimple ranges from 4% to 12% (again, be warned: this means next to nothing out of context).
The best thing you can do when you’re picking a robo-advisor is pay less attention to the annual returns and more attention to the features and services. Pick the one that works best for you, invest your money, and leave it alone. It’ll all even out over time.
Wealthsimple vs. BMO: Sign-up
Signing up for both Wealthsimple Invest and BMO Smartfolio is easy:
- You answer some questions to determine your investment goals, timeline, and risk tolerance
- You enter some basic personal information
- You fund your account.
If you want to add regularly to your account balance, both Wealthsimple Invest and BMO Smartfolio allow you to set up recurring auto-deposits.
Wealthsimple vs. BMO: Minimum Balance
Wealthsimple allows you to begin investing with as little as $1. BMO Smartfolio requires a minimum balance of $1,000.
This isn’t uncommon – other robo-advisors like Nest Wealth and ModernAdvisor have the same requirement. But it’s always nice when a company like Wealthsimple makes investing accessible to everyone, regardless of whether they have $1,000 in their account.
Wealthsimple vs. BMO: Perks
Part of Wealthsimple’s tiered pricing is tiered perks. Investors with over $100,000 in assets receive not only a discount but also features such as personalized financial planning and tax-loss harvesting. Investors with over $500,000 receive even more perks, including a personalized financial plan and 50% off health insurance for residents of Ontario.
BMO automatically has a certain prestige attached to the name… but they don’t offer any concrete perks to go with it.
You know how we feel about perks (we’re for them—unless they’re acting as a substitute for a quality robo-advising service).
Wealthsimple vs. BMO: Available Promotions
Wealthsimple Invest is offering our readers a welcome bonus: $50 cash if you open an account and invest $500.
Wealthsimple vs. BMO: Mobile App and Website
BMO Smartfolio doesn’t have a standalone app, but it does have a streamlined and intuitive online platform. It gives you all the information you need, from a bird’s eye view to details of one specific holding.
BMO customers can add their investment accounts to their BMO Online banking summary, which will let them see all their accounts on one browser window.
Wealthsimple Invest has its own app, which is also streamlined and easy to navigate. You can view your asset allocation, monitor your performance, and contact Wealthsimple’s investment team.
While both platforms are well-designed and intuitive, we do give extra props to Wealthsimple for adding a mobile app to an excellent browser-based platform.
Wealthsimple vs. BMO: Customer Service
Wealthsimple has a team of Portfolio Managers and assistants available by phone, email, app, or Skype during business hours every day. Likewise, BMO has a team of Smartfolio Advisors available by chat, phone, or email.
Both companies dedicate teams of real people to making sure you get the help you need. And that’s, frankly, priceless (although paying less is always good!).
Wealthsimple or BMO? Frequently Asked Questions
Wealthsimple vs. BMO: The Verdict
The fact is that Wealthsimple Invest and BMO Smartfolio are two of the top robo-advisors in Canada. They’re safe, trustworthy, and knowledgeable.
Both companies offer top-tier ETF investments, selected and managed by experts. BMO Smartfolio offers more hands-on management while Wealthsimple Invest has more selection and lower fees.
New investors may find it easier to jump into passive investing with a trusted name like BMO. And that’s fine – it’s a great service. We just believe that Wealthsimple has an equally good, or better, service for less money.
I've Completed My Million Dollar Journey. Let Me Guide You Through Yours!
Sign up below to get a copy of our free eBook: Can I Retire Yet?