Robo-advisor introduces client tool to encourage financial planning

Toronto-based robo-advisor Wealthsimple Financial Inc. will be offering access to registered education savings plans (RESPs) once again with the launch of a new, fully online platform available both to consumers and financial advisors.

“We think it will be a really important strategic piece to our advisor platform [Wealthsimple for Advisors],” says Jason Goldlist, Wealthsimple’s general manager. “[RESPs] help connect them to the next generation, it’s a very feel good … talking point with the client.”

This launch is the second time Wealthsimple has offered RESPs to clients. When Wealthsimple first launched in 2014, it offered RESPs to clients through its then back-office provider, Virtual Brokers, a division of BBS Securities Inc. However, the robo-advisor soon stopped its support of RESPs because of the difficult, and at time confusing, account opening experience that went along with these vehicles.

“RESPs are extraordinarily confusing. They’re the most confusing, difficult and, typically, expensive account types offered in Canada — and that has to do with the unique benefit the government provides,” says Goldlist. “With that comes all sorts of scrutiny and paperwork that’s required to make that happen and that sort of experience is not the kind of experience we tout at Wealthsimple.”

To that end, Wealthsimple has created its own RESP account-opening process through Canadian ShareOwner Investment Inc. (ShareOwner) — a discount brokerage with back-office capabilities that Wealthsimple acquired in 2015.

“We developed a brand new RESP integration between ShareOwner and the government of Canada so there’s no legacy system,” says Goldlist. “It’s a brand new experience built on state of the art technology that there’s no comparable to in the market today.”

To open up an RESP account, clients follow the same online process as they would for any other Wealthsimple account. Namely, the investor fills out an online questionnaire about their personal information and risk tolerance. In addition to that basic information, the client would also provide the personal information of the account beneficiary. All necessary documents are filled out and signed electronically.

If there’s an instance of multiple beneficiaries, Wealthsimple is able to manage family plans. In such cases, clients are also able to control which beneficiary receives a contribution.

“You’ll be able to very finely control your contributions to your beneficiary and we track all your contributions to each of the beneficiaries,” says Goldlist.

As well, Wealthsimple clients in British Columbia and Saskatchewan will receive the provincial grants for RESPs as well as the federal grant. Wealthsimple is unable to support the provincial grant from Quebec at this point in time.

Management fees for Wealthsimple’s RESP accounts range from 0.4% to 0.5%. Wealthsimple does not charge administrative, trading, account transferring or rebalancing fees on the RESP accounts.

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