In this Justwealth RESP review, you’ll learn about one of the best robo-advisors for RESP in Canada.
RESPs are a smart way for parents to start saving for their kids’ post-secondary education. From the tax-free investment growth to the government grants parents receive on their RESP contributions, there are many benefits to using RESPs.
Parents can start investing the self-directed route or choose a robo-advisor platform, which will provide automated investing for their child’s future education.
For parents looking to invest in an RESP account through the robo-advisory route, there are several options to choose from.
And Justwealth is one of the very best options available. This post covers its offerings, benefits, fees and how to get started.
Justwealth is an independent online portfolio manager that was founded in 2015.
It provides a full suite of more than 70 investment portfolios built using ETFs from some of the largest ETF providers – way more than the offerings at other Canadian robo-advisors.
Though it is a robo-advisor, Justwealth also offers financial planning and personalized financial counseling to all clients irrespective of their account balance.
All the investment accounts offered by Justwealth compare favourably with the ones at other robo-advisors.
But Justwealth offers a superior RESP account than the ones at most of the other best RESP plan providers.
Here’s one of the reasons why:
Justwealth is currently the only RESP provider and robo-advisor that offers target date portfolios for RESP investing.
We’ll cover how the target date portfolios work in the next section.
Features of Justwealth RESP
Here are some of features and benefits of opening an RESP with Justwealth:
- Keep more of your investment with low management fees
- No minimum account opening balance
- Hands-off investing and automatic rebalancing with target date portfolios
- Competitive promotions for new clients
And if you decide to transfer your RESP or any other investment account from another financial institution, Justwealth will reimburse your transfer fees up to $150 for transfers of $25,000 and above.
Justwealth RESP Target Date Funds
So how does the RESP Target Date portfolios at Justwealth work?
The target date portfolios investments are designed to be more aggressive in the child’s younger years when school is still far off, then automatically change to more conservative investments as the child gets older.
That is, each child is assigned a portfolio with a maturity date that coincides with the year they are projected to go to school.
All the investing decisions like rebalancing and choosing the ideal asset mix are handled by Justwealth all through the “term” of the investment – simply contribute to the account regularly and let Justwealth handle the rest.
Justwealth is the only robo-advisor in Canada to offer these RESP target date portfolios.
Why is this such a big deal?
With other RESP investing options, you start by choosing an asset allocation that considers your kids’ age vis-à-vis when they’ll start post-secondary school and also your own risk appetite.
Next, you would need to adjust the equity/fixed income composition of the portfolio over time to ensure the safety of the funds as the time it’ll be needed draws close.
And if you go the self-directed route, there’s the added step of researching and picking the right investments for your portfolio.
This may sound simple but can get pretty difficult and complicated in real life.
Many parents already struggle with picking the right asset mix to start with, so making the decision on when to rebalance and reduce the risk of their RESP portfolio is an unwelcome and extra stress.
Justwealth eliminates that on-going portfolio management to deliver a truly automated and hands-off RESP portfolio throughout the “lifetime” of the portfolio.
Justwealth RESP Fees
The pricing for Justwealth starts at 0.50% of the first $500,000 in ALL your investment accounts then drops to 0.40%.
With the RESP lifetime contribution limit at $50,000, most RESP portfolios would fall within the first bracket and pay 0.50%. But Justwealth RESPs are subject to be a minimum fee of $2.50 per month.
Compared to the high fees that you would pay to invest in the average mutual fund, the Justwealth RESP fees is a big bargain.
In addition to the management fees that Justwealth charges, there is the additional management expense ratio (MER) for the underlying ETFs used to build the portfolios.
You can expect this to add an extra 0.20-0.25% to the total cost of the portfolio.
All in, you’re looking at about 0.70-0.75% annual fees on a completely hands-off portfolio that is automatically rebalanced and professional managed for your kids’ post-secondary education.
Who is Justwealth RESP For?
Whether you want to go the self-directed or robo-advisor route, there are several RESP providers in Canada.
But Justwealth RESP stands out with its Target Date portfolios that lets any parent start investing with little money and on autopilot till it’s time for their kids to start college.
And the best part is they get all these benefits without the high investment costs at the big banks.
So Justwealth RESP is for you if you:
- want to start saving with little sums
- never want to worry about the right asset allocation to pick
- want personalized financial planning
Justwealth RESP vs Peers
Next in this Justwealth RESP review, we’ll look at how the robo-advisor compares to some of its other competitors.
Justwealth vs Wealthsimple RESP
Wealthsimple is arguably the most popular robo-advisor in Canada with more than $10 billion in asset under management and over 1.5 million users across its different products.
Its managed investment account offering is named Wealthsimple Invest. It supports registered accounts including RESP and non-registered accounts.
Clients can choose from one of its 10 portfolios with varying risk levels from conservative to aggressive.
Wealthsimple Invest management fees is the same with Justwealth at 0.50% for assets below $100,000. But the fees drop to 0.40% when you deposits exceed $100k.
Another similarity between Wealthsimple and Justwealth is that there are no minimum account balances. So you can start investing with little money with both of them.
Check this Wealthsimple RESP Review to learn more about its RESP offerings.
Justwealth vs Questrade RESP
Questrade is one of Canada’s most popular online brokerages. It’s been operating in Canada for more than 21 years and now has more than $25 billion in assets under management.
Its robo-advisory service is called Questwealth Portfolios, an actively managed, globally diversified set of portfolios.
Questrade has a minimum account opening balance of $1,000 but there are none at Justwealth.
But the management fees at Questrade are only half of the ones at Justwealth. With Questrade, accounts with assets below $100,000 pay 0.25% per annum and 0.20% for higher balances.
With the automatic portfolio de-risking that you get with a Justwealth RESP Target Date Portfolios, the higher fee is definitely worth it.
Bottom line is: If you want to start saving for your kid’s education with little money and don’t want to worry about the right asset allocation as they grow, then Justwealth is perfect for you.
Check this Questrade RESP Review to learn more about its RESP offerings.
Here are some of the promotions at Justwealth:
Justwealth Cash Bonus Offer: New clients can get a cash bonus of between $50 and $500 depending on their account asset value. They can get $50 for assets below $25,000, all the way to $500 for assets over $100,000.
Justwealth Transfer Rebate: Up to $150 fee rebate for transfers of $25,000 rom other financial institutions.
Depending on when you check, Justwealth offers different promotions all through the year. For example, there’s an on-going promotion for students and recent graduates.
With the promotion, the minimum investment is reduced to $500 from $5,000 and $0 management fees for the 6 months.
Yes, RESPs are one of the several investment account types available to Justwealth clients.
The minimum opening balance at Justwealth is $5,000. However, there are no minimums for RESP accounts.
The management fees start at 0.50% on the first $500,000 of your accounts, then drops to 0.40% afterwards. There’s a minimum fee of $2.50/month for RESPs
In addition to the management fees you’ll pay to Justwealth, the underlying ETFs also have their own MERs. You can expect to pay between 0.20-0.25% as MER for the ETFs Justwealth invests in.
Justwealth RESP Review – Final Thoughts
Overall, this Justwealth RESP review is very positive.
Parents looking to start saving for this kids’ post-secondary education costs should look no further than Justwealth.
With its target date portfolios, affordable fees and tailor-made financial planning, you have everything you need to start investing irrespective of your investment knowledge.
Go here to sign-up for an RESP at Justwealth.
If you liked this Justwealth RESP review, also check the other RESP posts in the link below.
- Best Robo-advisors for RESP in Canada
- Are RESP Contributions Tax Deductible?
- How Much Should I Put In My RESP Per Month?
Justwealth RESP Review
Justwealth RESP is one of the best managed RESP for parents looking to build an automated RESP portfolio for their kids’ education.