It’s possible that Questrade’s vast range of products and services has made the brand difficult to market to any one group. Questwealth Portfolios caters to first-time investors or those with limited experience, while the brokerage service is ideal for non-experts with some investing knowledge and confidence. Whatever the reason, if you’re not yet familiar with this financial services provider, you should be. Here’s the 411 on Questrade and how you can decide whether it’s a good fit for you.
What’s the backstory on Questrade?
In 1999, at the dawn of online stock trading, entrepreneur Edward Kholodenko co-founded Questrade with three partners. Based in Toronto, their aim was, and remains, to offer DIY investors a low-cost alternative to Canada’s large banks and brokerages. Weathering the dot-com crash that soon followed, Questrade emerged to become the country’s fastest growing online brokerage.
In 2014, the platform entered the robo-advisor market by adding pre-fab portfolios of low-fee investments to its product line for those who lack the skill or inclination to go the self-directed route. Today, Kholodenko (who immigrated to Canada from the Ukraine with his family when he was five) still heads up the company, which has $9 billion in assets under management and sees 50 thousand new accounts opened each year.
Who is its target market?
Because Questrade has offerings for self-directed investors (those who are comfortable choosing and buying their own stocks, bonds and other investment assets) as well as hands-off investors who prefer to leave those decisions to a team of experts, it is popular with newbie and seasoned investors alike. The common thread among clients is cost-consciousness, as Questrade’s investment fees* are among the lowest in Canada.
What can I do with my money at Questrade?
Questrade’s user-friendly platform allows DIY investors to open almost any type of investment account online, including tax-sheltered registered accounts (RRSPs, TFSAs, RESPs, LIRAs, RIFs, LIFs) and taxable non-registered accounts (such as margin accounts and foreign exchange market accounts). Once you have at least $1,000 in your account, you can start buying, selling and trading investments. These include stocks, bonds; exchange traded funds (ETFs), including all North American ETFs; mutual funds; GICs; options; initial public offerings (IPOs); and other equities such as precious metals.
If DIY is not your thing, Questrade has you covered with its robo-advisor, Questwealth Portfolios*. You still begin by setting up an account online, but instead of choosing your own investments, you’ll be asked a series of questions about your risk tolerance, investment goals and overall approach to money. Based on your answers, Questwealth’s algorithm will choose a portfolio for you—Aggressive, Growth, Balanced, Income or Conservative—which is made up of a diversified mix of low-fee ETFs. (If you’re into socially responsible investing (SRI), you can also get SRI versions of these Questwealth Portfolios, which support companies that prioritize environmental and social concerns, and have a positive record on human rights and corruption.)
The difference between each portfolio is the ratio between higher-risk investments, such as Canadian, US and international equity ETFs, and lower-risk fixed-income ETFs, such as bonds and GICs. An aggressive portfolio would be weighted toward riskier investments (which also offer the possibility of greater returns), while a conservative one will include more low-risk investments.
Unlike typical Canadian robo-advisors, which rely 100% on algorithms and automation to monitor and rebalance your portfolio when necessary, Questwealth has actual human experts who manage your portfolio for you, without the high fees that most portfolio managers charge for this service.