Hello, and thank you so much for joining me for another video. For this video I'm
very excited to share it with you because I'm gonna walk you through,
number one, what it looks like and what it means to invest with a robo-advisor,
but I'm gonna specifically walk you through how to invest with RBC's new
robo-advisor called RBC InvestEase. So, what that actually means is I'm gonna
kind of walk you through their investor questionnaire, where it kind of takes a
bunch of information from you and then determines what your ideal asset mix is
between, you know, equities and fixed income. And then I'm actually gonna show
you what the dashboard looks like because I actually invested some of my
money with them. So, I'm gonna show you once you invest your money, what it
actually looks like on the inside. So, super excited to share this video with
you, so make sure to stick around.
So, first thing I do is go to the website, rbcinvestease.com, and if you scroll
down there's this button that says "Get Started". And as you can see it's
forwarded us to this webpage that basically is their investor profile
questionnaire. Every single kind of digital investing platform robo-advisor
has something like this in it. It will basically ask you a series of questions
in order to kind of determine who you are, what you want, and what is a good
portfolio for you based off a number of factors including your age, your time
horizon, your goals, your risk tolerance, all that kind of stuff. So, this is
pretty common. So, let's go through it and let's see whether it kind of spits out
the portfolio that I kind of perceived that I should probably get. I'm already
investing myself so I kind of know what portfolio is right for me so let's see
if it also has the same kind of answer. So, first things first, what would you
like to invest for? I am 32 and I want to invest for my retirement.
Which statement best describes your investing knowledge? It's okay if you're
completely new to investing. We want to better understand your investing
knowledge and experience so we can recommend the right portfolio for you.
So, I have no or limited knowledge of investing and the financial markets.
I've been investing for a few years and have a basic understanding of
investments. I have been investing for some time and have a solid understanding
of investing and the associated risks. I'm an expert investor with either a
professional accreditation or professional experience. I'm going to say
this because I am not a CFA or CIM. Alright, which statement best describes
your investing experience. I am a new or inexperienced investor. I own some
investments, but I'm not sure what they are. That's probably most common. I manage
my investments and own stocks, mutual funds, options, in a personal investment
account. My investments are professionally managed by financial
advisor. This is the one that I'm currently doing, so I'm gonna click "Next".
Which statement best describes how you fund your existing investment accounts?
I'm a new investor and or don't have any investment accounts. I have an investment
account and I only make lump sum contributions. I contribute a fixed
amount to my portfolio on a regular basis like weekly, monthly, quarterly. That
is me, that is what I do. Tell us about your plans for this investment. The
minimum amount you need to start investing with RBC InvestEase is $1,000.
That's actually pretty normal for most robo-advisors, just so you know. There are
a few that I think have maybe lower limits, but this is a pretty typical. This
minimum investment will help us develop a diversified portfolio for you. So, I
plan to deposit $1,000 to start and I'd like to retire at age yeah let's say 65.
And it gives a little thing here. Market volatility over
the short term can be unpredictable. True. Fact!
We suggest long-term investors establish a time horizon of at least 7
years to help smooth out these fluctuations. Also agree with that. How
would you like to invest on an ongoing basis? Consider your current financial
situation, what you can contribute on a regular basis. If your plans change, you
can adjust the amount and frequency at any point. So, I plan on making monthly
contributions of whatever amount to my RBC InvestEase account.
I actually do bi-weekly just because I like it. I think I started doing it back
when I was in my early 20s, and I just kind of kept that habit and I like it.
And I don't even notice it because it's so frequent and also my mortgage comes
out bi-weekly so it's, I don't know, I'm just used to it.
Contributions, let's say $200. And right here it says the odds of reaching
your investment goal improves significantly with a regular savings
plan. Start with an amount you can afford knowing it can be changed at any time.
All right, next we've got this $1,000 initial deposit represents approximately
what portion of your total savings and investments. We know it's a personal
question, but it will help us better assess your risk tolerance. About a
quarter or less? About half? Most of it? All of it? Way less, so I'm going to say
that's what it represents. And, a little tip here, total savings
investments include all the money you have in cash, GICs, savings bonds, mutual
funds, stocks and bonds, but exclude real estate and mortgage debt.
Alright, next we've got how much investment risk are you comfortable with.
Based on your goal for this investment account, choose a risk level below. The
graph will show you how potential value fluctuation could affect your investment over
a year. Ok, so let's start with what very low-risk means. So, what that means is, are
you comfortable with taking risk? Or are you very risk-averse. If
you're like "No, I'm terrified of losing any amount of money by investing!" then
you would have a very low risk tolerance. Though, kind of just the rule of thumb, is
if you are younger and if you have a longer time horizon, if you plan on investing
for decades to come, you can afford to take on more risk because you have that
much longer to kind of ride that wave of those ups and downs. But still, you need
to be really cognizant of like how much risk you are really comfortable with. You
don't want to, you know, lose sleep over your investments basically. So, low risk,
this is what it kind of looks like. Initially you deposit $1,000 into your
RBC InvestEase investment account, and at a favorable market you could
potentially make $1,104. But, if the market kind of takes a dip, you could lose a
little bit of money and maybe your initial investment will drop to $963. But,
on the other side of things, if you invest in things that are considered a
little bit more high risk, with your initial deposit in a favorable market, if
things are going well, you could potentially grow that amount after one
year to $1,289 dollars. Or, if things kind of don't go so well in the markets, you
could potentially lose a little money and your initial deposit
will basically decrease to $875. Let's move on, oh it says
something here. Higher risk is associated with the potential for higher returns.
Future returns, that's what I was kind of trying to explain. Although most
investments have some fluctuations over time. 100 percent! Alright, next here we've
got which is your preferred investment approach. We want to better understand
your investment objective for this kanten how much risk you're willing to
take on. So, preservation of investment. I'm not
willing to accept any loss of my initial investment. Growth.
I will accept higher volatility and the potential for significant losses.
Stability. I prioritize steady returns over the long term.
I'm just gonna say growth, because I'm still young, I'm still a younger investor,
and I can accept kind of some volatility for that reward, because I have a very long time
horizon. All right, what would you do if the market took a downturn, which it
will at some point. It is normal. It is not something to fear. It's just, it's
just how it goes. That's just natural. It happens. So, we want to better
understand your risk tolerance. Recall historical periods of steep market
declines (i.e. the Great Recession of 2008 or the dot-com bubble of 2000), so
how would you have managed your investments during these periods?
I would withdraw my funds until the market stabilized. I would take no action,
I avoid following markets too closely. I would transfer in cash to buy more
investments. So, honestly, I'm probably this person. I think I just kind of
yeah. Keep calm and carry on, and not touch it. Oh, we're at step 11, we only got one more
question to answer. Lastly, tell us about your employment. We
know it's a personal one, but it will help us understand your current
financial situation to determine the right portfolio for you. So, I am
currently an entrepreneur, and my
annual income is, what am I gonna put in?
So, let's see what my portfolio recommendation is. Okay, this isn't a
surprise. Growth. Definitely. Based on your answers we recommend a growth portfolio,
here's why. It focuses on generating higher returns, and works well
with your longer investment period and your preference for above average risk
investments. What's this say? Once you open your account, we'll contact you to
confirm your investment plan. We'll also stay in touch to make sure that this
portfolio continues to work for you if your needs change. So, this is actually
great. Again, this is also very common with I think all robo-advisors in Canada.
Even though they kind of spit out, this is kind of what portfolio we suggest for
you, they always have you also talk to a professional over the phone to
verify, to confirm that. Because you may have answered some questions
and maybe you didn't understand, or maybe you changed your mind or whatever the
case. They really want to make sure that
they're helping you invest in the portfolio that you actually want. So,
let's look down here. So, with RBC InvestEase, it says you could have five
hundred and twenty nine thousand five hundred and seventeen dollars by the
time you're sixty five. You can earn an additional one hundred and twenty six
thousand one hundred and sixty nine dollars with the lower fees RBC
InvestEase offers. So, it's comparing RBC InvestEase compared to a traditional
adviser. And let's see what this says. Includes RBC InvestEase 0.5% annual
management fee, applied six months after the pilot program, HST, and assumed 0.14%
ETF management expense ratio. Again, pretty common. There are some cheaper
ETFs out there, but in terms of a robo-advisor management fee, 0.5% is
pretty much the standard you'll find with any other robo-advisor you'll find
out there. So, this is pretty common. And here, it says
average traditional all-in advisor fees are about two percent. Sometimes they can
even be more at 2.5%, so in general using a robo-advisor like RBC InvestEase will
save you a ton of money in fees. And that's money in your pocket, like a
hundred thousand dollars! That's a big difference! And I think what that's why
it's so important to really be aware of what fees you're paying. So it got to
that a total number of over five hundred thousand dollars because I'm starting
with a thousand dollars, making bi-weekly contributions of two hundred dollars. I
am 32 and this will be up until I'm 65. And it says my projected average annual
rate of return is 6.57%. Okay, so we have this information
that is helpful. This is what I was kind of looking
for. So, currently my own investment portfolio, I am investing seventy percent
equities and thirty percent in fixed income. So, that is right on the money.
So, this the questionnaire and me answering those questions, right on the
money. Very accurate. And to view details, so it gets a little specific here,
when comes to fixed income and cash, it's really 28% in fixed income, then
2% in cash. That's fine. And equities, so that's stocks, we've got
24% in Canadian equity, 24% in US equity, and international equity is at 14.5%.
And then emerging market equity at 7.5%. Alright, sounds good to me.
And let's look at specifics here. What are they investing me in? So as you
can see, obviously, they are just RBC ETFs. And, ok, last not least, cut to a few weeks
later. After I pushed that button, it prompted me to fill in a bunch of my
personal information and also schedule an appointment just over the phone with
one of their investment professionals. And that's what I did. I had a chat with
them, I asked them a lot of questions and also just verified if the portfolio did
fit kind of my goals and my risk tolerance and all that kind of stuff. And
in the end, yes, I was happy with it. And so they were super helpful on the phone
and then once that was all done, then I got a sequence of emails telling
me when the money that I moved from one institution to my RBC InvestEase
account has been moved in there, and then my investments were bought.
And then they gave me access to my dashboard, and this is what the dashboard
looks like. So, if you invest with RBC InvestEase, this is what you can expect to
see. So not a heck of a lot at the minute just because it's not been a full
month since I invested with them. So, they don't have any kind of information yet.
But as you can see over here, my goal for this account is retirement. Let's see
what this view details thing looks like. So this is kind of the
information that I inputted in that questionnaire. My first my initial
contribution was $1,000. It was only worth nine hundred and ninety three
dollars and 25 cents at the minute because the markets kind of went down.
Some of my investments changed in value. Dropped in value. And so that is that.
That is how it is. And then also, just some of that initial information. So, I
plan to retire at age 65, I plan to also make bi-weekly contributions of two
hundred dollars, and my portfolio is the growth portfolio that we kind of went
through. And here's a nice little kind of guide too, so it's like starting today
my investments are worth $993, but by the time I reach 65 in 2051,
everything will you know hopefully be worth about over $500,000.
Again, that's just an estimation. We'll see how it goes.
We'll see me at 65. This portfolio information, and also this is actually
really interesting because this really gives you a breakdown of the specific
ETFs you're invested in and their performance, their gains and losses and
all that kind of stuff. And this is where it shows my transactions. So, as you can
see there are some transactions that have taken place. First, you know, $1,000
in cash was put into the account. And then subsequently that cash was divvied
up so we could buy these different ETFs. Well, I hope you enjoyed that walkthrough.
If you still have some questions and I'm sure you do, first of course just reach
out to RBC InvestEase. They have great customer service. I talked to one
on the phone and they're super, super helpful. But also just leave your
question in the comments and I can see if I can help you myself. Maybe I have
the answer you're looking for. Thank you so much for watching. Make sure to
hit that subscribe button, I have a lot more exciting videos in the queue, and I
don't want you to miss any! So, thanks again for watching and I will see you
next time!