Highlights:
- Robo-advisors aren't actually robots. A registered human is responsible for your portfolio, and that changes how you should compare your options.
- The fee gap looks tiny on paper. See what half a percent actually costs you on a $100,000 portfolio.
- There's a third option most comparisons skip, and it keeps both the low fees and the autopilot.
If you've decided to start investing without an advisor, you've probably hit this fork in the road: hand it to a robo-advisor, or do it yourself?
Here's a clear look at both options, what they cost, and a third option that sits between them.
Quick answer: DIY investing or a robo-advisor?
Both options have their positives and negatives. A robo-advisor is better if you want to be completely hands-off and don't mind paying a yearly fee for that. DIY is better if you want the lowest cost and full control, and you're willing to do a little recurring upkeep.
The cost difference is the big lever. Robo-advisors in Canada typically run about 0.5% to 1% of your balance per year all-in. DIY costs only what your ETFs charge, which is a small fraction of that.
There's also a middle path: manage your own portfolio and use a tool to automate the tedious parts. More on that below.
What a robo-advisor actually does
A robo-advisor is a service that builds and manages a portfolio for you. You answer a questionnaire about your goals, timeline, and how much risk you feel comfortable with. The service puts your money into a ready-made mix of low-cost ETFs and keeps it balanced over time.
Despite the name, a robo-advisor is not just a robot making decisions on its own. For example, in Ontario, online investment advisers provide discretionary portfolio management, and a human adviser is involved in and responsible for the investment decisions made for you.
The idea is simple: you deposit money, they handle everything else. Rebalancing, reinvesting, staying the course when markets wobble. You never have to place a trade or know what a ticker symbol is.
The tradeoff is control and cost. You get their model portfolio, not yours. And you pay a management fee every year, forever, on your whole balance.
What DIY investing actually involves
DIY investing means opening an account at a brokerage like Wealthsimple or Questrade, picking your own investments, and managing them yourself.
For most people following a passive strategy, that means choosing a few index ETFs, deciding on a mix, and buying regularly.
The good news: it's cheaper than any managed option, and you're in full control.
The tradeoff is that you do the work. Every deposit, you figure out what to buy. When your mix drifts away from your target, you notice it (or you don't), do the math, and place the trades. You keep yourself calm in a downturn with nobody on the other end of the phone.
None of this is hard math. It's just recurring, slightly tedious, and easy to put off. DIY portfolios can drift because nobody got around to rebalancing.
What each one costs
This is where the comparison gets real.
According to MoneySense's 2026 robo-advisor guide, robo-advisors in Canada typically cost about 0.5% to 1% of your money per year once you include both the management fee and the fees inside the ETFs they use.
Half a percent sounds like pocket change. On a $100,000 portfolio, 0.75% is $750 a year. Every year. And the dollar amount grows as your portfolio grows, even though the work of managing it doesn't.
Stretch that over 20 years and the pocket change becomes real money. At a 7% annual return, $100,000 grows to about $387,000 before fees. But with a 0.75% annual fee, you’d end up with roughly $337,000 instead. That’s about $50,000 less, because every dollar paid in fees is a dollar that no longer gets to compound.
DIY costs much less. You still pay each ETF's own built-in management fee, which for broad index ETFs is typically a small fraction of a percent, plus whatever your brokerage charges per trade (many now charge nothing for ETF purchases). There's no management fee on top, because you're the manager.
Over decades, that gap compounds. The question is whether the savings are worth your time and attention.
So which is better?
It depends on which of these sounds more like you.
A robo-advisor probably fits if: you want to be completely hands-off, you'd rather pay a fee than think about your portfolio, or you know yourself well enough to know you'd never actually get around to rebalancing.
DIY probably fits if: you want the lowest possible cost, you like having full control over what you own, and you're willing to do a bit of recurring upkeep to keep your plan on track.
Neither answer is wrong. A robo-advisor that keeps you invested beats a DIY plan you abandon. A DIY plan you actually follow beats paying a fee for something you could do yourself.
Here's how the three approaches compare at a glance:
The middle path: DIY with the boring parts handled
Here's the thing most comparisons miss. The ‘work’ of a DIY portfolio can be automated, so you keep control and don’t have to pay a percentage of your portfolio.
That's where a tool like Passiv sits in. You use your own brokerage account, your own ETFs, and your own target mix. Passiv watches it for you, tells you when new cash arrives, and does the math on what to buy to stay on target. You place the trades, so nothing happens without you.
You get some of the convenience people like about robo-advisors, while keeping the control and lower fee structure of DIY investing. No percentage fee scaling up with your balance, just your ETFs' own small built-in fees.
Make it even easier with Passiv Elite
The free version tells you what to buy, and you go place those trades at your brokerage. Passiv Elite removes that last step too.
With one-click trades, Elite turns the whole chore into a single button. New cash lands, Passiv does the math, and one click places all your trades so your portfolio will stay balanced.
You get the ease of a robo-advisor, while staying in control of your investments.
Frequently asked questions
Do robo-advisors get better returns than DIY investing?
Not inherently. Both typically hold similar low-cost index ETFs, so they ride the same markets. The difference in outcomes usually comes down to two things: fees, where DIY wins, and behaviour, where whichever approach keeps you invested and on-plan wins.
Can I switch from a robo-advisor to DIY later?
Yes. You can transfer your account to a self-directed brokerage. Ask for a direct transfer rather than cashing out, since selling investments in a non-registered account can trigger tax on any gains. Your old institution may charge a transfer-out fee, and some brokerages periodically offer to cover it, but terms change, so check before acting.
Is DIY investing safe for a beginner?
The mechanics are simpler than they used to be. An all-in-one ETF gives you a diversified portfolio in a single purchase. The bigger risk for beginners typically isn't picking wrong, it's behaviour: panic selling, chasing trends, or abandoning the plan. If you're not confident you'll stay the course alone, that's a fair reason to start with a robo-advisor.
Do I need a lot of money to start either way?
No. Most robo-advisors have low or no minimums, and DIY can start with a single ETF purchase. What matters more than the starting amount is contributing regularly.
What's the cheapest way to invest in Canada?
DIY with broad index ETFs, since you skip the management fee entirely. The tradeoff is that you're responsible for the upkeep, which is exactly the gap free tools can fill.
Want to make DIY investing easy? Passiv's Forever Free account does the math for you, tells you when your portfolio has drifted, and tracks everything across your accounts, all without paying a cent. Set up your target portfolio in about 10 minutes.
