Fee transparency, greater efficiency, investment simplicity: The next generation has arrived



Link’s Brian McClennon discusses robo-advisors and ETFs before CPBI audience

It’s the next generation for group retirement and savings plans—and it’s growing up very, very quickly.

Since the first robo-advisors were launched in 2008, following the global financial crisis, they’ve rapidly changed the investment landscape.

In Canada, Wealthsimple, founded in 2014, has C$4 billion in assets under administration. In the U.S., Betterment, launched in 2010, handles more than US$16 billion in assets. Worldwide? That total will reach $2 trillion by 2020, according to estimates.

Calgary-based Link Investment Management is on the leading edge of disruptive innovation in this space—with a proprietary robo-advisor algorithm and a “triple threat” platform, with workplace equity, savings and health plan management on a single cloud-based platform.

Link president and CEO Brian McClennon discussed the subject of robo-advisors and Exchange Traded Funds (ETFs) before an audience of industry professionals from the Canadian Pension and Benefits Institute (CPBI) Southern Alberta Region at Calgary’s Palliser Hotel.

Mr. McClennon emphasized the suitability and cost advantage of robo-advisors for small to midsized employers. He noted that Link’s workplace financial wellness plans, such as the Alberta Link Pension Plan (ALPP), fit the needs of group plan sponsors looking to offer suitable, low-fee savings plans for their workforce.

He also told his CPBI audience that the robo-advisor option:
  • Removes emotion from investing;
  • Provides a portfolio of low-cost, index-tracking ETFs based on an audit of an employee’s risk tolerance and retirement objectives”;
  • Offers “set-it-and-forget-it” ease of administration for employers;
  • Provides regular automated rebalancing based on a member’s assigned asset allocation; and
  • Is appropriate for all investors.

Through robo-advisors and ETFS, noted Mr. McClennon, employers enjoy greater efficiencies and reduced liability, while employees enjoy easy enrolment, suitable investments, lower fees and ultimately more money in their pockets.
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