Passiv Review: A DIY Alternative to Robo Advisors

You might be wondering whether the Passiv Elite membership is worth it.  Here’s my Passiv review.  I’ve been a DIY investor for over 10 years and have learned plenty of lessons in investing and have gone through a number of stages in my investing journey.

Updated March 2022

I learned that asset allocation is important and rebalancing to your correct allocation is very important, especially if you have natural Canadian home bias.  Many people are interested in DIY investing instead of using a robo advisor due to the lower fees.

Many people (like me) invest with Questrade discount brokerage and want to set up a a Questrade TFSA investing account.  However, many beginner investors are overwhelmed with how to rebalance, or too busy to set time up to rebalance their portfolios.

I personally enjoy rebalancing regularly as it gives me a chance to review my portfolio more closely.  However, I know there are lots of people who have absolutely no interest in personal finance and could care less about taking time out to rebalance their investment portfolios.

This is probably the majority of the population outside of the personal finance blogosphere, which is why, for example, my sisters chose to invest with a mutual fund saleslady and her high MER mutual funds.

I guess this is where Passiv comes in.  They are like an alternative to robo-advisors (which can cost about 0.50-0.70% on top of the ETF fees).

Although I don’t have use for Passiv personally (as  I like rebalancing and reviewing my portfolio, it is almost therapeutic for me), I am always interested in new financial products or fintech products available and gave Passiv a closer look.

In this Passiv review, I’ll go over:

• What Passiv is
• Whether Passiv is considered safe
• How Passiv makes money
• How Passiv works (and what the dashboard looks like)
• Some Passiv pros and cons

What is Passiv?

Passiv was created by two entrepreneurs (both named Brendan- Brendan Lee Young and Brendan Wood) from New Brunswick.

They wanted to provide a product that helped consumers move away from paying high MERs and fees for investing.

Passiv was launched in 2017.

Passiv is a software that can help you be completely passive (hence the name, I suppose) with your investments because you will not have to do asset allocation and manual calculations.  It is a web app that helps you keep a desired target allocation.

According to their website, Passiv currently has hundreds of Canadians users and they help these investors manage over $100 million in investable assets through Questrade.  Currently, Passiv is partnered with Questrade, but they recently added some brokerages from the United States and are continuing to expand.

Currently you can connect your brokerage account with Passiv with these platforms:

• Questrade
• Alpaca
• Interactive Brokers
• TD Ameritrade

Passiv recently had a Reddit AMA (Ask Me Anything) with Brendan Wood, one of the founders of Passiv.  There are some great questions in the AMA.

Is Passiv Safe?

No Passiv review is complete without reviewing Internet safety.  For more information, check out Passiv’s security page.  Passiv does not store your login credentials when you connect API with your brokerage (for example, Questrade).

According to Passiv, API is a set of definitions, protocols and tools for building software.  API helps connect Passiv with your brokerage.

You can also enable two factor authentication with your phone for added security.

I didn’t like how my Questrade account numbers were visible on the Passiv dashboard, though.

How does Passiv Make Money?

A Passiv review isn’t complete without wondering how a company makes money.  Passiv has two access points, one is free “a community user” where you can have automatic calculations and cash and dividend notifications but they actually don’t execute any trades for you.

The other is the Elite membership, and it is normally $99 per year.

Questrade and Passiv recently partnered to provide the Elite membership for free for Questrade users.  Initially it was just free for the first year, now it is free, period!

Passiv does not sell user data or provide financial advice or recommendations on products or affiliates, and are paid directly by Passiv users and by brokerages.

With the Passiv Elite Membership ($99 annually) you get:

• Automatic calculations (same as the free version)
• Cash and dividend notifications (same as the free version)
• One click trades (this can be turned off, personally I would be wary of one click trades simply because I am a control freak)
• You can manage more than one account (for example, an RESP, or your spouse’s RRSP account if he or she is not interested in investing)
• As you can see below, the Elite options are in a grey font and if you want to use these Elite options you pay the extra $99 a year
• Passiv Elite is free for Questrade users.

How Does Passiv Work?

To access your brokerage and investments, Passiv works similarly to Wealthica (my favourite investment portfolio tracker and one of the best personal finance apps in Canada), in that they use the brokerage’s to API access to keep your information safe and secure.

Here’s my review of Wealthica if you’re interested.

Passiv helps you rebalance your portfolio without paying a high MER (management expense ratio) so you can keep your investing costs down.

Passiv has a free version and another version that costs money, the Elite Membership for $99/year (but it’s free for the first year for Questrade clients).  Passiv does have a money back guarantee.  If you are not happy with it, they will provide you with a refund.

You get into the dashboard and are asked to set up a target portfolio so that your asset allocations can be understood, alternately, you can automatically set your target portfolio to your current allocations.

This post may contain affiliate links.  Please see genymoney.ca’s disclaimer for more information.

Then you put in your brokerage credentials for API access.  After a few minutes, your Passiv dashboard loads up with your accounts.

Then you have an option of inputting your target allocations manually (this you will have to input with specific stocks and ETFs).  To me, the downside for manually inputting it is if you have more than just a few ETFs, it can get messy in my opinion.

Or you can have it automatically set target asset allocations to the allocations you currently have- it will do this for each individual account (for example, TFSA, RRSP, non-registered) or you can include all of your accounts into one specific portfolio so you have a more holistic picture of your investment portfolio..

You can also exclude individual stocks or ETFs from being included in the portfolio and being included in the asset allocation calculation.

Then, the unique thing that Passiv does is in a blue square, it gives you suggested BUY orders so that you can rebalance your portfolio.  You can either follow the script and put the suggested trades in yourself in Questrade, or you can just click “BUY” from within Passiv and they will execute the trade for you.

As you can see the downside is with Questrade, only the ETFs are commission free to purchase.  If you go about buying individual stocks this can get a bit expensive if you are rebalancing frequently.

In the newer version of Passiv, there are some neat new features.  One is currently in Beta testing, but they have something called a Portfolio Visualizer.

It’s pretty cool, it turns your holdings and portfolio into something that looks like a “fund fact sheet” complete with calculations for your CAGR (compound annual growth rate) and returns adjusted for inflation.

More of Passiv’s Portfolio visualizer- it gives you a ‘hypothetical’ initial balance of $10,000 and you can see how your current balance will if you had invested $10,000 in your fund (whatever you have in your portfolio) in 2015 and how you would fare now.  Pretty interesting!

Along with the Portfolio visualizer, Passiv also has a ‘Reporting’ section where you can see your:

• Contributions and withdrawals
• Total value net change
• Investment growth
• Dividend history
• Total dividends received (in the past year, or you can do ‘Year to Date’ or ‘All Time’)

Here’s what the Dividend History reporting looks like, it even breaks down your average monthly dividends and breaks down dollar for dollar each dividend you get paid out per month (this is something that Wealthica doesn’t have).

It doesn’t have future expected dividend yield though, you might have to keep your own dividend tracker spreadsheet for that.

I like that they made the graph more colourful in the more recent version of Passiv.

New Passiv Goals Feature

As of December 2020, Passiv has a new goals feature.

With the new goals feature from Passiv, you can set investment portfolio goals for yourself down to the month that you want to achieve it.

It feels like this is made just for me and my investment portfolio net worth goals of $1,000,000 investment portfolio (and possibly $35,000 dividend income) by the time I am 40 in a few years.

It basically is a compound interest calculator embedded into Passiv.

One downside to this is that it only includes the investment balance you have with the featured brokerages (e.g. Questrade and TD Ameritrade), so if you by chance have other investment holdings with other brokerages (for example, TD Waterhouse or something) it will not be included.

With the Goals feature, you can add it onto your Passiv dashboard too, to see what percentage you are at towards reaching your goals.

Here are some other Passiv pros and cons that I have identified.

Passiv Pros:

• You can maintain your current portfolio’s target asset allocation
• It can help you execute your trades to maintain your asset allocation without you having to do it yourself (you can do it right from Passiv)
• You can set up smart alerts to see when your portfolio drifts out of alignment (tells you to rebalance when your portfolio allocation is off by 10% for example)
• They send you emails when something changes in your portfolio
• Passiv is set to “BUY ONLY” by default (just like the way I rebalance- I don’t sell ETFs) so that you don’t have to pay unnecessary Questrade commissions and fees in selling ETFs.  As we all know Questrade is free when you buy ETFs and charge the usual commission when you sell an ETF
• They have some very useful video tutorials on things like asset allocation etc.
• They recently partnered with Wealthica as an add-on in their investment tracker
• You can now track your dividend income (and it averages it out)
• Their new Portfolio visualizer is pretty cool

Passiv Cons:

• Passiv is not a robo advisor and does not give any recommendations on which ETFs to purchase.  There is no investment advice given at all and there is no one to contact if you want investment advice.
• If you are interested in the “all in one” ETFs such as VGRO where it rebalances for you, then something like Passiv will be a moot point and not necessary.  If you have VXC ETF as ex-Canada then Passiv might be helpful since it’s not an automatic all in one ETF.
• When Passiv does portfolio allocations, it can calculate portfolio as a whole (for example, RRSP TFSA non registered all amalgamated) or and you can separate it to have calculation of allocations based on the TFSA alone and the RRSP alone etc. (you can change this in Settings)
• If you are good with Excel and can rebalance yourself, this might not be necessary
• It shows your account numbers on the Passiv dashboard (personally I would rather see it semi-hidden)
• I notice there is some downtown when you are unable to access your data from Questrade.

Genymoney.ca’s Passiv Review

What’s my Passiv review?  As you can see, Passiv is a very interesting financial tool that can help remove you from the burden of the boring part of investing, asset allocation.  In a way, it is like a robo advisor without the higher cost since it’s free for Questrade users.

If you don’t have Questrade (I’ve been using it since 2009), here’s a link for $50 in free trades.

On average, robo advisors cost around 0.75% to 1% of your portfolio (see my post: Pros and Cons of Robo-Advisors), so if you had a $10,000 portfolio it would be around $75 to $100 annually and this does not include the taxes paid for capital gains incurred with rebalancing (if there are sales).

On a $100,000 portfolio that’s $750 to $1000 annually.  It can really add up.

However, if you don’t need the Elite options or you aren’t a Questrade user, Passiv is actually free as a “community user” so this is even better (provided you are not spreadsheet savvy like most people are).

I think that if you have mainly ETFs in your portfolio and a limited number of them Passiv Elite will be a great tool for rebalancing as a DIY investor.

Alternately you could also do a Questrade Drip for equities or ETFs but this could potentially cause havoc with your asset allocation.

You can be your own robo advisor and save on the fees.

If you have a lot of other stocks and if your portfolio is kind of like a mess like mine, or you actually like rebalancing or like to research new stocks to buy, I don’t think Passiv will be that useful (because it will tell you to buy what you currently have in your portfolio).

That being said, Passiv’s dividend income reporting features and Portfolio Visualizer tools are pretty amazing!

Overall, I’d say my Passiv review is positive, the graphing features are neat (since Questrade’s own graphing features are lacking) and this is a great tool for a beginner DIY investor, especially since it’s free right now.

You can sign up for the Passiv Elite membership here for free if you use Questrade.

Hope you enjoyed this Passiv review!

Related:

• Scotia iTrade vs Questrade
• Portfolio Income vs Active Income vs Passive Income

Do you use Passiv?  What’s your Passiv review?

How often do you rebalance (do you wait until asset allocations are off by a certain percentage?)