January 30, 2023


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TD launches new financial planning app

A man wearing a protective face mask walks by TD Bank in the financial district in Toronto on June 24, 2020.

Carlos Osorio/Reuters

Toronto-Dominion Bank is taking on the robo-adviser sector with a new financial planning app that aims to draw in young do-it-yourself investors who have flocked to trading on their mobile devices during the COVID-19 pandemic.

The bank will announce Tuesday it is launching TD GoalAssist, a new trading platform that allows Canadians to set up a financial plan, trade TD exchange traded funds (ETFs) with zero commissions and have access to stocks listed on major North American exchanges – all without any investment minimums or monthly fees.

TD’s digital strategy is cashing in on the growth of retail investors who are picking up their mobile phones more frequently to manage their investment portfolios. Three years ago, mobile-only users at TD Direct Investing – the bank’s online discount brokerage – accounted for less than 5 per cent of trades. Now, up to 35 per cent of trades are made by investors using mobile devices as their primary source of trading.

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“We know a lot has changed in our lives this year as a result of the COVID-19 pandemic,” Paul Clark, president of TD Direct Investing, said in an interview. “From an investing perspective, we’ve seen a significant increase in demand for online investing and more people trying investing on their own.”

Mr. Clark said while COVID-19 was not the reason TD developed the app, the timing could not be better as investors with more time on their hands are asking to be educated on how to invest, rather than just depositing funds and having it done for them. For that reason, he says, the bank shifted its strategy away from launching its own in-house robo-adviser.

“We began to see this trend slowly start three years ago, where clients were moving away from this ‘set and forget’ mentality and asking us to be a part of the portfolio planning, rather than have us set one up for them,” Mr. Clark says. “And that trend has grown even more now with millennial investors who are more accustomed to learning through how-to videos on YouTube and Netflix subscription models.”

Unlike a traditional trading platform, the app provides investors a bit of hand-holding, with access to almost 100 educational videos on investing and an alert function that notifies a client if a portfolio goes outside the risk tolerance level.

Similar to a robo-adviser – which provides a client with an appropriate asset allocation based on age, financial goals and risk tolerance – users of TD’s new app who do not want to pick their own ETFs and stocks can still opt for a prepackaged investment by choosing the bank’s asset allocation ETFs. Known as the TD One-Click ETFs, the funds range from conservative to aggressive strategies and bundle a diversified mix of underlying ETFs into a single product, which automatically rebalances as needed. Clients have to determine their own risk tolerance and select the corresponding fund.

The app does not include the ability to purchase any third-party ETFs. It steers clients to TD’s proprietary ETFs – a segment of the bank’s asset-management arm that had trouble taking off after launching in 2016 with six index ETFs.

Despite being the third bank to enter the ETF market, TD saw minimal growth in the sector, managing about $75-million in assets in 2018, compared with Bank of Montreal’s total ETF assets totalling $48.3-billion for the same year.

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Now, the pandemic has paid off for the bank’s more aggressive push into ETFs, with sales totalling $2.5-billion for the first nine months of the year. That brought TD’s total ETF assets up to $3.8-billion as of Sept. 30, making it the country’s eight-largest ETF provider.

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