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How does Planswell make money?

If you asked a professional financial planner to make a plan for you, it would typically cost several thousand dollars. So how does Planswell give away the world’s best financial plans for free? For starters, our patent-pending technology enables us to produce your plan quickly and at no cost. If you like your plan, we’ll happily implement it for you, and that’s when we make money in much the same way as traditional financial companies, but with three major (really major!) differences.

The average Canadian mutual fund charges more than 2% of your money every year.
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1. Lower fees for everything

The average Canadian mutual fund charges more than 2% of your money every year. Many financial advisors tack on an additional fee for themselves. So year after year, multiple people are taking money off the top of your investment returns and putting it in their pockets.

In contrast, Planswell Portfolios charges nothing for your first $5,000 investment for one year, then 0.50% annually for investments up to $100,000, and just 0.40% if you have more than $100,000. You might be surprised how big a difference this seemingly small reduction in fees can make.

For example, if you invested $10,000 in a balanced mutual fund with a 5.9% annual return and an industry-average fee of 2.32%, you’d end up with just shy of $28,000 after 30 years. At Planswell Portfolios, the same investment and rate of return would leave you with more than $46,000. Not a small difference at all.

You can benefit from this low-fee philosophy with our insurance policies and mortgages too.

2. Good advice on straightforward products

Bad advice is easy to find. Too often, you pay too much for things you didn’t even need in the first place.

Life insurance is a prime example. The more you buy, the more your agent makes. So right away, there’s a conflict of interest. On top of that, insurance companies create complex policies with names like “Whole Life” and “Universal Life” with lots of bells and whistles that often do nothing to help the customer, but generate lots of extra fees for the insurance company and the agent.

At Planswell, we also receive a fee from the insurance company, but we do things a lot smarter. Our financial planning engine figures out exactly the right amount of insurance for you, not a penny more. We use Term Life policies that have no useless extras. We often do a complete health check, which can help get the cost down. And we shop around to multiple insurers to find the absolute best rate for you.

3. Unbiased, salaried financial experts

Traditionally, investments, insurance, and mortgages are sold by commission-based salespeople. This creates a bias for them to recommend the biggest, most expensive products with the most generous commission payments.

To use a common example, think of the mortgage broker who has the power to adjust your interest rate up or down by increasing or decreasing the amount of commission they’ll make. This creates a situation where your interests are in direct conflict with the person who’s supposed to be helping you get a good mortgage.

At Planswell, your plan is supported by a team of experts, and none of them are on commission. That means there is never a conflict of interest, and no one ever has an incentive to recommend the wrong thing for you. In fact, our people are rewarded by how happy you are with our service, not by how much stuff you buy.

Ready for something new?

Planswell’s business model is quite different from the traditional financial industry. We built the company from scratch to provide the world’s best financial plans for free, to bring fees down as low as possible, and to offer this opportunity to virtually every working Canadian.

We know that not everyone wants the newest thing. Some prefer to stick with what they know, even if a better option comes along. But if you’re the type of person who’s open to new ideas, you should really create your plan. It’ll only take about five minutes, and it’s free! No strings attached.


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