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Passiv is a company that I’ve been aware of for some time and have been wanting to partner with us for years. Basically, Passiv looked at the challenges that people face trying to DIY manage a passive, index-based ETF portfolio like the one we teach in our Investment Workshop and said “let’s make an app for that!”
Taking all the repetitive tasks of tracking multiple accounts and rebalancing and wrapping it all up into a cool visual GUI, Passiv always intrigued me as something that would help our readers, but what always irked me was their price. To unlock all the useful features that would really make this tool a must-have, it cost $99 a year, and that didn’t jive with our philosophy of teaching people how to invest for free. Especially since I had already built tools for our readers to help with rebalancing and was giving it away for free.
But this time when one of their marketing people reached out to me and I decided to take it for a test spin, some really interesting developments had happened that really turned me around on Passiv.
So without further ado, let’s see what this thing is!
Linking Your Accounts – Is it Secure?
Like every other financial aggregator, the first thing you need to do is link your bank account, and right here is usually where I get nervous. If I have to give my password to a third party company, what’s preventing them from just stealing all my shit?
In this regard, the USA has a leg up on us. They have fintech companies that have built up financial aggregation systems that allow them to securely access people’s financial data in a way that doesn’t require storing your password. Yodlee, for example, is one of these companies and that’s how Personal Capital is able to securely access their customer’s bank accounts without exposing them to the risk of having their password stolen.
We don’t have any of that here. Furthermore, our banking regulations state that if we give away our password to any bank accounts to a third party company and our money gets stolen, we are shit out of luck. That’s why I’ve never recommended financial aggregators to our Canadian readers (even though we could have been making so much money doing so). Because it would expose our Canadian audience to the risk of having their money stolen and I can’t in good conscience do that.
So how is Passiv different?
Passiv doesn’t store your password. Instead, they access your account via an API.
Without getting into the technicalities, accessing your account via an API means that rather than give Passiv your password so they have complete control over your Questrade account, you grant access from your Questrade account to Passiv, and you can control exactly what access you give Passiv. You can grant read-only access, for example, so that Passiv can see what money you have, but not make trades with it. Because the linking is done using API’s, you don’t have to worry about some unscrupulous summer intern stealing your password and stealing your money, because Passiv never had your password to begin with.
Here’s what linking an account is like.
First go to “Settings” and click “Add Another Connection.”
Then, you pick your brokerage firm (in this case, Questrade).
Then you provide your login credentials. Note that in the address bar, the URL is login.questrade.com, which indicates that you are actually accessing Questrade’s website, not Passiv’s. So even though you’re typing your password into a form, that form is going to Questrade, not Passiv.
Finally, you confirm that you want to authorize Passiv to have (limited) access to your account and you’re done.
Setting Up Your Portfolio
So now that we’ve connected our accounts, what do we do?
Well, first of all, I love this feature of Passiv, which is the ability to group your accounts into separate portfolios. While our investment workshop only shows us building a portfolio with a single non-registered account, the reality is that most people have multiple accounts, like an RRSP or a TFSA. We are no exception. In fact, with all of the LIRA and Spousal RRSP accounts we have, our main retirement portfolio (which we call Portfolio A) is a combination of 7 different accounts, while the investment account I use to store the money we’ve made post-retirement is in it’s own non-registered account which we call Portfolio B.
In the past, I have to manually add up all the right account balances to figure out what my “Portfolio A,” but now I don’t have to anymore! I can just go into the Settings and drag all the accounts into its own grouping, rather conveniently already named Portfolio A while I can leave Portfolio B in its own group.
I didn’t even know I wanted this feature, but now that I have it, I can’t go back. This is how the hedonic treadmill happens!
Next, we need to set up each portfolio’s target allocation. There are two ways of doing this. The first is that you can enter each ETF ticker symbol and its target percentage manually, or you can import your portfolio’s current weighting and tweak it from there. I’m lazy, so that’s what we’ll do.
And finally, we update our percentages back to our targets…
Passiv Rebalances for you
Once you’ve set up your portfolio’s target allocation, here’s where Passiv really shines. You know how in the Investment Workshop, every time we added money into our accounts I had to do all that manual calculation to figure out how much of each ETF to buy to maintain our target allocations? Passiv does all that for you.
Not only does it give you an overall “Accuracy” score on your portfolio to tell you how far you’re drifting off target, it also calculates all the trades you need to do to bring your portfolio back on track.
You can really tell that this is a tool the people at the company use themselves, based on the attention to detail shown when generating these trades. They, for example, know that on Questrade, buys of ETFs are free while sells cost money, so you can set a setting to only generate “buy-only” recommendations. Very impressive.
Once you have these recommendations, you can log into Questrade’s trading platform and type them in yourself, or if you’re comfortable with granting Passiv trading access, you can just press a button in Passiv and they’ll perform the trades for you. It’s up to you if you want this level of convenience, but either way it’s still a really slick system.
Cool Reporting
Next I headed over the or Reporting tab and see even more cool stuff.
All that annoying Excel work I had to do in the past to see my portfolio’s performance over time is now just done for me.
And even better, they have a panel dedicated to just dividends!
At a glance, I can see how many dividends I’ve collected over the year, when they came in, and which ETFs they came from. As a dividend-obsessed early retiree that funds their living expenses via their portfolio’s yield, I can’t tell you how useful this is to me.
This year, I’ve been watching our yield come in like a hawk because I was worried about dividends being cut, but now I can tell at a glance that of the $35k we’re expecting by the end of the year, $24k has already come in so it looks like our Yield Shield is doing its job with no significant cuts experienced.
As I use it, I’m still discovering cool, thoughtful features. For example, if you go to each portfolio’s dashboard, at the bottom-right of the window there’s a button called “Portfolio Visualizer,” which loads up your holdings into the free tool www.portfoliovisualizer.com, which I’ve been using forever to design portfolios, so that’s pretty neat!
Pricing
But finally, the big $99 question: Are all these bells and whistles worth the price tag?
Well, it turns out, it’s not a $99 question, it’s a $0 question. Because for Questrade users, Passiv is FREE to use!
How is this possible? Apparently, Passiv recently inked a deal with Questrade so that for every user that signs up to Passiv, Questrade pays the subscription fee rather than the user.
Why would they do this? Because it makes Questrade’s platform way, way, easier to use.
As much as I love Questrade, if you’ve used their trading platform (and especially their advanced platform IQ Edge), you’ve probably noticed that it’s really set up with individual day traders in mind. You can pull up all sorts of fancy-looking graphs and implement options strategies from their software, but it’s not easy to, say, figure out how much money your family has.
If some of the accounts are in your name and some are in your spouse’s name (like us), you have to jump through all these hoops to see your total family’s holdings. And if you want to figure out how your total portfolio’s price history, there’s just no way to do it. I had to pull up old statements and generate the charts myself in Excel.
So from Questrade’s perspective, Passiv just did all their work in making their UI way more accessible for them, so they’re treating Passiv as an outsourced UI development house. Passiv maintain the code, Questrade pays them a subscription fee, and that way Questrade doesn’t need to hire developers in-house to do it themselves.
Conclusion
So there you have it. Tons of cool features, you don’t have to give up any security, and on top of it all, it’s absolutely FREE for Questrade users.
So should you sign up with Passiv? Absolutely yes. Hell, at that price point, you can’t afford NOT to!
And if you do, please use this link to support our blog so we can keep the FIRE burning!
Also, note that Passiv only works for Canadians using Questrade and not our American readers, but hey you guys have had Personal Capital for forever, so keep using that!
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Disclaimer: The views expressed is provided as a general source of information only and should not be considered to be personal investment advice or solicitation to buy or sell securities. Investors considering any investment should consult with their investment advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decisions. The information contained in this blog was obtained from sources believe to be reliable, however, we cannot represent that it is accurate or complete.
Thanks so much guys! This is the best news since I discovered FIRE! 8 years of manually updating spreadsheets and graphs…waived away in 7 minutes of linking Questrade and Passiv. My OCD digs the refresh button, which gives realtime updates on aggregate portfolio value over 7 accounts! WHAT!? I think I’ll try the buy option at the 0.1% price limit threshold. Now, if only something like ACB could integrate as well – so I didn’t have to update acb for non-registered…one can wish.
Didn’t Questrade recently start calculating ACB on tax forms? I could be wrong though…
Looks like Passiv might be a great solution for our northern neighbors to help automate rebalancing accounts.
I’m surprised that API access would be treated differently from account access in terms of financial liability but I understand there’s lot of bureaucracy here.
At this point most banks are using a similar system to talk to services like Mint here in the US; you’re generally not granting them full account access with the aggregator screen scraping the account data anymore.
Ultimately $99/year is nothing if it helps a $1M+ portfolio keep balanced, find tax harvesting opportunities, etc.
Neat tool.
Passiv is pretty useful tool to use unless you are managing different types of accounts as a 1 portfolio.
There is no way to set up which asset class will be placed on specific account type at this point (ex : bond – RRSP first then spills over to Margin, Canadian Equity stays in Margin etc), buying through Passiv will make my portfolio not very tax friendly.
I really hope they add this feature in the future. It could be really powerful tool for some people like me who has anxiety attack whenever rebalance my accounts one by one.
I agree that this is a serious defect, and hard to understand since Passiv has a whole page about tax efficiency: https://passiv.com/blog/tax-efficiency/
How much did Passiv paid you to
promote them?
THIS SH&T IS ONLY FREE FOR A YEAR.
* Questrade covers the cost of Passiv Elite subscriptions for their customers on an annual basis and reserves the right to discontinue at any point.
Looks like it’s free as long as Questrade says it’s free. Not just the first year.
WOW!…, this is definitely a game changer for sure!
Things just gotten way easier it seems. I’m thinking it’s about time to look into making that “switch”. Having access to Passiv might be just what I would need to simplify overall usage, ease and comfort.
Really loving this timely post as it definitely addresses one of my main concerns in managing my own investments. Thank You @Wanderer and @FIRECracker for this info! You guys rock!!!
ImmigrantOnFIRE
Does Passiv allow exporting any of the data to CSV/XLSX format? It would be nice to feed some of the data/groupings into reporting for other metrics than just the history and current values.
You can do that using Wealthica (export). Wealthica will support secure authentication that do not require to share your credentials with financial institutions that offer it (Questrade, Wealthsimple, Interactive Brokers, CI Direct Investing).
Hi guys!
LOVE your work and making the FI world accessible.
I’d love to use Passiv, but I’m based in the UK- any equivalent service you know of??
Thanks!
Heather
I’ve been wanting M1 Finance to come to Canada, but Passiv looks like it does something similar. Very happy you guys mentioned this!
Great find, Wanderer. I just signed up using your link above. However, it said that Passiv will be free for a year only for Questrade users.
Thanks for the post and the great blog!
Question- a bit unrelated: I see TD Ameritrade in the 2nd screenshot, and know you guys are Canadian. How were you able to open this account? As a Canadian who used to work in the US and still has a 401k there, a TD Ameritrade account would make it easier to transfer the 401k to a TD Ameritrade IRA (US) then TD (Canada) – however in the past it required US info to set up an IRA.
Interactive Brokers shows up too in the screenshot- how do you use it, is it easy yo set up as Canadian?
Thanks!
This article couldn’t be more timely!! I was moaning yesterday on how I need to figure out how to better automate my buys (I’m lazy) and make rebalancing less of a pain (I’m sloooow at the math). And I’ve always wanted to figure out how to track growth better without having to figure out how to master excel. I was worried about security so super happy that you opened with info on that. Just want to flag the fine print in the $99 annual fee reads as
“* Questrade covers the cost of Passiv Elite subscriptions for their customers on an annual basis and reserves the right to discontinue at any point.”
…so maybe I’ll love Passiv, love it being free, and learn to depend on it just in time for Questrade to yank this perk… I’m thinking I’ll risk it. (omg if they could also calculate ACB I’d be euphoric).
Thanks again for this super helpful, super timely article!
Looks nice but I like my spreadsheet better hands down. It’s fully automated except for me having to update the current ETF price and the dividends once a month. I guess I could build a macro to pull that data automatically but then I give up my fun. I have a rebalancer for all my accounts (RRSP, TFSA, non-registered) and I even have a section to update my bank account balances. Each month, I also have a section that considers income (paycheque) coming in versus my living expenses going out. It tells me what my savings rate, how I’m trending and if anything is out of whack. 10-15 minutes to update that in a month is worth it for me and I can keep an eye on what’s going on financially. It keeps me sharp and on the ball. My data stays mine and I maintain full control.
Free for a year? After that, once you’re used to the routine, $$$. No thanks. I’m too frugal to pay for that.
Thank you so much! I was on the fence and honestly too frugal (cheep) to pay the fee! But seeing the features and being a Questrade customer, I am trying it now!
Cheers,
Leo. 😊🙏
Thanks for sharing the resource! However I’ve been having problems with Passiv’ graphs – there seems to be some missing info that don’t reflect my personal records (maybe that’s why it’s beta for a reason)…I wonder if it’s just me?
I think they are a good comp[any and i like their software
This is great, although I hope Questrade decides to keep covering the cost after the 1st year.
* Questrade covers the cost of Passiv Elite subscriptions for their customers on an annual basis and reserves the right to discontinue at any point.
Doesn’t seem like it’s only the first year covered.
There is also Wealthica.com which consolidates all of your Canadian accounts for free!
Thanks so much for this! Just signed up! And wow I hope they keep up the free partnership because this makes my life so much easier 😀
A part of your post is misleading and incorrect. But don’t worry, it’s normal, aggregation is kind of a confusing subject !
Yodlee does store your credentials to connect with your financial institutions. It’s the same as using Yodlee, Plaid, Flinks or Wealthica here in Canada. The only difference is Yodlee and Plaid don’t support many Canadian financial institutions or when they support it they don’t report the financial data very well. That’s why Flinks and Wealthica exist in Canada, to complement Yodlee or Plaid with better support for Canadian financial institutions. Personal Capital relies on Yodlee which does store credentials most of the time. It’s equivalent to how Wealthica works here in Canada.
Mint does the same. It doesn’t even support secure connectivity with the financial institutions that offer a secure way to connect (for example to connect Questrade in Mint they will store your credentials, while Wealthica or Passiv will not.)
The situation in the USA is almost the same as here in Canada in term of aggregation and storing your credentials. Yodlee does store your username and passwords for most institutions. Most financial apps in the US (and in Canada) will use Yodlee or Plaid to connect with your financial institutions. In Canada it’s a mix of Plaid, Yodlee, Flinks and Wealthica. When it’s possible, those services in the USA and in Canada will use an API and Open Banking and not store your credentials… BUT it’s most of the time NOT possible to retrieve your financial data without storing credentials. Often, there is no other option available and when there is no other option available, those services store your credentials.
TODAY unfortunately, you can probably count on your fingers the number of financial institutions that support secure authentication, API and open banking whether it’s in the USA or here in Canada. Questrade, Wealthsimple, Interactive Brokers and a few others will allow to connect with third party services in a secure way. But that’s about it. Things should change in the years to come, but there’s still a long way.
So my point is, it’s not about the US or the application your using. It’s about your financial institution. You can use Wealthica or Passiv without sharing your credentials if you use financial institutions that supports it.
Also, many financial institutions use aggregation themselves. RBC has aggregation features within its own portal. Banque Nationale too. Wealthsimple, Questrade and others use it to authenticate and verify its users and link bank accounts for deposits and transfers, etc. You shouldn’t share your credentials with the first fintech app you find without doing proper research, but some of those aggregation providers are trusted by financial institutions themselves.
My 2 cents. Hopefully it’s useful 🙂
Disclosure: I’m one of the founders of Wealthica.