Wealthsimple review 2024
This Toronto-based fintech continues to attract Canadian investors with its low-fee robo-advisor, discount brokerage and money management services.
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This Toronto-based fintech continues to attract Canadian investors with its low-fee robo-advisor, discount brokerage and money management services.
Since launching in 2014, Wealthsimple has developed a strong reputation for offering online, easy-to-use, low-fee financial services. It’s come a long way since its humble beginnings exclusively as a robo-advisor (now known as Invest). It now offers:
Which, if any, of these services are right for you? Here’s what you need to know about investing or trading with Wealthsimple, including its various product offerings, how it works, and their associated fees.
If you’ve used Wealthsimple in the past or used some of its products, know that while Invest, Trade and Cash were offered under separate apps, they’re now all part of just one Wealthsimple app—which has made the user experience more convenient. Only Wealthsimple Tax maintains a separate app/platform.
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Both Wealthsimple Invest and Wealthsimple Trade are excellent low-fee investment options. Choosing between the two services comes down to three factors:
If you aren’t interested in choosing your own investments, Wealthsimple has a robo-advisor which falls under their “managed investing” option. Once you create an account, you’ll be recommended one of three “classic” diversified portfolios of exchange-traded funds (ETFs) based on suitability factors such as your financial goals and risk tolerance. In addition, it has a “socially responsible investing” portfolio and a “halal portfolio.”
With the robo-advisor option pretty much everything is on autopilot once you fund your account. You can set up pre-authorized transfers to invest on a regular basis.
You should know, though, even if you want to alter or tweak your portfolio in any way, you won’t be able to do this. If your aim is to pay as little as possible in fees and you’d like to choose your own ETFs, stocks and/or want to invest in cryptocurrency, their self-directed option may be better for you.
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Managed investing charges two types of fees:
Self-directed investing fees depend on the type of investments you choose:
The one exception to stock and ETF fees with Wealthsimple is a 1.5% foreign exchange conversion fee for investing in U.S. equities. That’s because you can only hold Canadian currency in your account under the basic plan. You can avoid this fee by paying US$10 per month, which lets you hold U.S. dollars in your account. Also, customers with over $100,000 in their accounts (“premium” and “generation” tiers) don’t get charged this FX fee.
Read our reviews for Wealthsimple Invest and Wealthsimple Trade below for more information about their fees and services in general.
A technology-driven, easy-to-use, and low-cost investment service launched in 2014–has three main offerings. Here’s a look at each.
The robo-advisor service from Wealthsimple is ideal for novice investors or those who are not comfortable managing their own investment portfolio. The algorithm recommends a portfolio for you based on your financial goals and risk tolerance.
Clients spend a few minutes answering questions online about their age, comfort level with risk and investment goals. Your answers determine which portfolio is recommended: Conservative, balanced or growth. There are also SRI and Halal investment options, as noted above. Recently, Wealthsimple has added two more options: a private credit fund which targets a yield of 9% and private equity offered through LGT Capital Partners.
You can put your investments into many different types of accounts, including registered, such as RRSPs, TFSAs, RESPs, FHSAs, non-registered accounts and more.
In terms of cost, Wealthsimple’s managed investing fees are as follows:
So, depending on the size of your portfolio and the types of ETFs you hold, the total fees could range from about 0.4% to just under 1% per year—calculated daily and charged monthly.
What does that look like? You’d pay about $200 to $500 in annual fees for a $50,000 portfolio.
For those who want to lower the costs of investing even further—and who are also interested in building their own portfolios with select ETFs, stocks and cryptocurrencies—Wealthsimple’s discount brokerage service is an appealing option. That’s because all its ETF and stock purchases, sales and trades are free of charge. (You still pay the management fees, or MERs, on ETF holdings, as explained above.) Crypto trades cost 0.5% (“generation” tier), 1% (“premium” tier) or 2% (“core” tier) and there’s no fee to deposit or withdraw coins.
Wealthsimple clients make their transactions online using a mobile app and can hold their portfolios in four account types: personal (non-registered), TFSA, RRSP and crypto.
Canadian investors using this service can buy ETFs and stocks listed on the NYSE, NASDAQ, TSX, TSX-V, NEO, Cboe and CSE exchanges. There are also limited securities available on the BATS Exchange.
On the plus side, fractional shares are available, which makes it easy to purchase stocks even with relatively small amounts of money. And from a cost perspective, free trades are hard to beat, given that some other discount brokerages charge up to $10 a transaction.
Wealthsimple says earnings come primarily from a 1.5% currency exchange fee, which includes a spread, charged on Canadian-to-U.S. dollar conversions (and vice-versa). The currency conversion is necessary when trading U.S.-listed securities in a “core” account.
Alternatively, there’s a premium $10-per-month plan, which lets you hold U.S. currency in your RRSP, TFSA or personal account. With this account, in addition to commission-free trading, you’ll be able to buy and sell U.S. stocks without the worry of foreign exchange (FX) fees.
Wealthsimple Cash is a spending and saving service with a cash-back rewards Mastercard. It provides a secure way to send and receive money with no account or transaction fees and no exchange fees on foreign transactions (aside from the currency conversion itself). You can send or receive up to $5,000 per day, with no limit on the number of transactions and no security questions (you’ll get two-factor authentication for added security).
Additionally, apart from using Interac to transfer money, you can use Cash to send and receive money from other people on the app, by simply sharing your unique handle with them. Unlike some other services for sending and receiving money, Wealthsimple Cash doesn’t require a phone number or email address, so you don’t need to give out your personal information.
You can get a Wealthsimple Cash Mastercard in digital (on your phone) and physical form (in your wallet). With this card, you can make everyday purchases and withdraw funds from ATMs. And what’s more? You earn 1% cash back in the asset of your choosing: stocks, crypto, or cash. The card is essentially a prepaid/secured Mastercard card, so you can use it online or in stores wherever Mastercard is accepted. It is compatible with Apple and Google Pay.
You Cash account is available on the Wealthsimple app and is quick and easy to setup. You’ll have access to a virtual Wealthsimple card immediately, and a physical card will be mailed to you.
Making Wealthsimple’s Cash offer even more attractive is a 3.5% to 4.5% interest rate currently being offered for deposits—and this isn’t a promotional rate. Funds in a Wealthsimple Cash account are protected by the Canadian Insurance Deposit Corporation (CDIC) up to specified limits. You can even get free cash for inviting your friends to use the app.
Read our review of Wealthsimple Cash.
Wealthsimple is an online Canadian financial services provider that offers a suite of low-fee and easy-to-use products including investing, trading, spending and saving. Its suite of services includes a robo-advisor that offers beginners—or investors who prefer to be hands-off with their investments—a choice of three investment portfolios to suit their risk tolerance and financial goals. For DIY investors and traders who want to be hands on with their investments, Wealthsimple offers a discount online brokerage on which investors can trade stocks, ETFs and options. To sweeten the deal for customers, they now also offer spending and saving accounts (Wealthsimple Cash), with a cash back debit card.
Millennial entrepreneur and self-described “boring investor” Michael Katchen launched Wealthsimple in September 2014 as a low-cost, low-effort approach to investing. Since then, CEO Katchen has seen his company transform from a humble Toronto start-up to the largest online-only financial services company in Canada, with more than 2 million clients, $15 billion in assets under management and an international office in New York.
Wealthsimple is primarily owned by Power Corporation of Canada, under the subsidiary Power Financial. The nearly 100-year-old international management and holding company has over $470 billion in assets, including Power Financial, IGM and Pargesa and focuses on insurance, retirement, wealth management and investment businesses, including a portfolio of alternative asset investment platforms. Described as a “Canadian financial giant,” Power Financial also has majority stakes in Great-West Lifeco and Portag3.
The short answer is: Yes. But it’s important that your money be invested in a way that suits your financial goals and risk tolerance. And that’s the case with whichever investment service you choose. Wealthsimple is built to cater to a wide set of clients, so if you don’t need that one-on-one care, but want a simple way to create and build a portfolio with little to no maintenance, then it could be for you.
Another positive: Your Wealthsimple investment accounts are eligible for protection by the Canadian Investor Protection Fund (CIPF), meaning that if Wealthsimple Investments Inc. goes out of business, securities and cash missing from those accounts (not market losses) are eligible for up to $1 million in losses per account type. Wealthsimple Investments Inc. is a member of the Investment Industry Regulatory Organization of Canada.
Wealthsimple is best known for its robo-advisor service, which is a “set-it-and-forget-it” service of low-fee portfolios built using ETFs called Invest. (It was its own app called Wealthsimple Invest, but now can be accessed on the Wealthsimple app under Invest.)
In a nutshell, most ETFs allow you to invest your money across an entire market—such as Canadian stocks, US stocks, high yield bonds, Canadian real estate investment trusts (REITs), etc.—instead of trying to pick and choose the winning companies in each market.
In this way, Wealthsimple provides an easy solution for clients to diversify their portfolios and earn decent returns on their investments over the long term, while taking on the amount of risk that’s appropriate for their investment goals and time horizon.
The company’s other main offerings include a discount brokerage. Again, Wealthsimple Trade is no longer a separate app, but is called Trade. It is a service that allows DIY investors to purchase stocks, ETFs, options and cryptocurrency; and Wealthsimple Cash, which includes spending accounts, saving accounts and a cash back debit card that lets you send, spend or receive money instantly with no fees and 1% back in stock, crypto, or cash on all purchases.
(See above for how each of these services works—and how much they cost).
Wealthsimple clearly makes it easy to invest, trade and manage your cash, with no required minimum amounts, no transaction fees, no trading fees, a user-friendly website and app, and human experts available to help at any time.
There are, however, a few considerations to keep in mind:
Wealthsimple clearly makes it easy to invest, trade and manage your money, with no required minimum amounts, no transaction fees, no trading fees, a user-friendly website and app, and real-life experts available to help.
There are, however, a few considerations to keep in mind:
For Wealthsimple Cash, the no-fee aspect (including no exchange fees on foreign transactions) and 1% back in stock, crypto, or cash on all purchases is appealing. And would-be investors who might otherwise endlessly procrastinate on setting up a portfolio will benefit big-time from Wealthsimple’s robo-advisor service. Investing in a diversified portfolio of low-fee ETFs has historically returned more than bank interest over the long term and is a simple and effective way to keep the purchasing power of your savings from being eroded by inflation.
Similarly, DIY investors who want to buy and trade ETFs and stocks will undoubtedly save money on fees with their commission-free trading service.
On the other hand, managed portfolio clients with larger portfolios may want to consider other robo-advisors that may offer lower fees, and DIY investors who want more investment and account options may consider other discount brokers.
But there’s no question Wealthsimple has a lot going for it.
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Wealtsimple offers LIRA’s (contrary to what was reported) it also offers private credit and private equity options for investing to its premium clients.
Until yesterday, July 31, 2024, I have been pleased with their customer service and efforts to improve their app. Suddenly they locked me out of my account after hours and didn’t unlock the account until after hours the next day, which left me stuck with holdings that dropped sharply on the day and all day. I simply no longer trust them, and to be honest, don’t trust other providers either, having heard many horror stories. Hopefully they will provide some compensation and most importantly, a guarantee that this will never happen again, but I’m doubtful.