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Technology has changed how the financial industry works in many ways. Brokerage firms have been forced to slash their commissions, insurers are now processing and paying claims instantly, and loans are being granted in a matter of minutes through the use of technological tools such as artificial intelligence and websites.
The asset management and banking spaces have not escaped from this trend, and Wealthsimple is progressively positioning itself as a top choice among investors in Canada who would like to improve how they manage their personal finances.
In this article, we provide a thorough review of this financial services provider that will cover several aspects of the company, including what it does, how long it has been in business, and how its products have performed over time.
✎ Important Notice
On March 4, 2021, Betterment acquired the U.S. side of Wealthsimple’s operations. As a result, Wealthsimple transferred all of their existing U.S.-based customers to Betterment and will no longer support accounts based in the U.S.
Bottom Line: Wealthsimple is an online investment service that uses technology to make investing simpler, smarter, and low-cost. Wealthsimple offers an array of services, including a robo advisor, crypto trading, and fractional shares investing.
|Types of accounts supported||
|Features and tools||
|Ease of use||
What is Wealthsimple?
With over $8.4 billion in assets under management (AUM), Wealthsimple is a company in the money management and personal finance space that offers investment solutions and banking products. It was founded in 2014 by four entrepreneurs, and it is headed by Mike Katchen, a former McKinsey & Co. analyst.
The firm seeks to disrupt the financial industry by lowering fees and account minimums so more and more people can have access to the products and services that have been typically reserved for the elite.
The company is headquartered in Toronto, Canada, and its services are offered primarily to Canadian residents.
How Does Wealthsimple Work?
There are three sides to Wealthsimple that users should know of. First, there is the investing side, which consists of a self-directed and guided investing solution. There is also the banking side, in which the company provides access to a savings/spending account that charges no fees.
Finally, Wealthsimple also helps users with their tax returns through free software that performs all the required calculations without any paperwork involved. In this section, we provide further details about the firm’s services and fees.
Reducing the minimum deposit required to open an account or enjoy its services is one of the goals of Wealthsimple. To live up to that promise, the company demands the minimum possible deposit to access most of its products.
For the Invest product, users can start trading stocks and other financial instruments with as little as $1. Meanwhile, the guided investing solution can be accessed by depositing $1 as well — at least the Basic version. For the Black and Generation tiers of this service, the minimums go up to $100,000 and $500,000, respectively.
Finally, there is no account minimum required to either open or maintain a spending account with this provider.
Types of Accounts Supported
Wealthsimple currently supports 10 types of accounts. These accounts can be classified based on what kind of service customers can have access to when they open them.
- Personal account: This is a taxable account with no deposit or withdrawal limits.
- Tax-free savings accounts: This is Canada’s equivalent to an IRA in the US. It is an account that defers the payment of taxes, and that can be used to save and invest money.
- Registered Retirement Savings Plan (RRSP): An account specifically designed to help individuals save money for their retirement by supporting tax-deductible contributions. An RRSP account can also be used to buy a home or invest in education.
- Spousal RRSP: It works similarly to an individual RRSP, but it allows couples to combine their retirement savings and reduce the tax burden resulting from opening two individual RRSPs if the couple’s income is very different.
- Locked-In Retirement Accounts (LIRA): A type of account that allows investors to transition to an employer-sponsored retirement account so the funds can be invested by the Wealthsimple team and withdrawn once the person turns 71 years old. No additional contributions can be made to this account.
- Crypto: The crypto account provides users with access to the crypto market. This is a taxable investment account.
- Registered Education Savings Plan (RESP): Investors can contribute up to $2,500 per year to this account to set money aside for their child’s education.
- Save or Joint Save Account: A savings account that pays a 1.5% annual interest and that charges no monthly or ATM fees. It can be used to set money aside for future expenses or as an emergency fund. The account is insured by the Canada Deposit Insurance Corporation (CDIC) for up to $100,000.
- Spend: This account entitles the holder to receive a Wealthsimple Card to spend money for everyday purposes. It offers a 1% cashback reward on eligible transactions and can be used to send money to friends and family and pay bills.
Businesses in Canada can open either a Save or non-registered investment account (Crypto account included) for their companies.
Wealthsimple Membership Plans
Wealthsimple’s self-directed trading solution allows investors to buy and sell thousands of Canada and US-listed securities, including stocks and ETFs. Users can enroll for any of these two memberships to enjoy the service.
- Basic: The Basic membership allows users to trade up to $1,500 instantly and charges no commissions or fees for trading Canadian securities. This membership is free, and users are allowed to trade fractional shares and receive an unlimited number of price alerts. Certain fees apply for trading US-listed instruments.
- Plus: The Plus package extends the instant deposit limit to $5,000 and waives the FX fees involved when trading US-listed securities. The cost of this membership is $10 per month.
Wealthsimple also offers a guided investing solution that can be accessed through three different membership plans. This service is also known as a robo-advisor as it uses an algorithm to determine the best portfolio allocation for all investors based on their unique financial goals, risk tolerance, income, employment situation, and other similar factors. These are the membership plans that are currently available for this solution:
- Basic: This is an entry-level membership. It requires a minimum deposit of just $1. Wealthsimple charges a 0.5% management fee to Basic members.
- Black: The minimum deposit for this membership increases to $100,000, but the management fee is lowered to 0.4%, and there are additional benefits, including access to the tax-loss harvesting feature and discounts on estate planning consultations.
- Generation: This is the top-tier membership offered by Wealthsimple. To access this bracket, investors must deposit at least $500,000 into their investment accounts. Generation members have access to personalized investment advice by a human, tailored portfolio allocations, and the same discounts and perks that Black members get. The management fee is also 0.4% for this membership.
Getting Started With Wealthsimple
- Step 1: Opening an account with this provider is quite simple and starts by clicking the black and white “Get Started” button located at the upper right corner of Wealthsimple’s official website.
- Step 2: The user will then be prompted to provide an email and password and may opt in or out of receiving the firm’s newsletters and information concerning his/her account.
- Step 3: The user will have to choose the specific product they would like to sign up for. They will have the alternative to enroll in other services or programs later on if they would like to sign up for more than one.
- Step 4: Answer the questions made by the system. The purpose of this questionnaire is to assess the client’s financial goals, risk tolerance, financial situation, and other similar factors.
- Step 5: In the case of the guided investing solution, the system will automatically recommend which portfolio allocation suits the customer the best based on the answers he provided.
- Step 6: If the user opts to enroll in the Invest program, they will have the possibility of linking their bank account to make an initial deposit. This process can take up to five business days.
Wealthsimple Features and Tools
Now it is time to dig deeper into what this financial services provider has to offer in terms of products and solutions. In this section, we will browse through the different characteristics of these offerings, the costs involved, and their main benefits.
|Fees||$0 to 100k — 0.50% Annual Fee and $100k+ — 0.40% Annual Fee|
|Account Types||Taxable, Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA), Spousal RRSP, Lock-In Retirement Account (LIRA), Registered Education Savings Plan (RESP)|
|Platform||Mobile (iOS / Android) and Web-based|
|Assets Under Management||Over $8.4 billion|
|Promotion||Get a $50 bonus (*when you open and fund your account with $500 or more).|
|Socially Responsible Investing|
|Support||Live Chat, Phone (1-855-255-9038) and Email|
The Invest service is Wealthsimple’s bread-and-butter offering. Investors can use this solution to build investment portfolios either by themselves or with the help of the firm’s robo-advisor.
The Managed Investing solution is the guided alternative offered by Wealthsimple for customers who prefer to adopt a hands-off approach when investing their money.
The service works as a robo-advisor, meaning that algorithms will determine which portfolio allocation suits each customer the best after they have responded to certain questions made during the onboarding process.
There are three basic allocations available (conservative, balanced, and growth) and two niche portfolios — the socially responsible investing portfolio and the Halal portfolio.
Users can choose between three membership plans based on how much they are willing to deposit into the investment account. These are the Basic, Black, and Generation plans. Management fees for the Managed Investing solutions start at 0.5% per year. The minimum deposit required to enroll for the Basic account for this service is $1.
As the name suggests, this portfolio is the simplest of all. You can start from $0 and go as high as $100,000. The company charges only 0.50% management fee.
The portfolio offers a range of services, including:
- Automatic deposits
- Tax-loss harvesting
- Dividend reinvesting
- Human financial advice
- A personalized portfolio
You can set up a Basic Portfolio in the following ways:
- Growth Portfolio: 20% bonds and 80% stocks
- Balanced Portfolio: Divided equally between bonds and stocks.
- Conservative Portfolio: 35% stocks and 65% bonds.
All these options have their own benefits. You can ask advisors for the right option according to your requirements if you plan on deciding and building your own portfolio.
There are 10 ETFs under this option. Here are the details:
|US Mid-Cap Value||Vanguard Mid-Cap Value ETF||VOE||All|
|US Stocks||Vanguard Total US Market ETF||VTI||All|
|Foreign Stocks||Vanguard FTSE Europe ETF||VGK||All|
|Foreign Stocks (exporter & dividend tilt)||WisdomTree Japan Hedged Equity Fund||DXJ||All|
|US Small-Cap Value||Vanguard Small-Cap Value ETF||VBR||All|
|Municipal Bonds||iShares National Muni Bond ETF||MUB||All taxable accounts|
|USD Govt and Corporate IG Bonds (includes EM)||Vanguard Total Bond Market ETF||BND||All|
|Emerging Market Stocks||Vanguard FTSE Emerging Markets ETF||VWO||All|
|US Inflation Protected (TIPS) Bonds||iShares TIPS Bond||TIP||Conservative, Balanced|
|High Yield Bonds||VanEck Vectors Fallen Angel High Yield Bond ETF||ANGL||Conservative, Balanced|
The method to construct a portfolio is similar, whether taxable or retirement portfolio. However, there is a difference between the two — retirement accounts do not include municipal bonds as they are anyway tax-deferred.
This portfolio is designed for big investors. You can start for as low as $100,000 with no end limit.
It may be a good idea to try this portfolio as it brings down the management fee to 0.40%. This is a difference of 0.10%, but it can be a lot when you have millions in an account.
This program offers all features that the Basic Portfolio does, but you will also enjoy some additional features. These include:
- A financial planning session with an experienced advisor to discuss your goals.
- You enjoy more tax advantage under this platform thanks to the use of tax-efficient funds to build your portfolio.
- VIP access to over 1,000 airport lounges. The service is available in more than 400 cities and enables you and your companion to enjoy a comfortable airport stay.
The Portfolio is constructed in the same manner as the Basic Portfolio. You can choose from Conservation, Balanced, and Growth portfolios.
Socially Responsible Investing Portfolio
This portfolio is designed for users who want to invest in companies that are known to be socially responsible. As a result, you will be investing in companies that have the following characteristics:
- Gender diversity
- Low carbon emissions
- Support for affordable housing
The Portfolio is constructed in the same manner as the other two options. You can choose from Conservation, Balanced, and Growth portfolios.
The following ETFs are included as part of the SRI portfolio:
- Wealthsimple North America Socially Responsible Index ETF (WSRI): Canadian and American stocks that do not violate social and environmental values.
- Wealthsimple Developed Markets ex-North America Socially Responsible Index ETF (WSRD): European, Australian, and Asian stocks that do not violate social and environmental values.
- Wealthsimple North America Green Bond ETF (WSGB): Green and social bonds, which provide fixed income exposure and directly fund projects linked to environmental and social causes
- BMO Long Federal Bond Index ETF (ZFL): Long-term debt securities issued or guaranteed by the Government of Canada.
- SPDR Gold MiniShares Trust ETF (GLDM): Shares tracking the value of physical gold bars held in London vaults.
The commission for managing the SRI portfolio is the same as for the non-SRI portfolios at 0.40% to 0.50% per year (depending on your balance). Keep in mind that the ETF fees that make up this portfolio are higher than the fees for regular ETFs—a weighted average of 0.22%, compared with 0.1% to 0.2% for regular Wealthsimple portfolios.
Halal Investing Portfolio
This portfolio is designed for the Muslim population. It follows Sharia law to make decisions. For example, Islamic principles of investing prohibit bonds. Hence the portfolio consists of only stocks.
While it is a great feature as it allows the company to reach a wider audience, it’s not available for individual investors. It’s a single portfolio that consists of companies that follow Islamic law.
The Halal portfolio includes a mixture of gold, non-interest-bearing cash (depending on your risk tolerance), and Wealthsimple’s Shariah-compliant Wealthsimple World Equity Index ETF (WSHR). The top ten holdings of the WSHR ETF include:
- 1. Nestle SA, 1.0% allocation
- 2. Hong Kong & China Gas Co Ltd, 1.0% allocation
- 3. CLP Holdings Ltd, 0.9% allocation
- 4. Givaudan SA, 0.9% allocation
- 5. Beiersdorf AG, 0.9% allocation
- 6. Waste Connections Inc, 0.9% allocation
- 7. McDonald’s Holdings Co Japan Ltd, 0.8% allocation
- 8. Wolters Kluwer NV, 0.8% allocation
- 9. Singapore Telecommunications Ltd, 0.8% allocation
- 10. SGS SA, 0.8% allocation
Since there are no bonds involved, this portfolio carries a higher risk than other options. The fee for this fund is 0.50% per year, which falls down to 0.40% per year when the balance goes above $100,000. The fee for the gold ETF is 0.18%, and the fee for the equity ETF is 0.50%.
This is mainly for big investors and requires a minimum balance of $500,000. The management fee is only 0.40% with some additional perks, including:
- Access to a team of advisors.
- A personalized report of your account
- In-depth financial planning
- Tailor-made portfolios
- Asset location
- 50% off a Medcan health plan
- All Black Portfolio benefits
Wealthsimple has made available a banking product that allows users to both save and spend easily and without any hidden or hefty fees involved.
Wealthsimple offers a spending account that offers cashback rewards of up to 1% in either crypto, stock, or cash. The account entitles the holder to receive a debit card for their daily purchases.
This account charges no monthly fees, does not require a minimum and is free of FX fees as well. The Wealthsimple Spend account can be used to pay bills, send transfers, and make deposits to other accounts.
Moreover, the account is insured by the Canadian Deposit Insurance Corporation (CDIC) for up to $100,000.
Wealthsimple’s spending account offers rewards of up to 1% in either crypto, stock, or cash when using the Wealthsimple Card.
Users can withdraw money from ATMs both in and outside of Canada without incurring a fee, and it is issued by the People’s Trust Company and licensed by Visa. The card has transaction limits of $5,000 per day and $3,000 per withdrawal in points of sale (POS). There is also a maximum limit of $20,000 per month for these transactions.
In addition, one-time ATM withdrawals are capped at $500, while the maximum limit of withdrawals within 30 days is $5,000.
Finally, the crypto investing solution of Wealthsimple is Canada’s first regulated crypto trading platform. Through it, the company provides access to over 50 crypto assets, including Bitcoin, Ethereum, and Dogecoin.
This broker charges a 1.5% to 2% operational fee applicable to each transaction. There is no minimum deposit required to open an account, and Wealthsimple offers instant trading for deposits of up to $5,000.
With this solution, users have the possibility of depositing and withdrawing crypto assets into and from the account free of charge, and they can enjoy features such as limit buy orders, a news feed with up-to-date articles about the crypto market, and a seamless trading experience.
The assets held with this broker are insured, and the majority of them are put in cold storage.
Wealthsimple offers its customers a service that facilitates the task of filing their annual income tax returns. The service is completely free, and all the required information can be sent online. However, users can leave the platform a tip if they feel they are well-serviced.
The company seems to be so confident about the outstanding results its automated tax filing service can achieve that it offers a money-back guarantee of up to $50 if the customer can calculate the income tax in a way that leads to a higher refund from the Canadian tax authority.
Thus far, Wealthsimple claims to have helped more than one million Canadians file their taxes. It also states that users can receive a refund in as little as eight days if they use direct deposit as their preferred payment method.
The self-directed trading platform offers access to thousands of stocks and exchange-traded funds (ETFs) listed in Canada and the United States, with no minimum deposit required to open an account.
This solution allows investors to build investment portfolios without the assistance of an advisor (human or otherwise), and no commissions are charged for trading the instruments supported by the platform.
By selecting the Basic or Plus version of the service, users will determine the upper limit of their trading activities and may opt to waive the FX fees involved when trading US-listed securities if they go with the Plus package.
Stock and ETF Trading
Stocks and exchange-traded funds (ETFs) listed in both Canada and the United States can be traded by using Wealthsimple’s self-directed trading solution. Depending on which package users choose to enroll in, they can instantly trade up to $5,000.
Wealthsimple provides access to instruments listed in the TSX, NYSE, NASDAQ, NEO, and CSE exchanges. In addition, a limited number of instruments listed in the BATS exchange are also available.
The firm offers zero-commission trading for Canadian securities, and there are no account minimums required. In addition, the Plus service supports unlimited trading for US-listed stocks.
Fractional Share Investing
Fractional shares allow investors to buy a portion of a financial instrument — either a stock or an ETF, in this case.
This product is an excellent alternative for investors who have a limited investment budget, as they can build highly diversified portfolios without having to deposit thousands of dollars into their accounts.
Fractional shares entitle the holder to receive dividends but do not give them voting rights on the company’s affairs. The value of the fractional share fluctuates in proportion to that of the common stock or ETF, and the position will experience the same fluctuations as the underlying instrument.
At time of writing, Wealthsimple supports fractional shares for over 1,500 stocks, including large tech corporations such as Amazon (NASDAQ: AMZN) and Netflix (NASDAQ: NFLX). In addition, they also support this feature for four Canadian stocks, including Shopify (NYSE: SHOP) and Royal Bank of Canada (NYSE: RY).
Wealthsimple Portfolio Construction
The managed investing solution of Wealthsimple works as a robo-advisor that provides portfolio recommendations to investors depending on their risk tolerance, financial goals, and other similar factors.
The algorithm is designed to create highly diversified portfolios made up of six different types of financial assets. These assets are gold, bonds, defensive equity, emerging market securities, foreign stocks, and Canadian & US stocks.
Based on the investor’s individual profile, the robo-advisor could suggest three different types of portfolios. Here we summarize the most relevant characteristics and performance of each of these alternatives.
- Conservative: This portfolio has an equity allocation ranging from 30% to 40% and a 37.5% allocation on Canadian aggregate bonds. According to Wealthsimple, the portfolio has produced a one-year loss of 12.17% as of October 7, 2022, and has produced a 12.1% gain since its inception on August 20, 2014. The annualized return since inception stands at 1.42%.
- Balanced: The balanced portfolio allocates 50% of the investor’s assets into equity instruments and 26% into government bonds. According to Wealthsimple, the portfolio has produced one-year losses of 12.2% as of October 7, 2022. Moreover, the portfolio has produced total gains of 20.4% since its inception on August 20, 2014, resulting in annualized returns of 2.31%.
- Growth: The growth portfolio allocates from 75% to 90% of the investor’s assets into equity instruments. According to Wealthsimple, the portfolio has produced one-year losses of 12.8% as of October 7, 2022. Moreover, the portfolio has produced total gains of 43.3% since its inception on August 20, 2014, resulting in annualized returns of 4.53%.
Wealthsimple offers an alternative portfolio for individuals who would like to invest their money in a way that complies with Islamic laws. To achieve this, every instrument incorporated into the Halal portfolio is screened by a committee of Shariah scholars.
In addition, the companies that issue the instruments that comprise the portfolio are not engaged in any of the activities that are considered forbidden by Shariah law such as gambling and the production or commercialization of tobacco and alcohol.
The robo-advisor can also suggest three portfolio alternatives based on the investor’s financial goals and risk tolerance. This is a summary of the performance and composition of each of these three alternatives:
- Conservative: This portfolio includes a mix of gold, non-interest-bearing cash, and an equity-focused ETF that complies with Shariah law. According to Wealthsimple, the portfolio has produced a one-year loss of 6.25% as of October 7, 2022 and has produced a 10.25% gain since its inception on August 23, 2017. The annualized return since inception stands at 1.93%.
- Balanced: This portfolio includes a mix of gold, non-interest-bearing cash, and an equity-focused ETF that complies with Shariah law. According to Wealthsimple, the portfolio has produced one-year losses of 8.14% as of October 7, 2022. Moreover, the portfolio has produced total gains of 16.3% since its inception on August 23, 2017 resulting in annualized returns of 3%.
- Growth: This portfolio includes a mix of gold and an equity-focused ETF that complies with Shariah law. According to Wealthsimple, the portfolio has produced one-year losses of 10.75% as of October 7, 2022. Moreover, the portfolio has produced total gains of 28.48% since its inception on August 23, 2017, resulting in annualized returns of 5.03%.
Socially Responsible Investing (SRI)
Wealthsimple is aware that investors are more conscious than they have ever been about what kinds of activities their money is financing. To cater to this growing audience, this broker has created socially responsible portfolios that invest in companies that comply with the highest ESG standards.
What perhaps takes things up a notch in the case of Wealthsimple’s SRI portfolios is that the company screens out businesses that are among the top quartile in terms of carbon emissions within their particular industries, while the companies that make it to the portfolio must also have at least three women in their Board of Directors.
The robo-advisor can also suggest three portfolio alternatives based on the investor’s financial goals and risk tolerance. This is a summary of the performance and composition of each of these three alternatives:
- Conservative: This portfolio invests roughly 70% of the assets into gold and bonds and the remaining 30% into both domestic and international equities. According to Wealthsimple, the portfolio has produced a one-year loss of 16.26% as of October 7, 2022 and has produced a 7.13% gain since its inception on March 24, 2016. The annualized return since inception stands at 1.06%.
- Balanced: This portfolio invests roughly 50% of the assets into domestic and global equities and the remaining funds into gold and bonds. According to Wealthsimple, the portfolio has produced one-year losses of 16.97% as of October 7, 2022. Moreover, the portfolio has produced total gains of 14.4% since its inception on March 24, 2016 resulting in annualized returns of 2.08%.
- Growth: This portfolio invests 80% of the assets into domestic and global equities and the remaining portion into bonds and gold. According to Wealthsimple, the portfolio has produced one-year losses of 17.93% as of October 7, 2022. Moreover, the portfolio has produced total gains of 31.12% since its inception on August 23, 2017, resulting in annualized returns of 4.24%.
One of the positive aspects of Wealthsimple is that the company is fairly transparent and straightforward with how much they charge and how they make money when the products and services they offer do not generate revenues in the traditional way.
Managed Portfolio Fees
Wealthsimple charges a percentage fee for the use of its robo-advisor. The fee varies depending on how much money the user deposits. For accounts with less than $100,000, the firm charges a flat annual fee of 0.5%. Meanwhile, the fee declines to 0.4% for accounts with a balance that exceeds this amount.
The cost of Wealthsimple’s self-directed trading services varies depending on which subscription package the user chooses. The Basic tier is free, but fees apply to trades involving US-listed instruments such as FX fees.
Meanwhile, the Plus package costs $10 per month and waives both of these fees while it also increases the amount that can be instantly available for trading after making a deposit.
Wealthsimple charges a flat operational fee for trading crypto ranging from 1.5% to 2% of the value of the trade order. This provider does not charge any fees for withdrawing or depositing money or assets into an account.
Wealthsimple Customer Support
Wealthsimple has a help center that contains answers to the most frequently asked questions that users make before enrolling on the platform or in case they run into an issue when using any of its services.
The help center contains information about topics including investing, taxation, money management, profile settings, and platform onboarding.
Aside from that, users can reach out to a human representative from Monday to Sunday by phone or live chat. Before chatting with a representative, the user will have to go through some questions made by Wealthsimple’s virtual assistant to see if there is content available that can answer his/her questions or solve the issue.
Email support is also available. It typically takes 24 to 48 hours to get a representative to answer any virtual correspondence sent to the company. Finally, in case there is a formal complaint, there is a specific team the company has assembled to handle these cases. The process starts by sending an email or writing a specific address.
Despite these many alternatives to reach out to a representative of the firm to solve an issue, Wealthsimple reviews in Trustpilot give it 2.6 stars out of 5. This is the equivalent of a “Poor” rating.
Meanwhile, the firm’s ratings and track record with the Better Business Bureau (BBB) aren’t too good either, as they have received 1.5 out of 5 stars from a total of six reviews and have also processed 17 complaints from users in the past three years. It is important to note that the business is not accredited by the BBB.
Wealthsimple User Experience
Wealthsimple offers a relatively basic trading experience as its platforms were designed with beginners in mind. For those who are looking for more advanced systems to test strategies, analyze charts, or trade derivatives, this is perhaps not the most suitable brokerage firm to choose.
Customers who opt for the Basic plan of the self-directed trading service do not have access to the full range of features that the platform includes. However, Plus subscribers will have the chance to set up price alerts, notifications for specific instruments, and real-time price quotes.
For charting purposes, only line charts are available, while the platform does not support any kind of drawing. All of these features are available in the web version of the platform.
The apps have limited features compared to some of Wealthsimple’s competitors. The one for trading supports most of the features available in the web version and includes the possibility of setting up a watchlist.
The Android version of the app has received a 4.4-stars rating in the Google Play Store from a total of 64,100 reviews. It has been downloaded over a million times. Meanwhile, the iOS app has received a 4.7-stars rating out of 123,400 reviews.
Wealthsimple keeps both its users’ data and money safe in many ways. First, the company offers a two-step verification (2FA) system to prevent unauthorized access to a person or company’s account. This protocol can be easily set up and works with either an SMS or email message confirmation or with an app like Google Authenticator.
Meanwhile, the data handled by the company is encrypted by using a 256-bit SSL/TLS protocol, and there are also internal safeguards that prevent third parties from accessing the company’s database. The users’ data is also backed up in the cloud — not physically.
Wealthsimple also owns a subsidiary that acts as a custodian for the equities and other financial instruments held with the firm. This company — Wealthsimple Investments — is an IIROC Dealer Member and a participant of the Canadian Investor Protection Fund (CIPF) that covers $1 million for all general accounts including cash, margin, and tax-advantaged.
As for crypto assets, the company has a commercial, criminal insurance policy that covers an aggregate amount of up to $200,000,000. The policy covers the theft of any cryptocurrencies held by Wealthsimple either as a result of a hack or insider work.
Wealthsimple Educational Resources
Wealthsimple advocates for financial literacy among its clients and has created different types of materials to inform them about relevant topics associated with their financial well-being.
The Wealthsimple Magazine is one of those initiatives. This is a blog that is continually updated with articles related to investments, the state of the global economy, and the latest developments in the financial markets that can impact the performance of an investment portfolio.
Moreover, the Personal Finance 101 section of the company’s website covers basic topics related to investments and money management through short articles. Some of the topics that are addressed by these materials include crypto investments, taxation, savings, and retirement planning.
Finally, Wealthsimple offers an income tax calculator to facilitate the task of filing tax returns once the fiscal year ends. Users can choose the province in which they live, and the system will rapidly adjust the estimations for that particular area based on the applicable average and marginal tax rate.
The calculator also provides information on the prevailing tax rates for different income levels and provides explanations about how certain income items must be treated.
Wealthsimple Pros Explained
- No Minimum: This is the biggest benefit of the service. You can start with any balance, as there are no minimum balance requirements.
- Multiple Products: Wealthsimple is a Canadian brokerage firm that offers access to a wide range of personal finance and investment solutions and products.
- Protection: The company is registered with the country’s authorities, and its banking and investment accounts are insured.
- Low Barrier To Entry: An account can be opened with as little as $1.
- Access To American Markets: This broker provides access to both the Canadian and US stock market.
- Automated: The automated investing solution is a perfect fit for people who prefer to take on a hands-off approach when building a portfolio.
- Multiple Account Types: Different types of accounts are available, including taxable, tax-advantaged, and crypto.
- Educational Resources: The educational materials provided by the broker are quite useful for people who know little about the financial markets.
- Access To Experts: This feature is great as it gives you peace of mind and allows you to get your questions answered.
- Socially Responsible Portfolio: This gives Wealthsimple an edge over some competitors, as very few robo advisors offer this option.
Wealthsimple Cons Explained
- Reputation: The company’s online ratings are not the best.
- Performance: The performance of the robo-advisor’s portfolios since inception is not particularly attractive at the moment this is written.
- Limited Tax Loss Harvesting: The tax-loss harvesting feature of the automated investing solution is only available for users who subscribe to the premium packages.
Other companies offer similar services to Wealthsimple. In this section, we cover the similarities and differences between this provider and another two – Questrade and Wealthfront.
Wealthsimple vs. Questrade
Questrade is also a Canadian brokerage firm that offers similar products and services to Wealthsimple, such as access to a self-directed trading platform, a managed investing solution, and multiple accounts that users can choose from.
Moreover, this provider charges relatively low fees for trading both Canadian and foreign instruments. Stock trading fees, for example, start at 1 cent per share, while users can buy exchange-traded funds (ETF) for free.
There are a few things that make Questrade stand out from Wealthsimple. First, the firm offers access to a wider range of financial instruments including forex pairs, options, bonds, initial public offerings (IPOs), and even contracts for difference (CFDs).
In addition, the platform offers more advanced features for seasoned traders via premium subscription packages that provide access to level 1 and level 2 data for options in both the United States and Canada.
That said, the firm does not provide access to cryptocurrency trading, and its management fees for the managed investing solution are similar to those charged by Wealthsimple, starting at 0.25% per year.
Finally, Questrade does not offer any type of cash management solution for people who prefer to use a single provider for everything related to their personal finances.
Wealthsimple vs. Wealthfront
Wealthfront is a financial services firm that provides its services to United States residents only. It offers similar solutions to Wealthsimple such as bank and investment accounts and a robo-advisor for building portfolios in a matter of minutes.
What makes Wealthfront different is that it does not offer a self-directed trading solution, as the company prefers to encourage long-term investing rather than trading. Moreover, Wealthfront clients can borrow money from the firm by using the balance of their investment portfolio as collateral. This is a product that Wealthsimple is not yet offering. Read our full Wealthfront review to learn more.
|Fees||Less than $100k — 0.5%/yr; and more than $100k — 0.4%/yr||0.25%/yr||0.25%/yr|
|Promotion||Get a $50 bonus (*when you open and fund your account with $500 or more).||Get $5,000 managed for free (*new accounts)||None|
|Highlight||Access to human advisors||Automatic rebalancing included with basic plans||Multiple portfolio options and customization|
|Best For||Socially responsible investors||Passive investors||Hand-off investors|
Who Is Wealthsimple Best for?
Wealthsimple is, first and foremost, for Canadian residents only. Meanwhile, the company’s services are a better fit for beginner investors who either adopt a buy-and-hold strategy when building an investment portfolio on their own or prefer to hand over that task to a professional — in this case, a system that recommends the best portfolio for the client’s unique preferences and goals.
Notable Wealthsimple Updates and News
- In June 2022, Wealthsimple announced a new iteration of its app, allowing users to access all their investments, i.e., stocks, ETFs, crypto, cash, and managed portfolios, from a single app.
- Wealthsimple was previously available to clients in the United States. However, in March 2021, the company sold its U.S. book of business to an American financial company called Betterment back in March 2021 and no longer offers accounts to U.S. citizens.
- On December 2021, Weakthsimple introduced “Plus,” allowing Canadian users to invest in U.S. stock with as little as $10.
We’ve found some of the most frequently asked questions with regard to Wealthsimple, here are our answers.
No. This company no longer offers accounts for U.S. citizens. Only Canadian residents are allowed to open a Wealthsimple account.
Wealthsimple makes money in many ways. First, they collect FX fees from clients who transact with U.S. stocks and have not subscribed to the Plus package. Moreover, the company also charges a trading fee ranging from 1.5% to 2% on all crypto transactions.
Meanwhile, the managed investing product generates management fees for the firm as well, and the program bank used by Wealthsimple to offer its savings and checking account may also compensate the firm for attracting deposits.
Yes. Users are allowed to withdraw their crypto holdings free of charge.
Yes. Wealthsimple is a good fit for beginner investors in Canada, whether they want to build an investment portfolio on their own or if they prefer to let a company do the heavy lifting for them. In addition, the company’s banking products are quite attractive, and the accounts are insured by the CIPF.
Wealthsimple allows users to incorporate a 2FA security checkup to protect their account from being accessed by unauthorized parties and encrypts all the information shared through the internet. In addition, the firm’s crypto holdings are insured for up to $200 million, and the bank and investment accounts offered by the firm are also insured by the correspondent financial institutions in Canada.
Are you looking for a fintech company that offers zero-fee banking products and investment solutions for Canadians? Wealthsimple is one of the best alternatives in the market. Even though their online customer reviews are not the best, nothing suggests that this firm is not safe, and its services appear to be quite similar to those provided by its American rivals — i.e. self-directed trading, managed investing, and crypto trading, etc.
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Alejandro is a financial writer with 7 years of experience in financial management and financial analysis. He writes technical content about economics, finance, investments, and real estate and has also assisted financial businesses in building their digital marketing strategy. His favorite topics are value investing and financial analysis.