Wealthsimple Review 2024 | Better Trading
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Discover the methodologyWith dozens of trading platforms, how do you choose which one is right for you?
In the current economic climate, it can be difficult to grow and maintain your wealth, especially when planning for retirement. Wealthsimple trading platform provides a user-friendly affordable option to both transfer, maintain and invest your funds.
This guide will lay out the costs and benefits of Wealthsimple trading, Wealthsimple charges, and Wealthsimple annual fees and help answer the question of should I use Wealthsimple?
What is Wealthsimple?
Wealthsimple Incorporated is a Canadian online brokerage based out of Toronto. Wealthsimple was founded by Michael Katchen and Rudy Adler in 2014. As of 2021, the firm holds over CAD$15 billion in assets. As a Canadian-based company, Wealthsimple caters to Canadian users by offering many benefits to trading with Wealthsimple in the Canadian market and investing in Canada.
How does Wealthsimple work?
Wealthsimple is an online investment site. It allows users to create an account and make stock and Exchange Traded Funds (EFT) trades on major exchange markets in both the United States and Canada. Wealthsimple does not charge trade fees or commissions. This allows users to trade stocks and EFTs and no cost. They do, however, charge an account management fee and investment expense ratios.
Wealthsimple: our review
Wealthsimple is a good online broker to use for starting investors. It is designed so users can be as hands-on or hands-off as they like because of its passive strategy. It provides access to financial planners to help users learn as they invest. The user chooses their portfolio type based on risk level, how much personal trading they would like to do and their morals and values. They even include halal choices to accommodate Islamic users.
Similarly, users interested in socially-responsible investing can choose to support sustainable industries while growing their investments. They also offer retirement accounts such as RRSP to help users reduce taxes and savings accounts such as TFSA's.
The biggest drawbacks of Wealthsimple trades are the management and USD to CA$ exchange fees. They charge fees on most forms of trading. Some of these fees are waived for Canadian assets and stocks. Wealthsimple trading platform is great for Canadians looking to trade and invest within the Canadian market as most fees are waived.
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Wealthsimple pros:
- No account minimum
- Access to financial advisors
- Free portfolio analysis
- Socially responsible investment options catered to user's choice
- Wealthtrade no commission trading
- Fractional share trading
- EFT trading
- Crypto trading
Wealthsimple cons:
- Account management fees
- Lack of built-in financial tools
- Conversion fees
- US stock and crypto fees
What are Wealthsimple’s fees?
Wealthsimple has different fees depending on the account and services being provided. Please refer to the chart below:
| Wealthsimple account type | Wealthsimple fees |
|---|---|
| Wealthsimple Invest yearly Account Management Fee | 0.5% fee for accounts less than $100,000 and 0.4% on accounts over $100,000 |
| Investment Expense Ratios | Between 0.09% and 0.11% on Standard PortfoliosBetween 0.13% and 0.14% on SRI Portfolios |
| Savings or Cash management account (this account is optional) | 0.25% Management fee |
| Wealthsimple Trade Conversion Fee | Wealthsimple charges a 1.5% currency conversion fee to convert between USD and CAD |
| Wealthsimple Crypto Trade Fee | Wealthsimple charges a 1.5% fee for crypto transactions |
| Wire Transfer Fee | $30 |
| Wealthsimple TSFA Fees | No TSFA fees when trading Canadian assets but a 1.5% on US assets. |
| Wealthsimple ETF Fees | No ETF fees when trading Canadian ETFs but a 1.5% on other ETFs. |
| Wealthsimple Stock Trading Fees | No fees on Candian Stock and EFT transactions |
How does Wealthsimple make money?
Wealthsimple makes money on Wealthsimple Trade through their 1.5% currency exchange fees, and service fees and by offering a premium plan to wave access fees on US stock trades. Wealthsimple Invest makes money by collecting yearly management fees on the funds invested.
What is the difference between Wealthsimple Trade and Wealthsimple Investment?
Several different accounts can be made using the Wealthsimple platform, but let us focus on the difference between Wealthsimple Trade and Wealthsimple Invest. The biggest difference is the amount of control and decision-making the account holder would like.
Wealthsimple Invest
Wealthsimple Invest account is a customized portfolio based on users' desired risk levels and market choices. When a Wealthsimple Invest account is set up users will fill out a survey. At this point, they can choose the environmental impact their investments will make, the industries they are investing in and how risky they would like their investments to be.
Deposits will then be automatically invested in diversified stocks and bonds based on their account choices. This makes it so users have to do little to no personal research determining what stocks to invest in. Wealthsimple charges a 0.5% management fee per year for this account type.
Wealthsimple Trade
Wealthsimple Trade account gives users a much more hands-on approach to trading. Users can make specific stock and ETF trades and can buy and sell stocks at any time. This grants users much more flexibility in their portfolio but also puts them at risk of making poor trading decisions.
Wealthsimple Trade Vs Wealthsimple Invest?
There are pros and cons to both Weathtrade accounts. What is best depends on the user. Weathtrade Invest accounts focus on safer more diversified portfolios for long-term growth while Wealthsimple Trade accounts depend on the user. Weathtrade Invest accounts focus on safer, more diversified portfolios for long-term growth while Wealthsimple Trade accounts offer more choice. A Wealthsimple Trade user may be able to make a larger sum of money on their investment in a shorter period of time but also may lose that money. It will depend on the individual's trading and research habits.
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Can you buy stocks on Wealthsimple?
It is easy to buy the best stocks on Wealthsimple. Users can currently trade in both Canadian and US Wealthsimple stocks. To personally choose which stocks they are trading in they will need to create a Wealthsimple Trade account. Wealthsimple Invest will still be trading in Canadian and US stocks but the trades will be made by Wealthsimple rather than the user. Once your account is set up you will have your Wealthsimple trade portfolio.
One thing that Wealthsimple doesn’t offer is Options Trading. Questrade and Interactive Broker both offer Options trading but be careful as Options are a risky form of trading that is trying to predict the rise or fall of a stock's value.
Can you trade crypto on Wealthsimple?
Yes, Wealthsimple lets you trade crypto.
Wealthsimple also offers a crypto account which allows users to buy or sell 49 different cryptocurrencies. Wealthsimple provides information on each cryptocurrency such as definition, background, environmental impact, and calculated risk of trading in that cryptocurrency. As with stock, crypto currency values fluctuate with the market.
How to Buy Bitcoin and How to by Dogecoin?
Two of the biggest cryptocurrencies on the market are Bitcoin and Dogecoin. To purchase these on Wealthsimple users will first make a Wealthsimple Crypto Account. They will then transfer funds into their crypto account, search for the desired crypto, input the amount of the crypto, and confirm their purchase. Purchasing cryptocurrencies in this way is similar to purchasing stocks. The user will then hold that amount of Bitcoin, Dogecoin or other tokens in their account until they sell it again for CA$ or US$.
Does Wealthsimple have RRSP and TFSA retirement accounts?
Wealthsimple offers both RRSP and TFSA accounts.
One benefit of using Wealthtrade for an RRSP or a TFSA account over a group account is that it gives users control to actively or passively manage their portfolio and control how their funds are invested. Users can decide to put their retirement account into either a Wealthsimple Trade or a Wealthsimple Invest account.
For example, a user could make an RRSP Wealthsimple Trade account to actively deposit and trade funds in their RRSP account, giving them more control over their future retirement funds. These extra charges to income are then automatically reported to the CRA.
Why does Wealthsimple ask for a SIN?
Wealthsimple requires a Social Insurance Number (SIN) to verify the user's identity. It is required to report income tax information to the Canadian Revenue Agency (CRA).
It is safe to give your SIN number to Wealthsimple as they are regulated by the Investment Industry Regulatory Organization of Canada or IIROC with a national bank.
How to transfer money out of Wealthsimple?
To withdraw from Wealthsimple, the user will need to link a chequing or savings account with a Canadian Bank. Only Canadian Dollars can be withdrawn so any US Dollars need to be converted first. Other assets such as stocks, bonds or cryptocurrencies will need to be sold. There are no withdrawal fees on Wealthsimple, but users may pay exchange fees if the money is in USD or other US assets.
How long does it take to withdraw from Wealthsimple?
Good to know
Before withdrawal, any new deposit into the account may take up to 5 days to settle and any asset sold may take two days to settle.
This should be taken into consideration if the money is needed immediately. If you are attempting to withdraw from a Wealthsimple Investing account it can take up to 7 days as the assets will need to be sold, the cash will need to settle and the withdrawal will need to be processed.
| Account action | Delay |
|---|---|
| New deposit | 5 days |
| Asset sold | 2 days |
| Withdraw from a Wealthsimple Investing account | 7 days |
Wealthsimple how long to transfer funds?
Transferring funds takes time and can take longer depending on how you’re transferring the funds and where it is coming from. If a user is transferring funds from a checking or savings account it will take up to 5 days for the funds to settle. During this time the funds can not be accessed, withdrawn, or moved. If a user is trying to transfer an existing account into Wealthsimple from another financial institution it can take between 1 to 4 weeks. If your account transfer is flagged or rejected it can take 6 to 8 weeks.
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Which is better Questrade or Wealthsimple?
Questrade and Wealthsimple are similar financial service companies but cater to two different kinds of users. With a Wealthsimple Investment account, users can deposit funds and trust Wealthsimple to invest their stock portfolio according to their account preferences. While users can do more personal trading and invest with other Wealthsimple accounts, users are still limited to Canadian and US-listed stock and ETFs. Questrade users on the other hand can buy and sell mutual funds, options, bonds, international equities outside the US and precious metals. This allows users a greater ability to invest and diversify.
Good to know
Want to explore this question further? Read our Questrade or Wealthsimple comparison.
How do I contact Wealthsimple?
Wealthsimple can be contacted by chat or email 24/7
By phone 8 am to 8 pm Monday through Friday or 9 am to 6 pm Saturday and Sunday (EST)
- Email: Email Request
- Phone: 1-855-255-9038
- In-App 24/7 chat
- Twitter: Wealthsimple
How to close a Wealthsimple account?
There are several steps to fully closing out a Wealthsimple Account:
- First, cancel and pending deposits
- Liquidate or transfer all non-cash assets to other financial accounts
- Withdraw all funds to a bank account or other financial institution
- Cancel and auto-deposits
- Cancel and pay any outstanding orders
- Turn off roundups from purchases
- Wait until all the transactions have been processed
When your account balance is CA$0, login, go to settings, choose the profile, click delete the profile, confirm and your account is closed. The Government of Canada requires all financial institutions to keep users' information on record for 7 years. During this time your information will still be in Wealthsimples records.
