Questrade vs. Wealthsimple Review 2021

questrade-vs-wealthsimple

Questrade vs. Wealthsimple: two of the most popular online investment platforms in Canada today. They both claim to save their customers thousands of dollars in fees and offer a completely online interface through which to invest your hard-earned dollars.

That said, there are some critical differences between Questrade and Wealthsimple. In this comparative analysis, Wealth Rocket hopes that our Wealthsimple vs. Questrade review will help you choose which of these two acclaimed online investing platforms is the right choice for your money.

First, let’s discuss how each of these online brokerages works, starting with Wealthsimple, followed by Questrade.

Table of Contents

Comparison Questrade Wealthsimple
Products Questrade, Questwealth Portfolios Invest, Trade, Cash, Crypto, Tax
Account options Registered & Non-Registed Registered & Non-Registed
Investing Options Stocks, fixed income, ETFs, mutual funds,
options, new issues, foreign exchange,
precious metals, contract for differences (CFDs)
Stocks, ETFs, Crypto
Fees
  • ETF MER: 0.25% - 0.35%
  • Stock Trading Fee: 0.1¢ per trade, $4.95 trading minimum
  • ETF MER: 0.4% - 0.5%
  • Stock Trading Fee: None for Canadian stocks, 1.5% for US stocks
  • Crypto Trading Fee: 1.95% selling fee
  • Minimum Investment $1,000 None
    Platforms Web, Desktop, iOS, Android Web, Desktop (Beta), iOS, Android
    Available in Quebec? Oui! Oui!

    Wealthsimple: Overview

    Wealthsimple is a financial platform that offers five financial products: Wealthsimple Invest, a robo-advisor, Wealthsimple Trade, an online brokerage, Wealthsimple Crypto, a cryptocurrency trading platform, Wealthsimple Tax, a tax-filing service, and Wealthsimple Cash, a hybrid savings account.

    However, we’ll focus primarily on Wealthsimple Invest, it’s robo-advising service.

    Wealthsimple Invest uses algorithms to automatically (and inexpensively) invest your money in a diversified portfolio of low-cost index funds.

    Their technology helps you earn a competitive return while optimizing your tax bill, automatically rebalancing your portfolio to suit your target risk tolerance, and reinvesting your dividends for future returns.

    When you sign up for Wealthsimple, you’ll complete a short questionnaire that automatically chooses between several pre-built portfolios. When you fund your account and make future contributions, Wealthsimple automatically adds this money to your portfolio and rebalances as necessary. It’s all done for you, just set it and forget it.

    Questrade: Overview

    Questrade, on the other hand, was founded before the phrase “robo advisor” was part of the financial lexicon, and this platform gives users a more hands-on approach.

    When you sign up for Questrade, you have free rein to invest your money as you see fit.

    You could follow a passive investing strategy such as the Canadian Couch Potato portfolio or choose to buy and sell individual stocks and bonds for your portfolio.

    There is no advisor offering advice on which stocks or exchange-traded funds you should choose, and rebalancing your asset allocations is your responsibility.

    As you can expect, this gives Questrade users unprecedented control over their money, and the fees are very, very low.

    Questrade vs. Wealthsimple: Account Types

    Questrade and Wealthsimple are both know to offer a wide variety of account types. While both platforms differ from one another, both are excellent choices for new investors because of their versatile account options.

    Both Questrade and Wealthsimple offer non-registered and registered account options. As far as non-registered account options, Questrade and Wealthsimple both offer the standard Tax-Free Savings Account (TFSA) and the Registered Retirement Savings Plan (RRSP). Non-registered are available from both online financial platforms.

    Let's take a closer look at what these Canadian financial platforms have to offer.

    Wealthsimple: Account Types

    Wealthsimple allow you to invest your money with a Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA), Registered Education Savings Plan (RESP), Locked-In Retirement Account (LIRA), or joint or personal non-registered account.

    Wealthsimple offers additional portfolio account options like socially responsible investing and Halal investing.

    Finally, Wealthsimple also offers Wealthsimple Cash, a digital savings account tool, a commission-free stock trading platform called Wealthsimple Trade, and crypto trading through Wealthsimple Crypto. Still, these add-ons are not how the vast majority of Canadians use Wealthsimple.

    Questrade: Account Types

    Questrade is much more advanced when it comes to its account options. Some of the account options it provides include both registered and non-registered accounts, which include TFSAs, RRSPs, RESPs, Margin, Spousal RRSPs, LIRA, Locked-In RRSPs, RIFs, LIFs, Family RESPs, Corporate, Investment Club, Partnership, Sole Proprietorship, Individual Informal Trust, Joint Formal Trust, Formal Trust, Individual Margin, Joint Margin, Individual Forex & CFDs, and Joint Forex & CFDs.

    Questrade vs. Wealthsimple: Types of Assets

    When it comes to the types of assets offered by Wealthsimple and Questrade, it's fairly easy to notice that both offer the bare minimum of what the average Canadian requires to accrue wealth.

    However, Questrade undoubtedly has more assets to choose from, leaning more towards the more learned investor. Still, both offer the most basic assets.

    Below, we'll take a look at the types of assets offered by both financial platforms.

    Wealthsimple: Asset Types

    Wealthsimple your risk tolerance preferences to build you a portfolio made up of Exchange Traded Funds (ETFs), which are essentially bundles of securities that allow you to purchase dozens of stocks or bonds when you buy a single fund. These ETFs include Canadian, US, and foreign stocks, corporate debt, government bonds, and gold. The proportions of each ETF depend on your risk tolerance as assessed by your sign-up questionnaire.

    Questrade: Asset Types

    You can also buy ETFs on Questrade and build a balanced and diversified portfolio yourself. If you’d prefer to purchase individual stocks and ETFs, you can also do that with Questrade, making this platform more flexible than Wealthsimple. You can also buy options, forex, mutual funds, Guaranteed Investment Certificates (GICs), and precious metals with Questrade – again, individually and without the help of an advisor.

    Questrade vs. Wealthsimple: Fees

    As with any financial product, you’ll need to pay fees to invest with either Wealthsimple or Questrade.

    That said, both Questrade and Wealthsimple have very low fees, much lower than the average 2% to 3% commission fees you’ll pay when investing in mutual funds in Canada. Here’s how the costs of these two online brokerages compare:

    Wealthsimple: Fees

  • Wealthsimple Account fee for opening or closing: None
  • Annual RRSP or TFSA fees: None
  • Annual management fee: 0.5% of value for portfolios under $100,000, drops to 0.4% for portfolios over $100,000
  • Wealthsimple has very few fees, but they charge 0.5% of the portfolio’s value per year to invest and rebalance your portfolio automatically.

    Questrade: Fees

  • Account opening or closing fees: None
  • Annual RRSP or TFSA fees: None
  • ETF purchase cost: $0
  • Stock purchases: $0.01/share, minimum $4.95 per trade
  • As you can see above, Questrade charges per trade for stock purchases but doesn’t charge for ETF purchases, which means you could build an ETF portfolio for free.

    Questrade vs. Wealthsimple: Funding

    Both Questrade and Wealthsimple allow you to transfer existing registered accounts directly, so you won’t have to withdraw from your RRSP and pay taxes on that money before transferring it on.

    After that, you can fund your Wealthsimple and Questrade accounts by linking them with your chequing account. You can set up automatic monthly contributions to your investment accounts or make your transfers manually.

    Questrade vs. Wealthsimple: Resources

    Wealthsimple and Questrade are online platforms, which means you can’t go to a local branch and speak with a financial advisor about your investing needs. That said, both have customer service reps available by phone, email, and chat if you have questions about how to use their software.

    If you’d like more advice, Wealthsimple offers free financial coaching for anyone with a portfolio of $100,000 or more.

    Still, suppose you don’t reach this threshold. In that case, you can take advantage of their portfolio review service, which you can use to book an online appointment with a financial advisor to review your portfolio choices and even advise on other aspects of your financial plan.

    Questrade is a little more hands-off with their advice. You won’t find the option to meet with a financial advisor through Questrade, but they have a library of helpful articles to answer your questions.

    Questrade vs. Wealthsimple: Safety and Security

    While all of Canada’s big six banks offer online banking and web portals for their services, they aren’t wholly online. So, are Wealthsimple and Questrade safe to use? The short answer is yes.

    The long answer is that Wealthsimple uses state-of-the-art encryption and is protected by the Canadian Investor Protection Fund, which means if anything ever happened to Wealthsimple, your money is protected.

    Questrade was established in 1999 and has a long track record of safe operations. They also use state-of-the-art encryption and are members of the Canadian Investor Protection Fund (CIPF).

    Additionally, both Questrade and Wealthsimple are members of the Investment Industry Regulatory Board of Canada (IIROC). The IIROC is Canada’s regulatory board which oversees traders such as Questrade and Wealthsimple.

    Our Final Thoughts

    While these two online investing platforms have many common features, their differences make them ideal for slightly different investing scenarios.

    Wealthsimple takes much of the confusion out of investing, offering premade, automatically rebalanced portfolios, a beautiful mobile app, and no minimum account balance.

    For these reasons, we think that Wealthsimple is perfect for any investor that is new to self-directed investing (or investing in general, for that matter).

    Questrade, on the other hand, is less expensive overall. Still, the downside of those lower fees is that you’ll need to build your portfolio yourself with no oversight, and you are responsible for rebalancing your portfolio quarterly. Some experienced investors may relish the chance to take their financial future into their own hands, and those are Questrade’s ideal customers.

    If you are interested in Questrade but would like a little more advice and help to design your portfolio, Questrade offers Questwealth Portfolios, which is their robo advising product. Questwealth Portfolios has a 0.25% management fee, which is lower than Wealthsimple’s 0.50% fee.

    Frequently Asked Questions

    If you are currently investing for your retirement in mutual funds, you are paying some of the highest fees in the world, averaging between 2-3%. If you move your money to Questrade or Wealthsimple, you’ll cut down on fees dramatically, down to just 0.5% for Wealthsimple and possibly even lower for Questrade. This fee cut will help you save money immediately, which will transfer into thousands of dollars in additional returns over time.

    The quickest and easiest way to fund your Questrade or Wealthsimple account is to link it directly to your chequing account. This link allows you to contribute money regularly, which is key to establishing a good saving habit. Linking your account is currently the only way to make contributions to a Wealthsimple account. With Questrade, you can fund your account using the following methods, in addition to linking your account:

  • Online bill payment
  • Interac online
  • Wire transfer
  • Certified cheque or bank drafs
  • Non-certified cheque
  • Money order
  • Stock certificate
  • Unfortunately, no one on the internet can definitively tell you which online investing platform to use (although many will try!) That said, consider the following criteria.

    If you:
  • Are new to either online investing or investing in general
  • Have less than $1,000 to start your investing journey
  • Appreciate advice and guidance on choosing how to invest your money
  • Don’t mind paying very low fees for the extra help
  • Then Wealthsimple’s user friendly platform is an excellent choice.

    If you:
  • Have been investing for awhile, either online yourself or through an advisor
  • Have a portfolio of at least $1,000
  • Have a solid understanding of risk tolerance, ETFs, and the principles of balanced portfolio building
  • Want total control over your money
  • Want to pay the absolute lowest fees possible

  • Then Questrade is where you’ll be happiest.

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