Wealthsimple Review 2021: Investing for Canadians Made Simple
Wealthsimple provides a simple and approachable means of investing for regular people. When it opened its doors, the financial platform debuted with a robo-advisor. Since then, it has introduced a variety of financial tools that continue to help Canadians prosper financially. As we always say, if you’re going to prosper in any way, let it be financially.
This Wealthsimple review covers everything Canadians need to know about the financial institution and their exciting line of exceptional products, with a breakdown of how each service works, along with frequently asked questions to steer rookie investors in the right direction. That direction, by the way, is towards a growing bank account.
What is Wealthsimple?
Wealthsimple is a multi-platform banking and investing service operating out of Toronto, Canada since 2014. In 2017, Wealthsimple expanded services south of the border to the United States of America and across the pond to the United Kingdom.
Today, Wealthsimple manages $5 billion in savings and investments for approximately 175,000 customers.
The wealth management platform initially provided a robo-advisor service but has since grown into a full investing and banking service, offering an online brokerage, hybrid bank account, crypto trading, and a tax-filing service. Wealthsimple customers can access these tools through a sleek mobile app, available on iOS and Android or through their online interface.
- Wealthsimple Invest: A robo-advisor with a multitude of registered and non-registered account options for hands-off investing.
- Wealthsimple Trade: A discount brokerage that facilitates self-directed stock trading with no commission fees and registered and non-registered account options.
- Wealthsimple Cash: A hybrid bank account that combines the high-interest of a savings account with the flexibility and freedom of a chequing account that allows customers to both spend and save money.
- Wealthsimple Crypto: A cryptocurrency trading platform that facilitates the purchase and sale of Bitcoin and Ethereum with no trading fees.
- SimpleTax: An automated tax-filing service that files tax-returns in exchange for a donation, set at the user's discretion.
How does Wealthsimple Work?
Wealthsimple prides itself on being an accessible, easy-to-use wealth management platform.
Wealthsimple Invest uses a computer-driven algorithm to make investment decisions on behalf of the investor. That means Wealthsimple Invest clients are not required to make trading decisions or monitor their investments. It charges a Management Expense Ratio (MER) in exchange for managing these accounts.
Upon sign-up, new investors must fill out a questionnaire that details their age, savings goals, and risk capacity. Portfolios are built automatically on their behalf.
Wealthsimple Trade and Wealthsimple Crypto requires more active trading and requires a little more experience. Investors must make decisions on which stocks or ETFs to purchase.
Wealthsimple Pros & Cons
Wealthsimple's advantages greatly eclipse its drawbacks. Still, it's important to assess whether or not the investment platform is a suitable fit. Like buying a pair of shoes, you want to make sure both feet fit perfectly and not just the left one.
Pros: The Good Stuff
No minimum investments: Wealthsimple is very accessible to common people, and a major part of this relies on it's no minimum investment requirement. Anyone can get started, even if they do not have any money to contribute at the time of opening an account.
No additional fees: Wealthsimple does not charge any fees outside of the MER charged through Wealthsimple Invest. There are also no inactivity fees or annual fees.
Socially Responsible Investing & Halal Investing Options: Wealthsimple builds portfolios with socially responsible investments or Halal investments for customers who value ETF packages that align with their values.
Cons: The Not So Good Stuff
Higher MER than competitors: Wealthsimple Invest charges a bigger Management Expense Ratio than some of its competitors.
Delayed deposit times: Depositing funds from an external bank account into a Wealthsimple account can take up to three business days.
A Wealthsimple Review for 2021
Wealthsimple products provide some truly unique advantages to financially savvy Canadians.
Below, we'll explore Wealthsimple's products in greater detail, looking at what they offer and how it is reinvigorating Canada's financial landscape.
Wealthsimple Invest Review
Wealthsimple Invest is a robo-advisor and automated investing platform that makes trading decisions on behalf of its clients using a computer-driven algorithm. It is one of Canada’s first and most popular robo-advising services.
Upon sign up, Wealthsimple asks new investors a series of general questions about their personal financial goals and builds a portfolio of Exchange Traded Funds (ETFs) on their behalf. This means investors with no prior experience are not required to choose their investments.
Moreover, Wealthsimple Invest also:
- builds portfolios based on the investor’s risk capacity, which tells the automated investing service how much risk it will take when purchasing and selling securities
- works similarly to mutual funds but comes at a fraction of the price as no financial advisor is actively managing the investments
- offers an abundance of registered and non-registered accounts, including, but not limited to, Tax-Free Savings Accounts (TFSAs), Registered Retirement Savings Plan (RRSP), personal, joint, and business accounts, and much more
Additionally, Wealthsimple provides Socially Responsible Investing (SRI) and Halal portfolios for customers seeking socially conscious portfolios that align with Islamic values.
Pricing for the robo-advisor comes in three tiers: Basic, Black, and Generation, all of which offer different advantages for investors based on the amount of money invested.
- Wealthsimple Basic is the primary tier available for deposits under $100,000. The package comes with a 0.5% management expense ratio (MER), automatic rebalancing, and dividend reinvestment.
- Wealthsimple Black, the second investing tier, offers investors with a balance between $100,000 to $500,000 a reduced MER of 0.4%. It also offers a dedicated financial planning session and tax-loss harvesting, along with the Wealthsimple Basic package’s advantages.
- Wealthsimple Generation is the top investing package available with Wealthsimple, available for accounts with balances over $500,000. The MER rate for the Generation package is also 0.4%. It includes all previous features, with in-depth financial planning, assistance from a team of financial advisors, and a health care package, among other benefits, including those previously mentioned.
Wealthsimple Trade Review
Wealthsimple Trade is a discount brokerage that allows investors to make self-directed stock and ETF trading on major exchange markets in the United States and Canada.
The online brokerage does not charge trade commissions, meaning stocks and ETFs can be purchased and sold at no cost. There is a small fee based on exchange rates if purchasing stocks or ETFs on any US market. There are no minimum investment or minimum balance requirements when using Wealthsimple Trade, meaning customers can get started with as little as $1. Customers can open a Wealthsimple Trade account online and use its dedicated mobile app to manage stocks or ETF investments. Plus, investors can place investments in a TFSA, RRSP, or a personal non-registered account.
Wealthsimple Cash ReviewWealthsimple Cash is a hybrid bank account that combines a chequing account with a savings account. The account offers an interest rate that currently sits at 0.9%, with unlimited transactions, e-transfers, deposits, and withdrawals, and a monthly ATM fee reimbursement allowance. Bonus: there is no minimum balance or monthly fees associated with this account. Wealthsimple Cash also offers mobile cheque and direct deposit, with a titanium debit card and mobile payment expecting release within the coming year. The account also acts as a prepaid Visa credit card, making it an acceptable form of payment anywhere Visa is accepted. At this time, Wealthsimple Cash is available exclusively online, with many of the features rolling out within the coming year.
Wealthsimple Crypto Review
Still anticipating a full release, Wealthsimple Crypto facilitates the trading and selling of two types of cryptocurrency: Bitcoin and Ethereum.
Wealthsimple Crypto does not charge selling or commissions and requires no minimum deposit. Cryptocurrency investors can place their funds in a non-registered account. However, Wealthsimple Crypto is not yet available at this time but aims to launch within the next few months.
SimpleTax is an automated filing service that completes and submits tax-returns to the Canada Revenue Agency (CRA) on behalf of its clients. In 2019, Wealthsimple acquired the tax-filing service.
SimpleTax uses a donation-based pricing system that allows customers to pay as much as they'd like to submit their income tax report. One of the benefits of SimpleTax is it provides an easy and affordable means for income tax filing – something that should be taught in schools. Sure learning the Pythagorean theorem was interesting, but teaching a grade 11 or 12er how to do their taxes? Priceless.
Frequently Asked Questions
Yes! A major component of Wealthsimple’s success is the financial institution’s emphasis on keeping things simple. After all, it’s in their name.
All Wealthsimple products guide new investors through the entire process. While this primarily pertains to their robo-advisor, Wealthsimple Invest takes care of portfolio building and management.
Wealthsimple Invest is an automated investing platform (a portfolio containing stocks and bonds is specifically managed according to the investor’s risk tolerance).
When it comes to self-directed trading products like Invest and Crypto, the onus is on the investor to know what trading decisions they’d like to make. Aspects such as risk capacity depend on the type of investment, which the investor is responsible for their own decisions.
Absolutely. Wealthsimple guides customers through the entire investing process by providing several options for beginners with a little experience. Plus, you’ll find a variety of investment options and accounts that make it easy to create a solid portfolio.
If only life was that easy! The truth is, only you can make yourself rich. However, Wealthsimple can certainly help. One of Wealthsimple’s many clever slogans is “Get Rich Slowly.” This phrase is an apt representation of how the platform works. Over a lifetime of contributions, Wealthsimple manages the money that helps Canadians increase their potential to earn, while steadily beating inflation. With regular contributions, Wealthsimple customers can achieve their goals for homeownership, retirement, or anything else they aspire to achieve in a shorter time. The truth is, a dedicated savings plan and living below your means is the true path to financial success. While Wealthsimple can certainly help you get richer, only you can achieve financial independence.