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Wealthsimple Trade Review

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Many Canadians are eager to begin investing, but the process is often needlessly complicated and expensive. The big banks impose heavy fees for each transaction (anywhere from $5 to $30) and customers are often pushed into pre-fabricated investment portfolios with little room for customization.

Wealthsimple Trade aims to make investing easier (and cheaper). By using the Wealthsimple Trade app, you can buy and sell thousands of stocks and ETFs (exchange-traded funds) instantly. If a full stock is out of your budget or you simply want to test the waters with a particular company, you can buy and sell fractions of stocks on Wealthsimple Trade. This opens up entirely new investment opportunities, especially  for those just getting started with investing.

Best of all, it is free to buy and sell via the Wealthsimple app. There are no transaction fees, which frees users up to customize their portfolio at any time without worrying about excessive fees.

Looking to get investing with Wealthsimple Trade? Below we will cover everything you need to know to get started using the service. We will cover how to set-up an account, how to buy and sell, the pros and cons of the service, the hidden fees to be aware of, how to invest with crypto, and much more.

What is Wealthsimple Trade?

Wealthsimple Trade is the investment component of the popular Wealthsimple app. Wealthsimple was founded in 2014 and was designed to appeal to the needs of Millennials. The company offers a number of services including automated investing, a cash-sending service, and even the ability to file your taxes using the service.

Wealthsimple Trade allows users to buy and sell stocks and ETFs via the app free of charge. In addition to standard stocks and ETFs, you can also invest in crypto currencies including Bitcoin and Ethereum through Wealthsimple Crypto.

Wealthsimple Trade Pros & Cons

Like with any service, there are pros and cons to using Wealthsimple Trade. Below we will highlight some of the advantages and disadvantages of the investment service to help you decide whether Wealthsimple Trade is the right option for you.

Pros: The Good Stuff

  • Commission-free trading: Wealthsimple Trade sets itself apart from many of its competitors by offering commission-free trading. Instead of paying $5 and up for each trade, Wealthsimple Trade offers users zero-commission trades. This is especially attractive for those new to investing who can experiment with buying and selling different stocks and ETFs without incurring any extra fees.

  • Ease of use: Investing through the Wealthsimple app is a straight-forward process that should feel intuitive even for those new to investing. While you can use Wealthsimple Trade without having to use any of the additional Wealthsimple services, it’s very convenient to be able to monitor your investments and additional accounts all through one handy and clean interface.

  • Customization: You are fully in charge of your portfolio with Wealthsimple Trade. Notice that a stock is underperforming? You can sell it anytime you choose, free of charge. Read about a company making moves? You can buy shares right away and begin monitoring your progress. The bigger banks will often steer clients towards groupings of investments (which can have their place), but if you want to pick each and every investment on your own, Wealthsimple Trade allows you to fully customize your investment portfolio.

  • Plenty of options: Wealthsimple Trade offers investors a multitude of options, including thousands of stocks and ETFs offered on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX). For those interested in crypto currencies, you can also buy and sell Bitcoin, Ethereum, Dogecoin, and many other crypto currencies.

  • Fractional transactions: Wealthsimple Trade offers users the ability to buy and sell fractions of stocks and ETFs. If you’ve ever wanted to own Tesla or Apple shares but a full share is out of your budget at the moment, you can buy a percentage of a share and still invest in companies that interest you the most.

  • Compatible with RRSPs / TFSAs / Crypto: You can choose to create a Wealthsimple Trade account as an RRSP (Registered Retirement Savings Plan), TFSA (Tax-Free Savings Account) or an unregistered account. Wealthsimple Trade also offers users the ability to create a crypto account.

  • No minimum: Investing doesn’t only have to be for the rich; with Wealthsimple Trade, you can begin investing with any amount (even $1).

Cons: The Not So Good Stuff

  • Canadian funds only: Wealthsimple Trade is limited to Canadian funds only. While you can buy and sell assets in USD or other foreign currencies, you will be charged the exchange rate along with a 1.5% fee per transaction. While that is a relatively small amount, depending on your investment interests that service fee can quickly add up and is something to keep in mind.

  • Works best on the app: Wealthsimple was designed to help younger generations begin investing, and the Wealthsimple Trade service works best via the company’s app. While there is also a web version available for those who want to give their phone a rest, the service was designed with the app in mind; if you’re not comfortable using the app for your transactions, this may not be the service for you.

  • Prices aren’t in real-time: The prices displayed on Wealthsimple Trade aren’t displayed in real-time; there is a 15-minute delay, which can offer a skewed view of assets that fluctuate quickly. However, the premium version of the app does offer real-time pricing, but it will cost you $3 a month.

How To Use Wealthsimple Trade

Using Wealthsimple Trade is fairly intuitive. Even if you’re new to investing, our step-by-step guide on how to use Wealthsimple Trade will have you investing in no time.

1. Open Wealthsimple: Download the Wealthsimple app or visit the site on any browser.

2. Sign in or register: If you do not have an account yet, you will be prompted to register to create your account. To register, you will need to be a Canadian citizen, Canadian resident, or have a valid Canadian visa, have a Social Insurance Number, be of age in your province or territory, have a Canadian address, and proper identification.

3. How to register: To register, select the sign up button which will then ask you to provide your email address and select a password. You will then be prompted to select the Wealthsimple service you are signing up for; select the “Trade and Crypto” option to sign up for Wealthsimple Trade.

4. Link your bank account: To add your bank account, log into Wealthsimple and select “Move”; from there, choose “Manage Bank Accounts,” then “Add a bank account.” There are two ways to add your account: through the “Plaid” sign-in system, or manually. The Plaid system is a secure service that prompts you to log into your online banking and then links the account. The other option is to enter all of your baking info manually, which requires you to also upload an official bank document (a void cheque, for example) to confirm your identity.

5. Adding funds: Once your bank account is linked, you can add funds to your Wealthsimple Trade account. Open the app, select “Move” from the bottom of the screen, and choose “Add Funds.” Select “From,” and the account/s linked to your profile will be displayed. Select the proper account, and enter the amount you wish to deposit. Once you have reviewed all of the transaction details, click “Submit Deposit” to initiate the transaction and your funds will shortly be available in your account. You can also set up regular deposits from your bank account to ensure you have a steady flow of funds into your Wealthsimple Trade account. Deposits up to $1,500 are available instantly, while deposits over $1,500 take 3 business days to be added to your account (deposits over $50,000 take 5 business days).

6. Select your stocks: Now that your account is funded, you can begin selecting the stocks or ETFs to add to your portfolio. You can use the search bar in the app if you know which stocks you are looking for, or you can select the “Browse Stocks” button which provides an easy way to browse stocks by category, popularity, and more.

7. Check the stock details: Once you’ve found a stock or ETF you’re interested in, you can read its chart to determine the price, the exchange its traded on, the 52 week high and low, and much more. This information gives you a clear idea of the history of the particular stock, which you can use to help decide whether now is the time to buy (or sell).

8. Time to buy: If you’re ready to buy a stock or ETF, simply hit “Buy” to start the transaction. From there, you enter how many stocks you are buying. Once you have that entered, you will be asked to confirm the order; if all looks in order, hit “Confirm Order” and the stock will be added to your portfolio!

9. How to sell: Selling a stock on Wealthsimple Trade is as easy as the buying process. To sell a stock or ETF, head to the Dashboard on the app and select the stock you wish to sell. Select “Sell,” and choose how many stocks you are looking to trade. From there, review the information on-screen to ensure everything is accurate and select “confirm order.” You’ve just sold a stock!

Wealthsimple Trade Features

Costs and Fees:

While there are no commission fees for trading, transfer fees or other hidden fees. A 1.5% currency conversion fee is charged to convert between USD and CAD.

Fractional Shares:

You can purchase any amount of your choice. Simply set the amount you wish to purchase when prompted in the app; you can even buy $1 of shares if you want to start off small.

Usability and Interface:

Wealthsimple Trade was designed with the beginner investor in mind, and has a very intuitive interface. The layout is clean and uncluttered, making buying and selling as simple as any other online purchase you’ve made in the past.

Customer support:

Wealthsimple Trade has a number of customer support options including live chat (including a 24/7 virtual chat assistant), as well as support by phone and email.

How Does Wealthsimple Trade Make Money?

While it is free to buy and sell stock and ETFs via Wealthsimple Trade, there are still a few ways that the company makes money from those using its service (it is a business, after all).

Wealthsimple Trade adds on an extra 1.5% to the exchange rate when exchanging Canadian funds into USD or GBP funds (as well as the reverse). While banks also tack onto a fee to the exchange rate when you convert funds, it’s something to be aware of if you are planning on buying, selling, and trading foreign stocks and ETFs.

In addition to the exchange rate fee, Wealthsimple Trade may also make money on the exchange rate they are using for their calculations. Before any trade, be sure to verify the current exchange rate Wealthsimple Trade is utilizing in order to understand what price you will actually be charged in Canadian dollars.

Wealthsimple also offers Wealthsimple Trade Premium, a $3/monthly upgrade service that includes real-time market information and the ability to deposit $1,000 instantly. While Wealthsimple Trade is almost entirely a digital service, if you still prefer to receive paper statements, the company adds on a $20 charge.

Is Wealthsimple Trade Safe?

So, is Wealthsimple Trade safe? While any sort of stock trading carries its inherent risks, the Wealthsimple Trade app is a safe and secure investing tool. Wealthsimple Trade is regulated by IIROC (Investment Industry Regulatory Organization of Canada), a non-profit organization established to protect Canadian investors.

The assets traded on Wealthsimple Trade are owned by ShareOwner Inc. (a Canadian Investor Protection Fund member) and are each insured for $1 million dollars in the event of company bankruptcy.

However, the crypto market is riskier. Unlike Wealthsimple Trade, Wealthsimple Crypto assets are not insured through either the Canadian Investor Protection Fund or The Canada Deposit Insurance Corporation, an important aspect to consider if you are planning to add crypto currencies to your Wealthsimple Trade portfolio. However, Wealthsimple Trade has commercial criminal insurance through Gemini Trust Company LLC for up to $200 million to protect against potential hacking and security breaches.

Our Final Thoughts

Wealthsimple Trade is a safe and easy-to-use tool for investors, and is especially helpful for those new to investing. The system is essentially free, with only a couple of minor fees. With an intuitive app, the ability to buy fractional shares and the option to buy up to 40 types of cryptocurrency, Wealthsimple Trade is a great solution for those looking to customize their investment experience without paying excessive transaction fees. We’re all on our phones all day anyway—why not use it to make some money?

Frequently Asked Questions

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