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A Wealthsimple vs. ModernAdvisor Review for 2023

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Breaking into the world of wealth management no longer requires a finance degree and a small fortune. A world once reserved for the wealthy is now open to anyone who wants to make their money work harder, thanks to digital wealth management services (also called robo-advisors).

This review will compare two of the most popular online investment platforms in Canada, Wealthsimple and ModernAdvisor. Get ready for this deep dive into trading, dividends, and portfolio rebalancing that will undoubtedly get you fired up about your financial future.

Wealthsimple vs. ModernAdvisor: Overview

Wealthsimple and ModernAdvisor offer online investing services to Canadians looking to grow and manage their money. Before we get into the good stuff, like features and account fees, let’s start with an overview of each company.

Wealthsimple: Overview

Wealthsimple is Canada’s largest financial technology company providing smart, simple investing without the high fees and account minimums associated with traditional investment management.

Backed by a team of world-class financial experts, Wealthsimple offers powerful tools to help Canadians keep more of the money, including Wealthsimple Invest, Wealthsimple Trade, Wealthsimple Crypto, Wealthsimple Tax, and Wealthsimple Cash.

Since launching in 2014, Wealthsimple has put more than 1.5 million users in control of their financial freedom and currently manages over $10 billion in assets.

ModernAdvisor: Overview

Founded in 2013, ModernAdvisor is an online automated investing service that offers Canadians low-cost portfolio management.

Unlike the majority of robo-advisors, ModernAdvisor uses a hybrid strategy that combines passive and active investing.

ModernAdvisor creates customized portfolios using a combination of Exchange Traded Funds (ETFs), including Registered Retirement Saving Plan (RRSP), Tax-Free Savings Account (TFSA), Registered Education Savings Plan (RESP) for individuals and families, Locked-In Retirement Account (LIRA), and non-registered accounts (individual, joint, and corporate).

Registered as a Restricted Portfolio Manager with securities commissions of all Canadian provinces, ModernAdvisor adheres to strict legal standards that put the best interests of its users first.

Wealthsimple vs. ModernAdvisor: Features

Both Wealthsimple and ModernAdvisor are packed with impressive features for new and experienced investors. We’ll outline the most important ones below.

Wealthsimple: Features

  • Auto-Deposits: Set aside a portion of your funds that are automatically deposited into your investment account on a weekly, bi-weekly, or monthly basis.
  • Dividend Reinvestment: The Dividend Re-Investment Program (DRIP) acts as a savings account with compound interest, only instead of dollars, you’re accumulating stock.
  • Automatic Rebalancing: Wealthsimple automatically moves your money between investments to rebalance your portfolio as the market changes.
  • Financial Advisors: Powerful technology backed by financial planners with thousands of hours of experience advising seasoned, high net-worth investors.

ModernAdvisor: Features

  • Trial Account: Get a free 30-day trial to try online investing and keep any gains when you open and fund an account at or before the end of the trial.
  • Fund Fee Analyzer: Determine the amount you pay in fees for mutual funds (even the hidden fees) to see the difference low fees from ModernAdvisor can make to your bottom line.
  • Automatic Rebalancing: Portfolios designed by a CFA charter holder and adjusted to keep pace with the market based on the amount of investment risk you’re comfortable with.
  • On-Demand Investing: Access your investment accounts anytime from anywhere using your computer or mobile device.

The Winner: Features

While ModernAdvisor’s trial account is enticing, its features fall short compared to the boatloads of added value Wealthsimple is serving up. In addition to the listed features, Wealthsimple offers an easy way to invest spare change and extra cash, its own cryptocurrency exchange, and simplified tax returns.

Wealthsimple vs. ModernAdvisor: Fees

No one likes to see their profits get eaten up by fees. How much will it cost to put your money to work? Let’s find out.

Wealthsimple: Fees

Wealthsimple charges a percentage of the money you invest and includes all investment advice, portfolio management, and trading costs. Investments under $100,000 have a flat fee of 0.5%* in addition to fees for EFTs that average around 0.2%*.

Fees drop to 0.4%* if you invest more than $100,000 or over $500,000, and you gain access to additional features, like tax-loss harvesting, on taxable investments, in-depth financial planning, and personalized investments.

*Rates current as of September 2021

ModernAdvisor: Fees

Like most robo-advisors, ModernAdvisor has a tiered fee structure based on the balance in your account.

Investments under $10,000 have no fees. Accounts with a balance between $10,000 and $100,000 are charged a fee of 0.5%*, which drops to 0.4%* for a balance over $100,000 up to $500,000.

If you’re going all-in and investing $500,000 to $1,000,000 or more, fees are only 0.35%*. These management fees are in addition to the management expense ratio (MER) built into the ETFs.

*Rates current as of September 2021

The Winner: Fees

If you missed it, Wealthsimple fees include investment advice, portfolio management, and trading costs. ModernAdvisor uses the Credential Qtrade platform for investing, which can result in hidden fees beyond what ModernAdvisor charges.

Wealthsimple vs. ModernAdvisor: Requirements

Starting your journey to financial freedom shouldn’t feel like a marathon. Wealthsimple and ModernAdvisor make it easy to set up your account and personalize your portfolio.

Wealthsimple: Requirements

Wealthsimple is available to Canadians over the age of 18. To set up an account and start investing with Wealthsimple, all you need is an internet connection and a few personal details to verify your identity.

Investment firms typically require a deposit of $2,000 to $5,000 to get started, but Wealthsimple doesn’t have a minimum requirement. Users can start building their portfolio with as little as $1*.

*Rates current as of September 2021

ModernAdvisor: Requirements

To invest with ModernAdvisor, you must be at least 18 years old and a Canadian citizen or resident of Canada.

The documents or personal information you need are a government-issued photo ID, Social Insurance Number (SIN), a recent bank statement, and a void cheque check. The minimum amount required to start investing with ModernAdvisor is $1,000*.

*Rates current as of September 2021

The Winner: Requirements

With no upfront cost to start investing, Wealthsimple is the clear winner in this category. The $1,000* ModernAdvisor charges to get into the game is fairly competitive for the industry, but it’s hard to beat $1*.

*Rates current as of September 2021

Wealthsimple vs. ModernAdvisor: Accessibility

It’s not enough to build a digital investment platform; you have to make it easy to navigate and accessible from anywhere, anytime. Let’s compare accessibility for Wealthsimple vs. ModernAdvisor.

Wealthsimple: Accessibility

Wealthsimple takes the guesswork out of investing and manages your money for you. Transfer funds into your Wealthsimple account like you would with any other bank or set up automatic withdrawals. There is no upfront cost and plenty of educational resources, all backed by expert advisors ready to help new and experienced traders make smart financial decisions. Wealthsimple also offers Halal investing to help build shariah-compliant portfolios in accordance with Islamic principles of investing.

ModernAdvisor: Accessibility

The onboarding process to open an account with ModernAdvisor is relatively straightforward, with the option to add funds manually or use automatic bank withdrawals. There is no cost to set up an account, but a $1,000 balance is required to start investing. Individuals who are hesitant to jump into digital wealth management can test-drive investing for free with a ModernAdvisor trial account. Clients can also build socially responsible investment (SRI) portfolios consisting of ETFs that are more environmentally conscious or deal with social issues and corporate governance.

The Winner: Accessibility

When it comes to accessibility, Wealthsimple and ModernAdvisor are pretty comparable. However, Wealthsimple still comes out on top with no financial commitment to get started and more value-based investment options.

Wealthsimple: Pros & Cons

Pros: The Good Stuff

  • No upfront cost to start investing
  • Quick signup process
  • Value-based investing
  • Deposit protection from the Investment Industry Regulatory Organization of Canada (IIROC) and Canadian Investor Protection Fund (CIPF)

Cons: The Not So Good Stuff

  • Expert advice from professional investors is not available for the majority of portfolios
  • Higher MER than some competitors
  • Delayed deposits from external bank accounts

ModernAdvisor: Pros & Cons

Pros: The Good Stuff

  • Trial account funded by ModernAdvisor
  • No fees on the first $10,000 invested
  • Responsible investment portfolios
  • Live support
  • Passive and active investing

Cons: The Not So Good Stuff

  • $1,000 required before investing begins
  • Transfer fees only covered accounts over $25,000
  • Potential for hidden fees

Our Final Thoughts

As far as options go for online investment and portfolio management, Wealthsimple and ModernAdvisor are solid choices to leverage your cash.

However, if you don’t have the capital or the experience to take on the stock exchange solo, Wealthsimple is your best option.

The “set it and forget it” approach to investing puts your money on autopilot, so you get all the benefits of a managed portfolio without spending all your time watching the market.

Frequently Asked Questions