Wealthsimple, a major player in Canada’s fintech scene, has made significant strides since its inception in 2014 by CEO Michael Katchen.
This innovative firm shook up the traditional banking industry with its low-cost robo-advisor and user-friendly, self-directed brokerage services, all wrapped in a sleek mobile app design.
As Wealthsimple continues to expand its offerings with new products, platforms, accounts, and features, we conducted a comprehensive review to help prospective users gauge its services.
We’ll evaluate five key aspects of the platform, rating each on a scale of 10 for a total potential score of 50, which we’ll convert into a five-star scaled score.
Wealthsimple Account Availability
When signing up with Wealthsimple, the array of account options is impressive, ensuring that almost every Canadian investor can find a suitable account type.
From the major offerings like the Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA), First Home Savings Account (FHSA), to non-registered accounts, Wealthsimple covers the essentials.
Additionally, they provide access to more specialized accounts such as spousal RRSPs, Registered Education Savings Plans (RESPs), corporate accounts, Locked-In Retirement Accounts (LIRAs), and Registered Retirement Income Funds (RRIFs).
For those interested in alternative investments or savings, Wealthsimple also offers cash accounts, akin to high-yield savings accounts, and platforms for cryptocurrency trading.
However, one notable omission is margin accounts, which allow investors to borrow money to trade securities, using their securities as collateral. As of August 30th, Wealthsimple does not offer these, but plans to add them are indicated on their roadmap.
| Verdict With such a comprehensive range of options, Wealthsimple scores a 9/10 on account availability. The platform nearly caters to every Canadian investor’s financial objectives, with room for expansion into margin trading soon. |
Wealthsimple Fees And Expenses
Wealthsimple has revolutionized trading fees, making the old standard of $9.95 per trade charged by big bank brokerages a relic of the past. Their fee structure varies depending on the services used, but overall, it remains quite competitive.
Managed Portfolio Fees
For their managed portfolios, commonly known as robo-advisors, the management fees operate on a tiered schedule:
- Core clients (those with under $100,000 in assets) face a 0.5% management fee annually.
- Premium clients (those with assets over $100,000) enjoy a reduced fee of 0.4% per year.
- The highest tier, Generational, activates at $500,000, further reducing fees to between 0.2% and 0.4% annually.
Wealthsimple Trade: Self-Directed Brokerage Fees
Switching to Wealthsimple Trade, their self-directed brokerage, there’s no annual management fee, but costs depend on the activities:
- All stock and ETF transactions are commission-free – no cost to buy and sell whatsoever, aside from the implicit bid-ask spread.
- However, trading U.S. stocks involves a 1.5% currency conversion fee on both sides of the transaction (buy and sell) unless you opt for a $10/month U.S. account that allows you to hold USD and minimize conversions.
This USD account fee is waived for Premium and Generational clients. Additionally, instant cash withdrawals incur a 2.5% fee, similar to payment processors like PayPal.
Option trading comes with its own set of fees: $2 USD per contract for core clients and $0.75 for premium and generational.
Wealthsimple Cash And Wealthsimple Crypto Fees
Wealthsimple’s Cash account is particularly cost-effective, with no monthly fees, ATM charges, or foreign exchange fees. Crypto trading, however, is less competitive, with fees ranging from 2% for core clients to 0.5% for generational clients—significantly higher than dedicated cryptocurrency brokerages.
| Verdict Overall, while the commission-free trading is attractive, the foreign exchange fees can be a significant deterrent, especially when competitors like Interactive Brokers offer low-cost currency exchanges. This gives Wealthsimple an overall score of 7/10 in the fees and expenses category. |
Core Platform Features Of Wealthsimple
The range of features you have access to on Wealthsimple largely depends on your plan tier, with each tier offering progressively more perks and capabilities.
Core Clients
Core Clients receive a solid suite of tools:
- For the robo-advisor, they benefit from automatic rebalancing, dividend reinvesting, automatic deposits, personalized portfolios, and access to private credit and equity.
- The self-directed trading platform offers up to $50,000 in instant deposits, options for automating recurring investments and dividend reinvestment, trading fractional shares, and real-time streaming quotes—previously there was a 15-minute delay.
- Clients can set price alerts, create watchlists, lend stocks, and enjoy coverage under the Canadian Investor Protection Fund (CIPF) along with 24/7 help center access and available human support.
Premium Clients
Premium Clients enhance their experience with:
- Tax loss harvesting for robo-advisor users, which is vital for managing taxes in larger, non-registered portfolios and goal setting with a licensed financial advisor.
- Up to $250,000 in instant deposits, a free USD account for easier U.S. stock trading, priority one-day customer support, higher interest rates on cash accounts, and reduced crypto trading fees on the trading side.
Generational Clients
Generational Clients enjoy the pinnacle of Wealthsimple’s offerings:
- In addition to all premium features, robo-advisor users receive custom portfolios, asset location services (optimizing the allocation of assets across taxable and non-taxable accounts), a dedicated team of advisors, and comprehensive financial planning.
- For self-directed traders, generational status brings even higher interest rates on cash balances, further reduced fees on crypto trading, and enhanced crypto staking yields.
Despite these extensive features, some elements are still lacking:
- The mobile app would benefit from a home screen pie chart displaying asset allocation and a dividend tracker, similar to what social apps like Blossom Invest offer.
- There are occasional complaints about inaccuracies in the platform’s charts, which only show cumulative performance and can be skewed by significant deposits or withdrawals, rather than showing annualized returns. Users have also noted issues with buggy charts and some securities being listed with incorrect names or missing logos.
| Verdict Given these considerations, Wealthsimple earns an 8/10 here. They’ve covered most bases, continually roll out new features, and have made significant strides over the years. However, there are still some quality-of-life improvements that could enhance user experience further. |
Investing Product Lineup
Wealthsimple has significantly expanded its product offerings since its inception. Initially, the platform had a decent selection of Canadian and US stocks and ETFs, but now it features an extensive lineup.
- Stocks and ETFs. Currently, investors can trade over 14,000 stocks and ETFs listed on major North American exchanges such as the NYSE, Nasdaq, TSX, TSX-V, Cboe Canada (formerly NEO), BATS, and CSE. This includes a variety of American Depositary Receipts (ADRs), Canadian Depositary Receipts (CDRs), and over the counter (OTC) stocks.
- Options Trading. Options trading is available, albeit with limitations; currently, Wealthsimple clients can only engage in buying long calls and puts on selected stocks and ETFs, without the ability to sell options. However, plans to include covered calls are noted on the firm’s development roadmap.
- Cryptocurrencies. Alternative assets are also a growing focus. In the realm of cryptocurrencies, Wealthsimple provides access to major ones like Bitcoin, Ethereum, and Solana, alongside over 60 other varieties.
The platform also offers entry into private equity and private credit funds, which although potentially higher yielding, come with lockup periods and elevated fees.
Despite these extensive offerings, there are noticeable gaps. Wealthsimple does not support trading of individual preferred shares, stocks listed on European or Asian exchanges, or individual bonds like Treasury bills or corporate issues. Additionally, forex trading is not available.
| Verdict Overall, Wealthsimple earns an 8/10 for its product lineup. While the platform suits the needs of most beginner and intermediate investors with its broad range of options, those requiring more advanced features, particularly in options exposure or fixed income instruments, might find it lacking. |
Value-Added Offerings
Wealthsimple has transcended its original identity as a basic discount brokerage to establish itself as a comprehensive financial platform.
First Wealthsimple has significantly ramped up its educational offerings, featuring a robust FAQ section, retirement calculators, personal finance guides styled as “Finance 101”, an engaging magazine, and a widely-read newsletter titled “TL;DR”.
But, in addition to educational resources the platform has also rolled out a litany of ancillary perks:
- Premium and Generational subscribers benefit from discounts on essential services, including 15% off will preparation and 30% or 40% off Medcan year-round care plans, with 20% off annual health assessments. Generational clients also enjoy 10 airport lounge passes per year.
- Wealthsimple Cash Card: All users can access a prepaid Mastercard linked to a cash account, featuring no fees and generous spending limits.
- Wealthsimple Tax: Previously known as SimpleTax, this service allows users to “pay what you want,” with more comprehensive plans available either for a fee or complimentary to Premium and Generational users. Even the basic plan supports two tax returns, with higher tiers offering audit protection and year-round tax advice; Generational users receive personalized expert tax advice.
- Mortgages: Through Pine, a direct lender, Wealthsimple offers mortgages at reduced rates by eliminating brokers. Clients receive rebates scaled by tier: 0.05% for Core, 0.1% for Premium, and 0.15% for Generational. Additionally, users can secure an extra 0.05% rebate for every $50,000 transferred to Wealthsimple. The application process is entirely online, bypassing the need for paperwork or in-person appointments.
| Verdict Wealthsimple scores a robust 8/10 for its value-added offerings. Many of these features would be expensive or restricted by higher net worth requirements at Canada’s major banks, highlighting Wealthsimple’s commitment to providing wide access and significant value to its clients. |
Wealthsimple Overall Score
In our comprehensive review of Wealthsimple, we assessed several crucial categories and assigned the following scores:
Account Availability: 9/10
We were impressed by the extensive range of account options available, from RRSPs and TFSAs to cash and crypto accounts. The platform caters well to Canadians with various financial goals. However, the absence of margin accounts (although they are on the roadmap) slightly limited the perfect score.
Fees And Expenses: 7/10
Wealthsimple shines with its no-commission stock and ETF trading, making it highly accessible. The tiered management fees for managed portfolios are reasonable, though the 1.5% currency conversion fee for USD transactions could be a deterrent for those frequently trading U.S. stocks.
Core Platform Features: 8/10
The platform offers robust features like real-time quotes, instant deposits, and extensive support options, which enhance the trading experience. Nonetheless, some quality-of-life improvements could be made, such as adding a pie chart view for asset allocation and refining the performance charts to better account for deposits and withdrawals.
Investing Product Lineup: 8/10
Wealthsimple provides a broad selection of stocks, ETFs, and alternative assets like cryptocurrencies and private equity. While the product range is vast, the lack of options for trading individual bonds, preferred shares, and foreign securities outside North America reflects room for growth.
Value-Added Offerings: 8/10
The platform’s additional services, including educational resources, financial tools, and discounts on health plans and legal services, add significant value, especially compared to traditional brokerages. These features make Wealthsimple a standout choice for holistic financial management.
Overall, these total 40/50, which translates to an overall score of 4.0 out of 5 stars. This rating reflects Wealthsimple’s strong performance across multiple dimensions, highlighting its appeal as a comprehensive and user-friendly investment platform suitable for a wide range of Canadians.
