It used to be that if you wanted to start an investment portfolio, you would have to hire a wealth management firm to purchase and manage your investments. This option could prove to be expensive. Even if you opted to buy and sell investments on your own by opening an account through your bank, you would face commission fees of $10 or more per transaction, which can add up over time.
Today, more and more Canadians are doing their own investing. Empowered by discount brokers that provide affordable options, they can create investment portfolios at a low cost, utilizing platforms that make buying and selling financial assets easy and convenient.
Two of the most well-known discount brokers in Canada are Wealthsimple Trade and Questrade.
Wealthsimple Trade vs. Questrade: an Overview
Wealthsimple Trade emerged in 2019 as a new product from Wealthsimple, an online investment management firm. It’s directed at Canadians who prefer to do their own investing. Questrade is a more established firm. It started operations in 1999 as the first real discount broker, offering clients low commission fees.
Here’s a breakdown that compares the two discount brokers:
| Wealthsimple Trade | Questrade | |
| Available Accounts | – RRSP -TFSA – Non-registered personal accounts | – RRSP – TFSA – RESP – LIRA – RIF – LIF – Margin – Non-registered personal and business accounts |
| Trade Fees | None | $4.95 – $9.95 per trade, other fees depending on investment product |
| Foreign Currency Conversion Fees | 1.5% for CAD to USD foreign exchange conversion | 2% for CAD to USD foreign exchange conversion |
| Inactivity Fee | None | None |
| Minimum Investment | $0 | $1,000 |
| Investment Products | – Stocks – ETFs | – Stocks – ETFs – Mutual funds – GICs – Options – IPOs – Precious metals – OTC assets – International equities |
| Types Of Orders | – Market orders – Limit orders – Stop-limit orders | – Market orders – Limit orders – Stop-loss orders – Stop-limit orders – Trailing stop orders – Trailing stop-limit orders, – Limit on open order – Limit on close order |
| Supported Exchanges | – TSX – TSXV – NYSE – NASDAQ | – TSX – TSXV – NYSE – NASDAQ – CNSX – MX – NYSEAM – ARCA – OPRA – PinkSheets – OTCBB |
| Market Data Availability | Snap quotes (market data delayed by 15 minutes) | Multiple market data packages (free and paid) |
| Supported Platforms | – Website – iOs – Android | – iOs – Android |
| Reimburse Transfer Fees | Maximum $150 in fees for accounts over $5,000 | Maximum $150 in fees |
Wealthsimple Trade vs. Questrade
Wealthsimple and Questrade are both geared toward individuals interested in taking an active role in managing their investing and trading, but they differ in their features and benefits. Read below to find out how they stack up against each other.
Fees
Wealthsimple Trade has the distinction of being Canada’s only broker to offer commission-free trading, at least for the time being. The platform allows you to buy and sell stocks and ETFs without paying any commission fees. Furthermore, Wealthsimple Trade will reimburse you for transfer fees up to $150 if your account is valued at more than $5,000. There is, however, a foreign currency conversion fee of 1.5% that’s charged on American stocks or EFTs you purchase. Because Wealthsimple Trade only permits you to open a Canadian account, this means you’ll incur the conversion fee each time you buy or sell a security listed on a US exchange.
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Questrade charges a variety of fees based on the type of asset you want to buy or sell. For stocks, the minimum fee is $4.95 per trade, up to a maximum of $9.95. The same fee structure applies to ETFs and IPOs, but only on the sale of the security – purchases are free. Much like Wealthsimple Trade, Questrade covers your account transfer fees up to a maximum of $150. Foreign currency conversion fees are 2%, which is slightly higher than what Wealthsimple Trade charges, but Questrade allows you to create a USD account, so you can buy and sell US securities without racking up conversion fees. There are additional fees associated with the purchase or sale of specific investments: you pay US$19.95 per trade for precious metals transactions and $9.95 + $1 for options transactions.
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Minimum Investment Balance
There is no minimum account balance required to open an account with Wealthsimple Trade. You can start trading with little money and only deposit more when you feel ready.
To open a Questrade account, you need to deposit a minimum of $1,000.
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Types of Accounts
Wealthsimple Trade offers non-registered accounts, RRSPs, and TFSAs, which are the three most frequently used accounts by investors and traders.
Questrade offers a broader range of accounts. You can hold investments in a non-registered account, RRSP, TFSA, RESP, LIRA, RIF, LIF, and more. Margin accounts are also available, should you wish to borrow funds to invest, as well as corporate accounts.
Learn the difference between a TFSA and an RRSP.
Types of Investment Products
You can only buy and sell Canadian and American stocks and ETFs on Wealthsimple Trades’ platform.
Questrade offers access to a wide array of investment products. In addition to stocks and ETFs, you can also buy and sell mutual funds, IPOs, options, bonds, GICs, OTC securities, precious metals, and international equities.
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Market Data
Wealthsimple Trade possesses a minimalist and easy-navigable platform. As a result, it provides users little in the way of market data. The analytical tools are limited, and only snap quotes are available to gauge stock and EFT prices (snap quotes only display the current buy and sell price once the user clicks a button to refresh the data), which can have up to a 15-minute delay.
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Questrade offers a plethora of data, combining charts, news reports, real-time streaming quotes, alerts, and other tools to help you keep track of what’s going on in the financial markets. While some of the data is freely available with your account, more in-depth information will cost you extra, which may or may not be worth it, depending on your needs.
Check out Questwealth portfolios by Questrade.
Should You Use Wealthsimple Trade or Questrade?
While Wealthsimple and Questrade are both intended for self-directed investors, choosing the one best for you will depend on how you view yourself as an investor.
Are you a beginner investor?
If you’re a beginner investor who wants to create a simple portfolio that requires little monitoring and follows a passive investment strategy, Wealthsimple Trade will likely appeal to you. The platform allows you to buy and sell ETFs, which are the primary investments that will enable you to construct a passive indexing portfolio to hold long-term. You can contribute to your portfolio without incurring any commission fees, allowing you to realize a greater return over the long run. Wealthsimple Trades’ approachable user interface and clean design also make it easy to find the investment you’re after and initiate a transaction effortlessly. The platform doesn’t offer much in the way of market data and analytical tools. But if you’re primarily a passive investor with limited knowledge of the financial markets, you’d likely find them redundant, anyway.
Or, are you an experienced investor?
On the other hand, if you consider yourself an experienced investor and want to engage in short-term active trading, perform detailed analysis, and create more complex investment portfolios, Questrade will be more suitable for you. While Questrade charges a variety of fees, they’re not unreasonable compared to traditional high-fee brokers.; they won’t strain your wallet, especially if you have a large amount of money to invest. You can also hold both Canadian and American accounts, which will save you money on foreign exchange fees, should you wish to purchase US-listed securities. Questrade’s platform also permits you to buy and sell a wide range of investment products, giving you many options to customize your portfolio.
