Pros, Cons, and Who Should Set up an Account

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective. Terms apply to offers listed on this page. Read our editorial standards.

*Note: Betterment acquired the US side of Wealthsimple’s business in 2021. The remaining portion functions as a Canadian entity.

overall rating

Is wealth simple right for you?

Wealthsimple is a Canadian investment platform offering self-directed trading, automated investing, spending perks, tax filing services, and much more. Its investment selection currently includes stocks, ETFs, and cryptocurrencies.

The platform formerly offered its services to US clients, but it sold its US division to robo-advisor Betterment in 2021. Wealthsimple is available on both iOS and Android devices.

Wealth Simple vs. Wealth Front

Wealthsimple and Wealthfront both offer automated investing, but Wealthsimple is the better choice for individuals who want to trade on their own. With Wealthsimple, you can practice DIY trading for stocks, ETFs, and cryptocurrencies.

Like Wealthsimple, Wealthfront offers both ETFs and exposure to crypto—through its two crypto trusts (Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE). But you won’t be able to place you’re own trades; it’s strictly automated Wealthfront, however, is the better option for hands-off investors who want lower fees.

Wealthsimple vs Vanguard Personal Advisor Services

Wealthsimple and Vanguard both serve many different types of investors. But when it comes to Vanguard’s advisor-managed, automated account, Vanguard Personal Advisor Services, Wealthsimple offers lower entry fees.

Both Vanguard Personal Advisor Services and its other automated investing account, Vanguard Digital Advisor, have higher minimum requirements — $50,000 and $3,000, respectively — than Wealthsimple’s Basic managed portfolio (this option only requires a minimum of $1).

Ways to invest with Wealthsimple

Stocks and ETFs

Wealthsimple is a great option for versatile investors since it offers both self-directed trading and automated investing. The hybrid platform currently gives investors the choice between two separate plans for stock and ETF trading: the Basic plan (which costs $0 per month) and the Plus plan ($10 per month). It’s important to note the differences between the two:

  • Basic plan: This account gives you access to perks like fractional share trading, instant deposits of $1,500, real time prices, unlimited price alerts, commission-free and account minimum-free investing, tax-free savings accounts (TFSAs), taxable accounts, and registered retirement savings plans (RRSPs). (Note: TFSAs and RRSPs apply solely to Canadian residents).
  • plus plan: These users get access to all of the features of the Basic plan. The only difference is that Plus subscribers don’t have to worry about foreign exchange rates for US trades, and they can instantly deposit $5,000.

Unlike the Basic plan, the Plus plan lets you hold USD in your account(s), so you can trade US stocks without running into exchange rates. For the Basic plan, there’s a 1.5% currency conversion fee when you convert from CAD to USD (or vice versa).

As for its investments, Wealthsimple offers thousands of stocks and ETFs that investors can find on both US and Canadian exchanges.

Cryptocurrencies

Wealthsimple Crypto doesn’t have any minimums, nor does it charge any fees to make deposits or withdrawals. Though it doesn’t offer as many crypto assets as popular exchanges like Coinbase and Kraken (both offer 100+ coins), it still has an expansive selection of cryptocurrencies to choose from. Its available coins include bitcoin, dogecoin, ethereum, ahd cardano.

Plus, it lets users take advantage of limit orders, which let you set the price at which you want a sell or buy order to execute. With platforms like Coinbase, you have to use its more advanced account, Coinbase Pro, to utilize limit orders. The fact that you can implement limit orders with Wealthsimple’s most basic crypto services may be appealing for crypto traders in search of order flexibility.

You will run into fees for crypto transactions, though. It has a spread fee that may range up to 2%.

When it comes to custody, Wealthsimple holds most of its users’ assets in offline storage. It uses multiple custodial partners — including Gemini Trust Company LLC — for this, each of which offers more than $200 million in insurance. It says it stores the remaining assets in digital crypto wallets and uses Coincover to protect those coins as well.

Wealthsimple is limited, however, when it comes to transferring crypto in and out of your account. If you want to deposit coins stored through an external wallet, you can only do so for 23 coins. The limit on those 23 coins also applies to users who want to transfer assets out of their account.

Managed portfolios

Wealthsimple’s automated portfolios are ideal for investors who want to sit back and watch their investments grow without making day-to-day trading decisions for the account. All you’ve got to do is come prepared with a sum of money to invest, have a list of your short-term and/or long-term goals, set an investing time horizon and risk tolerance, and Wealthsimple takes care of the rest .

Like many robo-advisors and automated accounts, its managed portfolios offer features like dividend reinvesting, portfolio rebalancing, and automatic deposits. Plus, it offers two unique portfolio options:

  • Socially responsible portfolios: These portfolios are great for investors who want to positively impact the world on an environmental and social level. As for its asset allocation, it invests in ETFs of both socially responsible companies in globally developed markets and socially responsible companies in North America. Wealthsimple says it also uses bonds and gold to hedge against the equity risk associated with the ETFs in your portfolio.
  • Halal portfolios: This option could be a great choice for those who’d like to invest in a way that honors Islamic law. Unlike the socially responsible portfolios, its asset mix consists of Shariah-compliant ETFs in globally developed markets, gold, and non-interest bearing cash. It says it uses a third-party committee of Shariah scholars to screen each investment.

Another highlight of Wealthsimple’s socially responsible portfolios is that it removes the top 25% carbon emitters in industries it selects for ETFs. In addition, it ensures that each company in its fund has at least three women on its board of directors.

As for fees, it offers three separate pricing plans: the Basic plan, the Black plan, and the Generation plan. The basic plan — which includes the option to ask portfolio managers questions — has a $1 minimum and 0.5% annual fee. With the Black plan, you’ll incur a $100,000 minimum and 0.4% advisory fee, but you’ll gain access to things like estate planning and health perks.

Finally, the Generation plan has a $500,000 minimum and 0.40% fee, but you’ll gain exposure to multiple experts who can tailor your portfolio according to your needs. Its management fees are high compared to other automated platforms like Betterment, Wealthfront, and Fidelity Go.

Wealthsimple: Is it trustworthy?

The Better Business Bureau gives Wealthsimple Financial Inc. an F rating. Ratings typically range from A+ to F and reflect the BBB’s opinion of how well a company interacts with its clients.

However, several other factors can also determine a company’s rating. These include customer complaint history, type of business, time in business, licensing and government actions, and advertising issues. The bureau says its rating for Wealthsimple stems from the fact that it received 17 complaints and failed to respond to 12 of them.

Its BBB profile shows that it closed 17 complaints in the last three years and six complaints in the last 12 months.

Wealthsimple — Frequently Asked Questions (FAQ)

Is wealth simple good for beginners?

Wealthsimple is a competitive option for both beginners and experienced investors or traders in search of low fees, copious investment options, and a simple user interface. The platform also offers a library on all things personal finance, and it provides an income tax calculator to simplify the tax process.

Can I do day trading on Wealthsimple?

yes Wealthsimple doesn’t encourage this type of trading, but it allows it.

Can I trust Wealthsimple Cash?

yes With the Wealthsimple spending account, you get coverage of up to $100,000 through the Canadian Deposit Insurance Corporation (CDIC), and you can earn rewards of 1% back in cash, stocks, or crypto. You just have to make purchases using your Wealthsimple Visa card.

Leave a Reply

%d bloggers like this: