Wealthsimple review 2024 - MoneySense (2024)

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Since launching in 2014, Wealthsimple has developed a strong reputation for offering online, easy-to-use, low-fee financial services. It’s come a long way since its humble beginnings exclusively as a robo-advisor (now known as Invest). It now offers:

• 1. Managed investing:This includes their robo-advisor and private equity options.
• 2. Self-directed investing:Formerly its own app called Wealthsimple Trade. This includes stocks, ETFs and options trading.
• 3. Spend and save:Spending and saving accounts with a prepaid rewards debit card (Cash).
• 4. Tax filing:Online tax filing serviceformerly known as Wealthsimple Tax.

Which, if any, of these services are right for you? Here’s what you need to know about investing or trading with Wealthsimple, including its various product offerings, how it works, and their associated fees.

If you’ve used Wealthsimple in the past or used some of its products, know that while Invest, Trade and Cash were offered under separate apps, they’re now all part of just one Wealthsimple app—which has made the user experience more convenient. Only Wealthsimple Tax maintains a separate app/platform.

Investing with Wealthsimple: robo-advisor or discount brokerage?

Both Wealthsimple Invest and Wealthsimple Trade are excellent low-fee investment options. Choosing between the two services comes down to three factors:

• How confident you are in managing your money on your own.
• How much time and effort you want to put into managing your investments.
• Whether you’re willing to pay higher fees for a truly hands-off option.

If you aren’t interested in choosing your own investments, Wealthsimple has a robo-advisor which falls under their “managed investing” option. Once you create an account, you’ll be recommended one of three “classic” diversified portfolios ofexchange-traded funds(ETFs)based on suitability factors such as your financial goals and risk tolerance. In addition, it has a “socially responsible investing” portfolio and a “halal portfolio.”

With the robo-advisor option pretty much everything is on autopilot once you fund your account. You can set up pre-authorized transfers to invest on a regular basis.

You should know, though, even if you want to alter or tweak your portfolio in any way, you won’t be able to do this. If your aim is to pay as little as possible in fees and you’d like to choose your own ETFs, stocks and/or want to invest in cryptocurrency, their self-directed option may be better for you.

What are the fees for Wealthsimple’s robo-advisor and its discount brokerage?

Managed investingcharges two types of fees:

• Portfolio management fee
  This is an annual percentage of the total money you have invested—calculated daily and charged monthly. For clients with balances less than $100,000, that fee is 0.5%; balances of $100,000 or more are charged at a rate of 0.4%; balances of $500,000 and more are charged at a rate of 0.2-0.4%.
• MER
  Each individual ETF has its own fee set by the ETF provider, which you’ll see referred to as the fund’s management expense ratio (MER). Fund MERs do vary:
• “Classic” portfolios have a rate of 0.12%, socially responsible investing (SRI) is at 0.22% and the Halal portfolio is at 0.42%.

Self-directed investing fees depend on the type of investments you choose:

• Stocks
  $0. There are no commission fees to buy, sell or trade stocks, and no account or management fees of any kind.
• ETFs
  All ETFs still have a MER, but you’ll have thousands to choose from—including those with fees as low as 0.05%. And that’s all you’ll pay—there are no commissions or account fees.
• Crypto
  Crypto trading fees are 2% (for “core” clients), 1% (for “premium clients”) and 0.5% (for “generation” clients). There’s no cost to deposit or withdraw coins. Also, if you stake coins on Wealthsimple, you’ll pay them 30% of your staking rewards.

The one exception to stock and ETF fees with Wealthsimple is a 1.5% foreign exchange conversion feefor investing in U.S. equities. That’s because you can only hold Canadian currency in your account under the basic plan. You can avoid this fee by paying US$10 per month, which lets you hold U.S. dollars in your account. Also, customers with over $100,000 in their accounts (“premium” and “generation” tiers) don’t get charged this FX fee.

Read our reviews for Wealthsimple Invest and Wealthsimple Trade below for more information about their fees and services in general.

• Wealthsimple Invest
• Wealthsimple Trade

Pros and cons of investing with Wealthsimple

Pros

• Easy setup
  It takes just a few minutes to set up a Wealthsimple managed investingaccount. After inputting your personal information, including your social insurance number, you answer a survey about your finances and investing knowledge. Based on your answers, you are matched with one of three broad portfolios based on your risk tolerance and investment timeline: conservative, balanced or growth.

• No minimum deposit
  It’s worth noting that while many online investing platforms require a minimum deposit of at least $1,000 when signing up for a robo-investing account, there’s no required minimum to create an account with Wealthsimple Invest.
  If you fund your account with $10, Wealthsimple will invest most of that into the ETFs that are part of your chosen portfolio, in whichever account type you choose, including registered retirement savings plans(RRSPs), tax-free savings accounts (TFSA) or another type. (Wondering how much room you have in your registered accounts? Check out our TFSA contribution room calculator and our RRSP contribution limit calculator.)
  For Wealthsimple Trade, its discount brokerage product, you can fund your account with as little as $1.
• Low fees
  As mentioned above, the managed investing portfolio management fee is either 0.2% or 0.5% (depending on the total amount of money you invest). You will also pay a MER that starts as low as 0.12%. If you’re managing your own investments, there are no fees to buy, sell or trade stocks or ETFs using the online brokerage.

• Automatic rebalancing
  Portfolio rebalancing is when you buy and sell securities in your portfolio to return your holdings to its original strategic allocation. In their managed portfolios, Wealthsimple offers this for free based on changes in the market, deposits/withdrawals, changes in your risk score, as well as changes in the ETFs themselves.
• Dividend reinvesting
  With managed investing,your dividends are tracked and automatically reinvested the day after they are received. Once earned, the dividends are used to rebalance your portfolio by purchasing the ETF that’s furthest from its strategic weight.

• Account options
  For managed investing, you have quite a few choices for products with Wealthsimple, including RRSP (as well as spousal RRSP), TFSA, registered education savings plan (RESP), first-home savings account (FHSA), locked-in retirement account (LIRA), life income fund (LIF), non-registered (personal or joint account with no limits), registered retirement income fund (RRIF), cash (for savings and spending), as well as corporate account options. Wealthsimple Trade accounts, however, are currently limited to personal, RRSP, TFSA and crypto.
• Micro-investing options
  With its Roundup feature—which has changed since 2022—Wealthsimple will round up the price of everyday purchases made using your Wealthsimple Cash (spending) card to the nearest dollar and automatically deposit this “spare change” into an investment of your choice: stocks, crypto or your cash account.

• User experience
  Both its app and its website are slick and easy to use. You can track TFSA and RRSP accounts to ensure you don’t over-contribute to your registered accounts. (Wealthsimple.com won a Webby Award for Best Financial Services Website—twice.)
• Reputable brand
  As of 2021, Wealthsimple had $20 billion in assets under management, and more than 3 million users. Plus, since 2016, it’s been recognized as one of the top 100 Global Financial Technology Companies by Fintech 100.
• Passive investing
  Wealthsimple’s robo-advisor advocates low-cost, passive investing using the power of ETFs. The likes of Warren Buffet have advocated the principle of buy-and-hold, and ETFs historically outperform actively managed mutual funds over the long term. And, because you lose less of your return to fees, you could get a better net return.
• They may cover transfer fees
  Wealthsimple mayreimburse administrative transfer fees up to $150on investment transfers into Wealthsimple which are greater than $5,000 in value.
• Socially responsible investing (SRI) and Halal options
  Both SRI and Halal (investments that comply with Islamic law) options are available for Canadian investors. These provide the opportunity for investors who want to support companies that prioritize environmental and social concerns or who wish to invest their money in compliance with Islamic law.

• Valuable benefits
  Investors with over $100,000 in Wealthsimple’s managed portfolios get a 15% discount to the Canadian online will service Willful, and six months of free access to emergency care with Medcan’s Year-Round Care plan. Those with over $500,000 can also get 50% off Medcan’s Comprehensive Care plan that includes testing, travel health support and more; they’ve also partnered with DragonPass to offer “generation” clients 10 airport lounge visits per year.
• Seamless money movement
  Wealthsimple investors can seamlessly move money between their accounts, such as stocks and ETFs, crypto, and cash. For example, you can fund your Cash account, deposit money into your Trade account, make a profit on a stock trade, and then transfer the profit into your crypto account to buy bitcoin, if you wanted to.

Cons

• Few human advisors
  Connecting with real-life advisors is limited to those with at least $100,000 in their Wealthsimple accounts. But if you have administrative questions about your accounts for example, there is a “help centre” with lots of frequently asked questions, information and resources. And if you want to talk to a support representative, they’re available for an online chat or a phone call during business hours and by email 24/7.
• Tax optimization
  When you have investments of over $100,000 with Wealthsimple, you can get help with “tax-loss harvesting.” This helps to offset capital gains with capital losses, thereby trimming your capital gains tax bill. Unfortunately, this service is not available to clients with a basic account.
• Limited portfolio options
  For investors with under $500,000 invested, Wealthsimple’s robo-advisor offers just three portfolio options—which is fewer than some of its competitors. This may prove to be limiting for those who want to get more granular portfolio customization.
• No physical branches
  Investors cannot meet with advisors in person. If you need to speak with someone who’s not automated, you can chat online or call during regular business hours, email 24/7, or, if need be, file a complaint viathe help centre. To speak with a physical advisor, you need to have over $100,000 with Wealthsimple.
• Higher MER for SRIs
  Fees charged on SRI and Halal funds are higher than Wealthsimple’s “classic” portfolios. The SRI MER is 0.22% and the Halal MER is 0.42%.

A Wealthsimple review for 2024: Invest, Trade and Cash

A technology-driven, easy-to-use, and low-cost investment service launched in 2014–has three main offerings. Here’s a look at each.

Wealthsimple Managed Investing

The robo-advisor service from Wealthsimple is ideal for novice investorsor those who are not comfortable managing their own investment portfolio. The algorithm recommends a portfolio for you based on your financial goals and risk tolerance.

Clients spend a few minutes answering questions online about their age, comfort level with risk and investment goals. Your answers determine which portfolio is recommended: Conservative, balanced or growth. There are also SRI and Halal investment options, as noted above. Recently, Wealthsimple has added two more options: a private credit fund which targets a yield of 9% and private equity offered through LGT Capital Partners.

You can put your investments into many different types of accounts, including registered, such as RRSPs, TFSAs, RESPs, FHSAs, non-registered accounts and more.

In terms of cost, Wealthsimple’s managed investing fees are as follows:

1. There’s an overall portfolio management fee of 0.5% for accounts of under $100,000; 0.4% for accounts of $100,000 and above; 0.2%-0.4% for accounts worth over $500,000.
2. The MER on Wealthsimple’s ETFs range from about 0.12% to 0.42%

So, depending on the size of your portfolio and the types of ETFs you hold, the total fees could range from about 0.4% to just under 1% per year—calculated daily and charged monthly.

What does that look like? You’d pay about $200 to $500 in annual fees for a $50,000 portfolio.

Wealthsimple Self-Directed Investing

For those who want to lower the costs of investing even further—and who are also interested in building their own portfolios with select ETFs, stocks and cryptocurrencies—Wealthsimple’s discount brokerage service is an appealing option. That’s because all its ETF and stock purchases, sales and trades are free of charge. (You still pay the management fees, or MERs, on ETF holdings, as explained above.) Crypto trades cost 0.5% (“generation” tier), 1% (“premium” tier) or 2% (“core” tier) and there’s no fee to deposit or withdraw coins.

Wealthsimple clients make their transactions online using a mobile app and can hold their portfolios in four account types: personal (non-registered), TFSA, RRSP and crypto.

Canadian investors using this service can buy ETFs and stocks listed on the NYSE, NASDAQ, TSX, TSX-V, NEO, Cboe and CSE exchanges. There are also limited securities available on the BATS Exchange.

On the plus side, fractional shares are available, which makes it easy to purchase stocks even with relatively small amounts of money. And from a cost perspective, free trades are hard to beat, given that some other discount brokerages charge up to $10 a transaction.

So, how does Wealthsimple make money on its self-directed services?

Wealthsimple says earnings come primarily from a 1.5% currency exchange fee, which includes a spread, charged on Canadian-to-U.S. dollar conversions (and vice-versa). The currency conversion is necessary when trading U.S.-listed securities in a “core” account.

Alternatively, there’s a premium $10-per-month plan, which lets you hold U.S. currency in your RRSP, TFSA or personal account. With this account, in addition to commission-free trading, you’ll be able to buy and sell U.S. stocks without the worry of foreign exchange (FX) fees.

Wealthsimple Cash

Wealthsimple Cash is a spending and saving service with a cash-back rewards Mastercard. It provides a secure way to send and receive money with no account or transaction fees and no exchange fees on foreign transactions (aside from the currency conversion itself).You can send or receive up to $5,000 per day, with no limit on the number of transactions and no security questions (you’ll get two-factor authentication for added security).

Additionally, apart from using Interac to transfer money, you can use Cash to send and receive money from other people on the app, by simply sharing your unique handle with them. Unlike some other services for sending and receiving money, Wealthsimple Cash doesn’t require a phone number or email address, so you don’t need to give out your personal information.

You can get a Wealthsimple Cash Mastercard in digital (on your phone) and physical form (in your wallet). With this card, you can make everyday purchases and withdraw funds from ATMs. And what’s more? You earn 1% cash backin the asset of your choosing: stocks,crypto, or cash. The card is essentially a prepaid/secured Mastercard card, so you can use it online or in stores wherever Mastercard is accepted.It is compatible with Apple and Google Pay.

You Cash account is available on the Wealthsimple app and is quick and easy to setup. You’ll have access to a virtual Wealthsimple card immediately, and a physical card will be mailed to you.

Making Wealthsimple’s Cash offer even more attractive is a 3.5% to 4.5% interest rate currently being offered for deposits—and this isn’t a promotional rate. Funds in a Wealthsimple Cash account are protected by the Canadian Insurance Deposit Corporation (CDIC) up to specified limits. You can even get free cash for inviting your friends to use the app.

Read our review of Wealthsimple Cash.

What’s not to like about Wealthsimple?

Wealthsimple clearly makes it easy to invest, trade and manage your cash, with no required minimum amounts, no transaction fees, no trading fees, a user-friendly website and app, and human experts available to help at any time.

There are, however, a few considerations to keep in mind:

• Investment options:Wealthsimple Investclients are limited to the boilerplate portfolios that are chosen for them. If you want access to other ETFs, you’re out of luck. Similarly, Wealthsimple Tradeclients are limited to certain stocks, ETFs and cryptocurrencies, without access to bonds, international equities, precious metals and many other asset types offered by other discount brokers.
• Fees:While the $350 Wealthsimple Investannual fee from our example above might not sound too bad, consider what happens once your portfolio is in six-figure territory. Even with the management fee drop to 0.4% for accounts over $100K, once you add in the ETF fees you’re looking at total fees of about 0.6% (or up to 0.92% for the Halal portfolio). That’s $600 to $920 in fees per $100,000 in investments per year. As for Wealthsimple Trade,the no-fee Basic plan will be attractive to many, but the 1.5% currency conversion fee might prove too costly for those who wish to invest in U.S. stocks and ETFs. If buying and selling U.S. equities is important to you, there’s a $10-per-month plan that allows you to hold these investments in U.S. currency without the worry of foreign exchange fees.
• Account types:While other discount brokerages offer a full range of accounts, including RESPs, LIRAs, RIFs, LIFs, and margin accounts, Wealthsimple Tradehas only personal, TFSA and RRSP accounts.

Wealthsimple clearly makes it easy to invest, trade and manage your money, with no required minimum amounts, no transaction fees, no trading fees, a user-friendly website and app, and real-life experts available to help.

There are, however, a few considerations to keep in mind:

• Investment options:Wealthsimple’s managed investing clients are limited to three “classic”boilerplate portfolios that are chosen for them based on their financial goals and risk tolerance. Some other robo-advisors offer a larger selection of ETF portfolios. Similarly, DIYCanadian investors are limited to stocks, ETFs and cryptocurrencies, without access to bonds, global equities, precious metals and many other asset types offered by other discount brokers.

• Fees: While 0.5% to 1% may not seem like much of a rate for the Invest robo-advisor service, the dollar amount paid adds up over the long term. For example, if you invested $6,000 every year for 20 years, assuming an annual return of 6% and a fee of 0.5%, you’d pay a total of $13,240 in fees. At the higher end of the fee spectrum, i.e., at 1%, the total fees paid would be $25,641. As for Wealthsimple Trade,the no-fee basic plan will be attractive to many, but the 1.5% currency conversion fee might prove too costly for those who wish to actively trade in U.S. stocks and ETFs. If buying and selling U.S. equities is important to you, there’s the $10 monthly fee plan that allows you to hold these investments in U.S. currency without the worry of foreign exchange fees, but it costs $10 a month (so, clearly not no-fee).
• Account types:While other discount brokerages offer a full range of accounts, including RESPs, LIRAs, RIFs, LIFs, and margin accounts, Wealthsimple Tradehas only personal, TFSA and RRSP accounts—in addition to a crypto account.

So, should you use Wealthsimple?

For Wealthsimple Cash, the no-fee aspect (including no exchange fees on foreign transactions) and 1% backin stock, crypto, or cash on all purchases is appealing. And would-be investors who might otherwise endlessly procrastinate on setting up a portfolio will benefit big-time from Wealthsimple’s robo-advisor service. Investing in a diversified portfolio of low-fee ETFs has historically returned more than bank interest over the long term and is a simple and effective way to keep the purchasing power of your savings from being eroded by inflation.

Similarly, DIY investors who want to buy and trade ETFs and stocks will undoubtedly save money on fees with their commission-free trading service.

On the other hand, managed portfolioclients with larger portfolios may want to consider otherrobo-advisorsthat may offer lower fees, and DIY investors who want more investment and account options may consider otherdiscount brokers.

But there’s no question Wealthsimple has a lot going for it.

Read more on investing:

• Bookmark this: The MoneySense Glossary for personal finance and investing terms—for Canadians
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• Making sense of the markets this week
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