In this review, we will explore all three products offered by Canada-based investment management firm Wealthsimple after using the platform for over a year. In particular, investing on autopilot, commission-free stock trading, and the platform’s saving accounts will all be analyzed, among other features.
Wealthsimple is an international, online investment management service established in 2014 by two Canadians. The company has managed to earn the trust of more than 3 million customers and currently holds over 15 billion Canadian dollars in assets under management as well as employing over 235 people across offices in Toronto, CA, New York City, USA, and London, UK.
Wealthsimple is primarily an online investment management service that enables you to invest on autopilot. In addition, you may open a savings account online and take advantage of commission-free stock trading.
Is Wealthsimple safe?
When it comes to entrusting your money to any financial service, it is essential to research whether a particular financial product is both safe and reliable. The credibility of a Fintech Company is usually determined by several factors, such as whether it is regulated in a trustworthy jurisdiction, its membership among other well-respected organizations, and if the customer funds are insured.
In 2015 Wealthsimple acquired Canadian ShareOwner Investments Inc. (ShareOwner), which acts as a custodial broker for their services. Securities in all Wealthsimple accounts are protected through ShareOwner by the Canadian Investor Protection Fund (CIPF) within specified limits (see table below).
It is important to note that the CIPF provides insurance when the CIPF member firm’s insolvency causes a financial loss, but it will not cover your losses in the stock market, exchange-traded funds (ETFs), etc.
|Limits for Individuals||$1 million*|
|Limits for Corporations, Partnerships and Unincorporated Organizations||$1 million*|
* Some limitations and exceptions may apply; please click here to learn more.
It’s also worth noting that ShareOwner is a member of the Investment Industry Regulatory Organization of Canada, also known as IIROC, which provides additional protection and regulation.
Both Wealthsimple Inc. and Canadian ShareOwner Investments Inc. are incorporated in Canada, which means they are federally regulated and governed by Canadian law.
Note: On May 2, 2022, Canadian ShareOwner Investments Inc. changed its name to Wealthsimple Investments Inc.
- Securities and funds insured by CIPF up to $1 million;
- Incorporated in Canada and governed by Canadian laws and regulations;
- Member of Investment Industry Regulatory Organization of Canada;
- $265 million in raised investments from the Power Financial Group and Allianz X;
You can visit Wealthsimple here.
User experience with Wealthsimple products
As mentioned before, there are three main products that Wealthsimple is offering:
- Wealthsimple Invest;
- Wealthsimple Cash;
- Wealthsimple Trade.
Once you become a Wealthsimple customer, there is a good chance that you will end up using a combination of Wealthsimple products, and it’s fundamental to understand how they interact together.
From the early days, Wealthsimple was branded as a financial product line focused on millennials because of its simplicity and easy-to-understand interface. However, one major downside that we specifically found after using Wealthsimple for over a year is that Wealthsimple Trade can only be used via the mobile app.
In contrast, Wealthsimple Invest and Wealthsimple Cash can be used via app and website interface. It creates somewhat of an inconvenience when you want to see your investment and saving performance across all Wealthsimple products. That is the primary reason why we have ranked the overall user experience 8 out of 10.
On the bright side, you won’t have to create a separate account when you start using Wealthsimple Trade. Conveniently, if you already have Wealthsimple Invest, you will be able to use the same login credentials.
How much can you make with Wealthsimple?
It depends on which Wealthsimple product(s) you will be using, but ultimately Wealthsimple has very little to do with how much you will make. For example, Wealthsimple Invest provides you with an investment strategy and a platform that allows you to utilize that investment strategy, but everything boils down to overall market performance. You can read about this in more detail by clicking a particular Wealthsimple product review button on the side.
Another important factor is your own risk tolerance. Usually, riskier investments such as stocks carry more potential for higher returns, but at the same time can lead to more significant losses.
If this is not the first review you have read about Wealthsimple, you may be familiar with some negative reviews regarding the slow support. Personally, we have experienced few instances where we have had to reach out to customer support, and when we have, our experience was nothing but great. We assume that perhaps such negative reviews come from the early days when Wealthsimple was still learning how to cope with a large influx of new customers.
There are two primary options for how you can reach Wealthsimple support. If you are a millennial, you probably will appreciate the option to create a support ticket, but if for some reason you prefer calling, the help center number is provided at the bottom of the Wealthsimple help page.
Prerequisites for opening a Wealthsimple account
To create a Wealthsimple account, you will need to go through a reasonably quick registration process.
To open an account you will need:
- To be a Canadian citizen, Canadian resident, or have a valid Canadian visa.
- To be at least 18 years old.
- A Social Insurance Number (SIN).
- To have a Canadian residential address.
- And be able to meet identity verification requirements.
As long as your details can be verified with a credit reporting agency, your account will be opened immediately. However, in some instances where your information can’t be verified, Wealthsimple will ask you to correct the information or provide additional documentation.
Wealthsimple Invest review
Wealthsimple Invest is by far the most popular product that Wealthsimple is offering. The notion behind Wealthsimple invest is that investing should be made easy.
Primary Wealthsimple’s investment strategy is diversification; this allows them to achieve higher returns with less risk for their customers. Another important principle that Wealthsimple employs is the fact that in the long term, overall market value is always growing. Over many years markets have survived countless depressions, wars, economic uncertainties and bubbles, however, buying and holding assets proves to be one of the most successful investing strategies.
You, as a customer of Wealthsimple Invest, will become a passive investor in the sense that all the heavy lifting is done by the team of finance experts from Wealthsimple. That being said, you still have full control over how much risk you are willing to take.
How much can you make with Wealthsimple Invest?
Since all the portfolios are well diversified, your profit depends on how overall markets are doing, and this is outside of Wealthsimple control. However, you as a customer do have control of the risk level of your portfolio. Lower risk means lower volatility but consequently lowers return. A higher risk level, on the other hand, has more potential to generate greater returns, but at the same time can sustain higher losses.
As mentioned above, the main principle is to buy and hold; the longer you hold the assets the better overall outcome can be expected.
To give you an idea this is an example of Growth portfolio performance since inception:
The average yearly return for the Growth portfolio is approximately 5.0%. Please note, that past performance does not guarantee the same results in the future.
What are Wealthsimple Invest Fees?
Wealthsimple Invest fee structure is very simple – they charge 0.5% (for those who invest under $100,000, and 0.4% for those who invest more) per annum of your investment portfolio market value.
The Wealthsimple management fee is calculated daily and applied monthly. Please see an example below:
0.5% (annual fee quote) / 365 (days in a year) = 0.00136986301% per day, so if your porfolio value is $10,000 your estimated monthly fee would be ~$4.24.
Pros and Cons of Wealthsimple Invest
- Simple and straightforward user interface;
- Low management fee of 0.5% per year;
- Your investments are insured up to 100k CAD*;
- Allows automated deposits.
- The deposit takes a few days to reflect on the bank statement;
- Failed auto-deposit might show as a successful deposit until it’s corrected;
- Does not allow to fund the account using a debit or credit card.
It’s hard to find a negative thing to say about Wealthsimple Invest, however after using it for so long we managed to catch a couple of annoying bugs that seem to appear on both, desktop and mobile apps. While these bugs are totally harmless, they might freak you out a little bit, if you are new to the platform.
Negative returns glitch
Note: We have noticed that when you have an auto-deposit set up, the day when your deposit should be credited – your returns briefly turns negative. This bug is harmless and goes away the next day, but it is a glitch nevertheless.
How to use Wealthsimple Invest?
In order to start using Wealthsimple Invest, you need to open an account by clicking the button below.
Once you go through the self-explanatory registration process and your account is approved, you can start investing at whatever pace you desire.
Our recommendation would be to take it slow at first before you familiarize yourself with the platform. You have full control of your deposits and there are no hidden fees if you decide to cancel or withdraw your investments.
Wealthsimple Trade review
Wealthsimple trade allows commission-free stock and ETFs trading and makes it a perfect tool for a retail investor. One of the most appealing things about Wealthsimple trade is the simplicity of their app, after using it for a while we can tell that it’s pretty much fool proof tool to do stock and ETF trading.
Wealthsimple also offers the option to trade fractional shares. Fractional orders allow you to buy and sell shares in fractions or decimals, meaning you can trade less than one full share of an asset.
When you place a fractional buy order with Wealthsimple, you will be asked to enter the amount of money you want to spend on your chosen security. You will then get an estimate of how many fractional shares you will receive. This estimate of a fractional number of shares will change throughout the day and depend on the stock price when your order completes.
Secondly, pay attention to the stock or ETF currency you want to purchase, let’s say you want to buy 1 Apple stock at $140 USD you need to deposit enough CAD so that after conversion you have enough funds to place the order. Generally, it’s advisable to deposit a little bit of overhead to cover market fluctuations and currency rate fluctuations
Also, it’s important to mention that market, limit, and stop limit orders are supported in the app. This means that you can set up your order to execute when your chosen asset’s market price meets a certain amount.
Which particular stocks can you trade on Wealthsimple trade?
Stocks and ETFs trading is supported on the following exchanges:
- Toronto Stock Exchange (TSX);
- TSX Venture Exchange (TSXV);
- New York Stock Exchange (NYSE);
- Canadian Securities Exchange (CSE);
- BATS Exchange.
Wealthsimple supports stocks and ETFs in self-directed trading accounts. They don’t support the following assets in self-directed trading accounts:
- Mutual Funds;
- Preferred Shares;
- Securities that trade Over-the-counter (OTC);
- Forwards & Futures;
- Stock Rights and Warrants;
- Investment Savings Accounts & Money Markets;
- Stocks & ETFs that trade on non-North American exchanges.
Trading on Wealthsimple Trade is $0 commission, which means there is no brokerage fee for placing orders.
Wealthsimple does have a small currency exchange when you make USD trades. They basically add a +1.5% fee to a current market exchange rate. Generally, any other broker would add a +2% fee for forex.
The way Wealthsimple Trade can afford to offer commission-free trading is through technology and automation of their brokerage, this brings their operating cost down providing them with a competitive advantage.
Pros and Cons of Wealthsimple Trade
- Trading underlying assets (stocks and ETFs);
- $0 Commission;
- A modern app that works on both iOS and Android;
- Can use Wealthsimple Cash to fund Wealthsimple Trade;
- Can trade over 9000+ assets.
- 15 min delay on price quotes;
- Takes approx. 3-4 business days for the deposit to become available to trade;
How to use Wealthsimple Trade?
To start using Wealthsimple trade, you need to open an account with Wealthsimple; you can do so by clicking here. We already discussed the pre-requisites for the above in this review.
Once that is taken care of, you will be linked to download the Wealthsimple Trade app either for iOS or Android devices, depending on your smartphone’s operating system.
After you successfully install the app, use your Wealthsimple account credentials to log in to your account. From there, the app will offer you to set up funding. The process of adding funds is self-explanatory, so you should have no issues there.
As we mentioned before, it takes a few business days until your funds are available to trade after a successful deposit. Once funds are available, it’s all on you to decide which stocks or ETFs to trade. Stock trading is generally much riskier; therefore, never invest money that you can’t afford to lose.
Wealthsimple Cash review
In a nutshell, Wealthsimple Cash is a better savings account that allows you to save and spend simultaneously.
Wealthsimple Cash app (US and UK users only)
Cash App is an app that allows users to send and receive cash. This free account lets you instantly transfer money without paying fees. It links to your bank account, from which you can transfer funds to use via Cash App, or to which you can withdraw the money you’ve accumulated in Cash App. Finally, there are no account minimums, no fees, and no limits on how many transactions you can make.
Furthermore, Cash App allows users to get a Cash Card, a free Visa debit card that you can use to pay for things online or at brick-and-mortar stores as well as make ATM withdrawals. Payments and withdrawals via the Cash Card are deducted from your Cash App balance. In addition, the Cash Card comes with “Boosts,” discount offers for places you are likely to frequent. You can also use Cash App to invest in stocks (with as little as $1) and to buy and sell bitcoin.
What’s more, customers can earn back 1% in stock, crypto, or cash using their Wealthsimple Card. For crypto, users can choose from any 40+ coins that Wealthsimple offers as their reward and then automatically earn 1% back whenever they spend. With stock rewards, your 1% back will be awarded as a cash balance into your Stock & ETFs account, from where can purchase whichever stock you like.
Note: Cash App is only available to US and UK users.
Wealthsimple also offers a savings account with a high rate of interest, currently 1%, and unlimited free transfers and withdrawals. In addition, because they have no account minimum, you can get started with as little as $1. To top it off, there are never any hidden fees or penalties. The platform lets you automatically move a set amount of cash to your Wealthsimple account every month or round up any spare change from debit or credit card purchases into your account.
There are no fees associated with having a Wealthsimple Cash account. Wealthsimple doesn’t charge any monthly account fees, exchange fees on foreign transactions, minimum balance fees, or ATM fees. However, don’t forget to declare your earnings when filing your tax return, as interest is taxable income.
Pros and Cons of the Wealthsimple Cash app
- 1% cash back (stock, crypto or cash) on all eligible purchases;
- The industry-leading interest rate at 1%*;
- Supports joint accounts;
- Savings are CIPF protected;
- No monthly account fees;
- No low balance fees;
- Can transfer funds from Wealthsimple Cash to Wealthsimple Invest or Wealthsimple Trade;
- Free Visa prepaid card;
- Start with as little as $1.
- Only available in the US and UK
* The interest rate is subject to change at any time. Some of the factors that determine the interest rate is overall world’s economy.
How to use Wealthsimple Cash?
In order to start earning interest with Wealthsimple Cash, you need to open an account by clicking the button below. Please note that technically both Wealthsimple Cash and Wealthsimple Invest work using the same account, so by opening the Wealthsimple account you will have access to both products immediately.
FAQs about Wealthsimple products
What is Wealthsimple Invest?
Wealthsimple Invest is one of a few Wealthsimple products that they are offering. To explain it shortly, it’s investing on autopilot. By using Wealthsimple invest, you allow them to do what they do best – create and research investment strategies that you can use for your investment portfolios. To learn more about how Wealthsimple operates, you can read the full review.
What are the fees of Wealthsimple products?
Wealthsimple Invest has a fee of 0.5% per year; the fee is calculated daily based on your portfolio market value and applied monthly. If your portfolio value is over 100K CAD, the fee goes down to 0.4%.
Wealthsimple Trade has a $0 commission, which means you do not have to pay anything for trading using their app. However, they do have a small 1.5% fee that applies to currency exchange when you want to trade USD stocks or ETFs.
Wealthsimple Cash is a free hybrid (between savings and checking) account that pays 1% interest on your savings as well as 1% back in stock, crypto, or cash when you pay with your Wealthsimple Card.
In which countries can I use Wealthsimple products?
Wealthsimple Invest currently is available in 3 countries – Canada, the United States and the United Kingdom.
Wealthsimple Trade currently are only available in Canada.
Wealthsimple Cash is available in the United States and the United Kingdom.
How much can I make with Wealthsimple products?
To put it shortly, the performance of Wealthsimple Invest portfolios highly depends on many outside factors, such as the overall economy’s health or particular ETFs’ performance. However, to give you an idea, the Growth portfolio has an average yearly return is ~5% over the last seven years.
Wealthsimple Trade returns depend on your trading strategy alone; therefore, we can’t answer how much you would make using it.
Wealthsimple Cash offers 1% yearly interest.