Wealthsimple Review: The Best One for Beginners

Wealthsimple is a Canadian online broker that has been around for less than ten years. In that time, it has become one of the best online investing platforms for people in Canada and other countries, like the UK.

Wealthsimple is best for people who want to invest automatically or on their own using smart technology. Broker simplifies complex investing processes and offers affordable money management. Wealthsimple was the first Canadian online broker to offer commission-free stocks and ETFs that allow trader to trade online and avoid branch visits. This broker has few tools and platforms for active traders. This broker may not be the best choice for active traders who want a robust mobile app. But it is a fintech company, not a traditional broker.

Wealthsimple : Website

Account Minimum: Stock and ETFs: $0 basic plan but $10/per month plus plan; $0 cryptocurrencies; Managed portfolios: $1 basic plan, $100,000 black plan, and $500,000 generation plan

Fees: $10/per month plus plan; up to 2% spread for crypto; 0.50% for basic managed portfolios and 0.40% for black and generation managed portfolios

Investment Types: Stocks, ETFs, and cryptocurrencies

Overview

Michael Katchen founded Wealthsimple in September 2014 in Toronto, Canada. It is a subsidiary of the Power Corporation of Canada. Wealthsimple’s mission is to help everyone achieve financial freedom, regardless of their background or wealth. Their superpower provides easy-to-use digital financial tools and resources to assist customers in managing their finances.

On March 4, 2021, Wealthsimple announced that they had sold their American accounts to Betterment. The transaction was finalized in the second quarter of 2021, and the American accounts were transferred. Wealthsimple transferred and sold its United Kingdom accounts during the first quarter of 2022. The business is focusing more on the Canadian market.

Wealthsimple has become one of the most popular online brokers in Canada, particularly among new and passive traders. By the end of the second quarter of 2022, Wealthsimple will have 1.7 million Canadian clients and $14.9 billion in assets under management. The company reported 14% growth year-over-year. In addition to being the first regulated crypto broker in Canada, they are continuously releasing new and improved features and services.

Customer Service

• The company offers customer service via phone, chat, and email. 24/7 customer service is available via email or chat (with a virtual assistant). A live chat agent is only available during normal business hours, seven days per week.
• Customer service representatives are available by phone during normal business hours, seven days a week.
• On the Wealthsimple website, a help center provides answers to frequently asked questions.
• Some product pages contain a Frequently Asked Questions section at the bottom.
• Customers can conduct trades with broker assistance via telephone. This service costs $45 per transaction.

Products

As an online discount broker, Wealthsimple has a limited choice of products. Mutual funds, options, futures, and fixed income are not available through Wealthsimple. The broker offers the following:

• Stocks (Canada and U.S-based stocks)
• Exchange-traded funds (ETFs)
• Penny stocks
• Cryptocurrencies (56 various of Crypto available) 
• Fractional shares (stocks and ETFs)
• Automated investing through Wealthsimple Invest (uses Robo-Advisor)
• Halal Investments (ETFs that comply with Islamic law) 

Pricing

Wealthsimple reveals all fees and costs associated with their products and services in the legal section of their website. Wealthsimple’s investment management fees are not the lowest among U.S. online brokers, but its no-commission stock and ETF trading make it competitive in Canada, where trading commissions are still prevalent.

• No commissions on stocks and ETFs based in Canada and the United States.
• Plan Wealthsimple Trade Plus: Broker offers two Wealthsimple Trade account plans: Basic (free) and Plus. The Plus plan is an upgrade with a monthly fee of $10. It also includes unlimited price alerts, unlimited real-time quotes, instant deposits of $5,000, and USD trade accounts.
• Customers on the Basic plan will be charged a 1.5% currency conversion fee when trading American stocks and converting between Canadian dollars (CAD) and United States dollars (USD). Customers can trade stocks and ETFs in USD without incurring a currency conversion fee under the Plus plan. However, Plus plan customers will be charged a 1.5% currency conversion fee when converting between CAD and USD.
• No fees or less are required for account opening or closing.
• There are no charges for inactive accounts or outgoing transfers.
• The cost of paper statements is $20.
• Special requests and investigations charge a $75 fee.
• The voluntary corporate action/election fee is $50.
• Both incoming and outgoing wire transfers charge a $30 fee.
• Withdrawal of a certificate charges a $250 fee.
• Broker-assisted trades charge a fee of $45.
• Wealthsimple charges management fees for assets under management, including digitally managed portfolios in Wealthsimple Invest. The fee for portfolios under $99,999 is 0.50 percent. The fee is 0.40 percent for portfolios exceeding $100,000.

Order Types

WealthSimple only offers four different order types. Market orders, stop-limit orders, limit orders, and other fractional orders are included. The order types are accessible via the Wealthsimple website and mobile application. They do not provide complex conditional orders or the ability to stage orders for entry at a later time. Broker focuses more on buy-and-hold investors than active traders, as the platform’s order system is straightforward.

Usability

Wealthsimple has become one of the leading online brokers and largest robo-advisors in Canada over the course of its eight-year existence. The broker’s primary objective is to ensure that individuals have access to financial tools and information that are neither overly complex nor prohibitively expensive. The website of Wealthsimple is intuitive and simple to navigate. You must create a profile on the website’s sign-up page before creating an account. Wealthsimple’s tools and resources are accessible via its website and mobile platforms.

The Wealthsimple platforms consist of the following:

• The website of Wealthsimple
• Wealthsimple’s mobile application (available for iOS and Android)
• Wealthsimple Trade, a platform for self-directed trading (available on the web and app)
• Wealthsimple Invest is a platform for automated trading that employs a Robo-Advisor (available on the web and app)
• Wealthsimple Crypto is a digital asset trading platform (only accessible in Wealthsimple Trade app)

Trade Experience

The website and app platforms of Wealthsimple are not as robust as those of some of their competitors. They provide easy-to-understand financial platforms and tools for Traders of all experience levels. If you are an active trader desiring more sophisticated features and tools, you may wish to consider other alternatives. Wealthsimple employs cutting-edge technology, such as automated investing with Robo-Advisors, which may appeal to novice and passive traders.

Wealthsimple’s Wealthsimple Trade platform is available in two plans. The plans are the free Basic plan and the $10 monthly Plus plan, which is an upgrade. Customers with the Plus plan have access to features such as unlimited real-time quotes and price alerts. Wealthsimple lacks a tool for generating investment ideas, and its analysis tools are limited. Customers have access to a charting tool on both mobile and website platforms. The charting tool may be ideal for new traders and expert traders who do not require a great deal of analysis data to monitor their investments. The charting tool lacks a drawing tool, and only a line chart is available. However, customers can modify the available timeframes to understand investment performance at various intervals.

Security, Reliability, and Transparency

• Wealthsimple’s app supports biometric authentication.
• The Canadian Trader Protection Fund safeguards the investment accounts of customers (CIPF).
• Customers’ cash accounts at Wealthsimple Cash, Wealthsimple Spend, and Wealthsimple Save are insured by the Canada Deposit Insurance Corporation (CDIC). The CDIC insures cash accounts in Canada for up to $ 100,000.
• Wealthsimple is the first authorized Cryptocurrency broker. Unprotected crypto assets exist. Wealthsimple claims that their custodian, Gemini, Inc., has a commercial criminal insurance policy for up to $200 million to cover stolen crypto assets due to a breach, hack, fraud, or theft.
• Wealthsimple offers two-factor authentication on their website and within their mobile app. Two-factor authentication is required for all customers.
• Wealthsimple encrypts customer data for security purposes.
• Wealthsimple follows the standards of the industry and makes sure that its security terms and procedures are always up to date.

Wealthsimple’s website contains a legal section with various disclosures. it provides transparent pricing and fee information for its products and services.

News and Education

When a customer creates a watchlist for a stock, they gain access to news pertaining to that stock. The Wealthsimple app offers customers access to stock market news and price alerts. However, this broker does not provide access to significant headline financial news on its platforms. Broker has a separate news section in their online Wealthsimple Magazine where they announce new products and services in addition to other significant company news.

Wealthsimple’s limited educational resources are intended to be manageable for novice traders. There is a wealth of foundational education available to help new traders learn the fundamentals. Experienced traders and active traders will find the educational resources to be lacking, and the platform is not designed for even intermediate trading strategies such as multi-asset position trading.

Wealthsimple provides various tips, advice, articles, podcasts, and YouTube videos. On their website, they also publish Wealthsimple Magazine. On their website, Broker offers a free retirement calculator for Canadians. There are two primary educational resources, which are:

• Personal Finance 101, personal finance videos, articles, and guides. 
• Investing Master Class, 10 short videos of someone teaching various financial topics such as the stock market and investing 101.

Pros and Cons

Pros Explained 

• The broker offers stocks and ETFs without commission fees. Wealthsimple Trade has additional fees, such as a 1.5% currency conversion fee. Customers can upgrade to the Plus version of Wealthsimple Trade for $10 per month. It costs $45 for broker-assisted trades.
• Wealthsimple is perceived as a competitive option for new traders due to the website’s user-friendly platforms and tools, the digital investment advisor, and the educational resources, which include Investing Master Class, Personal Finance 101, and an online retirement calculator. The Investing Master Class consists of ten short videos that cover a variety of topics, including the stock market, investing 101, and calculating the amount of money needed for retirement.
• The broker provides a robo-advisor-based automated investing platform called Wealthsimple Invest. The robo-advisor manages the customer’s portfolio, including rebalancing, based on the customer’s specific goals, needs, and risk tolerance, among other factors.
• The broker offers fractional trading in stocks and ETFs. However, customers cannot reinvest dividends in fractional amounts.

Cons Explained 

• WealthSimple provides a limited selection of platforms and tools. Wealthsimple only offers Wealthsimple Trade, Wealthsimple Invest, and Wealthsimple Crypto as trading platforms. Nonetheless, Wealthsimple Crypto is only accessible via the Wealthsimple Trade app. The platforms provide limited market news, advanced features, customizable screening, and research options, among other things.
• There is no security for crypto assets acquired via Wealthsimple. This broker informs clients of the risk associated with purchasing crypto assets. However, claims that its custodian, Gemini, Inc., has a commercial criminal insurance policy for up to $200 million to cover stolen crypto assets due to a breach, hack, fraud, or theft.
• Wealthsimple Trade is not synchronized with Wealthsimple Invest. Customers must create a separate account for each platform, and they cannot transfer funds between accounts.

Is Wealthsimple A Worth Broker to Get?

Wealthsimple offers numerous advantages for passive traders. The amount of educational content provided on Wealthsimple’s mobile and web platforms will not overwhelm new traders, but it is sufficient for easing you into investing. Digital investment management is the most passive solution, and while not as feature-rich or inexpensive as its U.S.-based competition, it accomplishes the task with diversification and automated rebalancing. The Wealthsimple Trade platform is more difficult to categorize.

This broker provides limited trading platforms, tools, educational resources, and research. Depending on the type of trader and their objectives, the services provided by Wealthsimple may or may not be sufficient. If you are a DIY trader primarily interested in buy-and-hold rather than trading, then Trade’s $0 commissions mitigate some of the platform’s shortcomings. Active traders and experienced traders in search of more robust and detailed analysis tools, research tools, and educational resources will have to explore alternative options. For Canadians, this most likely entails Questrade or a bank-affiliated broker, or, even better, Interactive Brokers, whose robust trading platform also serves the Canadian market.

Wealthsimple is a platform for investing that works well for all Canadians. It lets you trade stocks, ETFs, and options on your own or through managed portfolios at low costs. There are also socially responsible and Halal portfolios available on the platform, so it could be a good choice for passive traders who want various options.

FAQs

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Source: Investopedia