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Interactive Brokers vs. Wealthsimple Trade: Which One Is Better for Trading?

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Introduction

When it comes to online trading platforms in Canada. Interactive brokers Canada and Wealthsimple are considered two of the best in the business. The trading platforms are favorites of Canadian investors, serving the needs of both casual investors and active traders alike. The trading platforms have been popularized by their low cost and ease of use.

In this comparison, we will be going through the history of both companies, what they offer to their clients, how they charge for their services, and how they protect clients’ interests on their platforms.

After this review, the individual Canadian investor will have adequate information on which platform suits them best.

Disclaimer:

Equity investments are subject to market risks and may not be suitable for all investors. If you have any doubts as to the merits of an investment, you should seek advice from an independent financial advisor. So please invest at your own risk.

History

As with every story, we must start at the beginning.

Wealthsimple

Wealthsimple Inc was founded in 2014 by Michael Katchen and is based in Toronto, Canada. Their trading platform Wealthsimple Trade was later founded in 2019. The platform was built as the Canadian response to Robinhood, the American financial services company.

Wealthsimple trade gained popularity quickly due to its user-friendliness and ease of use. Wealthsimple currently has assets worth $15 billion under management and experienced a 14% year-on-year growth increase over the last year.

Wealthsimple was the first brokerage firm in Canada to offer commission-free ETFs and stocks. Over the last year, Wealthsimple has sold off all its American accounts and is now primarily focused on Canadian investors.

Wealthsimple-Inc

Interactive Brokers Canada

Interactive Brokers LLC was founded in 1978 by Thomas Peterffy and is based in Greenwich, Connecticut, USA. Its trading platform and subsidiary, Interactive brokers Canada (IBKR), wouldn’t come into existence until the year 2000. The trading platform was established to cater to Canadian investors. Interactive Brokers LLC currently has assets worth $9.33 billion under management and runs the largest electronic trading platform in the united states by the number of daily average revenue trades.

Due to its long history in the financial industry, Interactive brokers Canada boasts a competitive edge over many of its Canadian-based competitors due to its breadth of financial asset classes and services.

Interactive Brokers

  • Lowest and most transparent commissions
  • Large number of tradable security types
  • Robust suite of research tools
  • Low margin rates, from 0.75% to 1.59%
  • Access to 40,000+ funds worldwide & 7,700+ funds with no transaction fees
INVEST NOW →

Their Differences

Some of the differences of note between the two platforms include the following:

  1. Their Range of Offerings

Investment Accounts

Interactive Brokers Canada offers a vast selection of accounts to choose from. They include a non-registered account, a tax-free savings account, registered accounts, Joining accounts, registered retirement savings plans, informal Trust accounts, and Formal Trust accounts.

Wealthsimple trade, on the other hand, offers only three account types: TFSA, RRSP, and a personal non-registered account.

Investment Products

Interactive brokers Canada has many financial asset classes to invest in. They include Stocks, ETFs, Bonds, Options, Futures, Mutual funds, Precious metals, and Forex trading.

Interactive Brokers introduced Cryptocurrency trading to their platform to capitalize on the opportunities in cryptocurrencies in September of 2021.

Investors get access to 134 markets across the globe, not just the Canadian stock market when using Interactive brokers in Canada. Some of them include the ASX, KSE, LSE, NASDAQ, NYSE, TSE, XETRA, and more.

Wealthsimple trade, on the other hand, offers only Stocks, Exchange-traded funds, and Cryptocurrencies to its investors. Its operations primarily focus on North American Markets, namely the NASDAQ, NYSE, and TSX.

 

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  1. Commissions and Fees

Wealthsimple Trade

Wealthsimple trade’s rapid success and popularity came from the fact that they were the first to offer commission-free ETFs and stock trading.

But they do charge an FX fee for currency conversions. This is usually about 1.5%.

This cost can be waived when a client upgrades to wealthsimple trade plus, which comes at a $ 10-a-month subscription fee.

Other notable fees on the wealthsimple trade platform are:

A $45 fee for broker-assisted trades.

A $30 fee for domestic wire transfers.

A $30 fee for international wire transfers.

A management fee of 0.40 – 0.50% for their portfolio management services.

A $150 charge to transfer an account out of wealthsimple trade into another institution.

A 1.5 – 2% fee on crypto transactions as an operations fee

Interactive Brokers Canada

Unlike wealthsimple trade, Interactive brokers Canada does not offer commission-free trading on ETFs and Stocks for its Canadian clients. Interactive brokers Canada does instead have very low-cost fees compared to its competitors.

When it comes to Stock trading and ETF trades. Interactive brokers Canada offers Tiered rate and Fixed rate plans. The fixed rate on Canadian stocks is CAD 0.01, and USD .0.05 on US-traded stocks.

The Tiered-based plan depends on the range of monthly trade volume. Trading fees range from 0.003 to 0.008 CAD. Every order has a $1 minimum and a maximum limit of 0.5% of trade value.

Other notable fees on the Interactive brokers Canada platform are:

A $30 fee for broker-assisted trades.

A $10 fee for domestic wire transfers.

A $10 fee for domestic wire transfers.

Options per contract fee of $0.65 with a $1 minimum.

 

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  1. Trading Platforms

The wealthsimple trade platform offers basic and research trading tools and comes in a web-based version and the wealthsimple trade app. Their app is popular for its ease of use and accessibility, making it great for beginners and where you can conveniently trade stocks and ETFs.

It’s important to note that there’s a 15-minute delay or real-time market data such as price and quotes unless subscribed to wealthsimple trade plus.

The interactive broker’s trader workstation offers more advanced trading and portfolio analysis tools with in-depth fundamental and technical data, charts, and more order types.

It comes in web-based, desktop, and mobile platforms. Due to its comprehensive nature, the platform is popular with more experienced and advanced traders.

  1. Promotion

When you transfer an account into wealthsimple trade, you will get $150 waived if the transfer is more than $5,000

You get a free stock when you sign up and open an account with Wealthsimple trade. (Terms and conditions apply).

Interactive brokers Canada doesn’t offer similar or comparable incentives to its clients yet.

  1. Security

State-of-the-art data encryption and two-factor authentication are used on wealthsimple trade accounts to protect them from unauthorized access and data breach.

  1. Customer Service and Support

Interactive Brokers Canada has a 24/7 live chat. They are available Monday to Friday from 7.00 am to 7.30 pm and 9.00 am – 6.00 pm on weekends.

wealthsimple trade offers 24/7 virtual assistance via live chat. They are available Monday to Friday from 8.00 am to 8.00 pm and from 1.00 pm to 7.00 pm on weekends.

Their Similarities

Having reviewed the differences, we can now dive into what these two companies have in common.

First off, both Wealthsimple and Interactive brokers Canada are members of the CIPF (Canadian investor protection fund), which provides insolvency protection of up to $1 million and is regulated by the IIROC (Investment Industry Regulatory Organization of Canada).

Both Wealthsimple and Interactive brokers Canada do not charge Inactivity fees on accounts.

Both Wealthsimple and Interactive brokers Canada offer fractional share trading to their investors.

Both wealthsimple trade and Interactive brokers Canada have no minimum deposit requirement for their clients.

Both wealthsimple trade and Interactive brokers Canada offer Robo-advisor services. Quest wealth has Questwealth Portfolios, while Wealthsimple has Wealthsimple invest.

  • Lowest and most transparent commissions
  • Large number of tradable security types
  • Robust suite of research tools
  • Low margin rates, from 0.75% to 1.59%
  • Access to 40,000+ funds worldwide & 7,700+ funds with no transaction fees
INVEST NOW →

Conclusion

Whether you’re looking to trade stocks and other financial assets or buy and hold investments, they both do well as far as basic trading platform services go.

It is clear that Wealthsimple Trade is the platform that best suits beginner investors, while Interactive brokers Canada is far more suited for experienced traders.