Wealthsimple is a commission-free online brokerage in Canada. The broker is popular among investors for its zero commission when buying and selling stocks. It focuses on simplicity and accessibility, making the learning curve quicker compared to other platforms.
As one of the only two brokers offering fractional shares in Canada, Wealthsimple makes it easier to invest even with small capital because you can purchase smaller portions of a stock.
Wealthsimple makes an ideal choice for Canadian investors with simple strategies. The platforms are straightforward and the tools are uncomplicated.
Overall, the Platform has all the basic essentials every self-directed investor needs for trading. On top of that, Wealthsimple doesn’t charge monthly or annual fees, as well as commission fees, letting you save more money when you buy and sell stocks.
Key points for Canadian traders
Before diving into details, understand Wealthsimple at a glance. Here is a quick overview of the first commission-free broker in Canada, discussing the pros and cons to consider before signing up:
| Pros | Cons |
|---|---|
| ✔ Zero Commission on Stocks and ETFs | ✘ 1.5% currency conversion fee |
| ✔ Fractional shares | ✘ Limited investment options outside of Canada |
| ✔ User-friendly platform | ✘ Focus on simplicity |
| ✔ Automatic investing option | ✘ Basic plan only supports CAD account |
| ✔ High-interest savings account (4-5%) |
What is Wealthsimple?
Wealthsimple is the self-directed investing arm of Wealthsimple, a Canadian fintech company founded in 2014. The commission-free broker offers products ranging from automated investing (robo investors) to high-interest savings accounts.
The company aims to make financial services more accessible and affordable for Canadians, even citizens with zero knowledge of how the stock market works. With over 3 million clients, the company plans to expand on mortgages and targets to increase its assets (currently at $30 billion) to $100 billion in the next five years.
After the release of Wealthsimple mobile app in 2019, the Canadian-based fintech company has disrupted the industry with its easy-to-use platform. This public release made the investing experience more convenient, accessible, and cost-effective for everyone in Canada, setting new standards. Despite setbacks, the company was currently valued at $2.1 billion USD.
While their commission-free stock trading is the major selling point, Wealthsimple continues to innovate and now caters automated deposits, stock purchases, and dividend reinvestments. It also caters fractional share trading on selected investment products. The platform is known for its user-friendly design and intuitive navigation, making it suitable for new Canadian investors.
Also, Wealthsimple offers recurring deposit options, allowing investors to adopt a dollar-cost-averaging strategy for long-term investments. However, note that the basic plan lacks USD accounts, which may affect frequent U.S. trading.
What makes Wealthsimple unique?
Trading stocks/ETFs commission-free makes Wealthsimple unique compared to other online brokers available in Canada. Mobile, desktop and web-based platforms are user friendly. Wealthsimple supports fractional-share investing on selected securities and automatic investing as well.
- Commission-Free Trading
The commission-fee trading on for self-directed investing becomes a major cost-saving factor for Wealthsimple users. With fewer discount brokers offering the same level of commission-free trading, Wealthsimple drew millions of users already, especially to younger demographics.
- Ease of Use:
The ease of use is immediately noticed on Wealthsimple. Web platforms and mobile apps are straightforward yet intuitive. The simple interface makes it less intimidating for beginners and even to seasoned investors with simple strategies.
- Fractional Shares:
Fractional shares are definitely an advantage for Canadian investors who have lower capital. Some Canadian stocks have high prices per shares, but allowing to purchase fractions of those shares opens up more opportunities that aren’t an option to other brokers that don’t support fractional shares. For instance, the feature diversifies your portfolio even further.
- Automatic Investing:
Automatic investing has been a feature of Wealthsimple since the mobile app was released. Setting up automation features like recurring investments or automatic deposits encourages long-term investing in Wealthsimple.
This approach also suits Canadians focused on building wealth while saving more time and effort. Recurring deposits enable dollar-cost averaging, which reduces the impact of market volatility over time.
Is Wealthsimple a good discount broker?
Yes, Wealthsimple is a good discount broker for beginner, casual, long-term, and cost-conscious investors. Simple interface and zero fees on commission and registration attracts most types of investors. Also, Wealthsimple makes an ideal broker for long-term investment goals because of automatic deposits and a focus on ETFs for passive, buy-and-hold strategies.
However, Wealthsimple might be challenging for active traders because the platform lacks advanced order types compared to its competitor brokers. For Canadians who trade frequently, relying heavily on technical analysis, they might find the charting tools underwhelming.
There are also better brokers to trade US securities. This is true especially to Core Wealthsimple clients because of the FX conversion fee, unless you opt in for a USD account.
Wealthsimple excels as an entry point for simple investing but it may underwhelm investors with complex strategies and investors looking for specific assets that Wealthsimple doesn’t offer.
Can you trust Wealthsimple with your money?
Yes, you can trust Wealthsimple with your money. The Investment Industry Regulatory Organization of Canada (IIROC) regulates Wealthsimple operations in maintaining a safe and reliable platform for its clients.
Wealthsimple is a member of the Canadian Investor Protection Fund (CIPF) as well. CIPF provides insurance to Wealthsimple users in case the company goes bankrupt.
Member of IIROC and CIPF
Let’s breakdown why being a member of IIROC and CIPF makes Wealthsimple safe and trustworthy:
- Investment Industry Regulatory Organization of Canada (IIROC):
IIROC is a national regulatory body that oversees Canadian investment dealers. IIROC rules and regulations are often based on industry stakeholders consultations, the public, and authorized regulatory bodies. Industry standards ensure members, like Wealthsimple, operate with integrity and in compliance. - Canadian Investor Protection Fund (CIPF):
CIPF coverage protects eligible accounts up to $1 million CAD in case Wealthsimple becomes insolvent. Insurance adds extra security and peace of mind to Canadian investors.
Deposit/capital protection
Deposited funds and investments on your Wealthsimple account are protected by segregated accounts. Even when the company is losing money, your money is safe because it is held separate from the company’s operating capital. This is a standard practice within the Canadian brokerage industry, ensuring additional security for your assets.
User account security and privacy
Security and privacy on Wealthsimple accounts add data encryption and two-factor authentication (2FA) in protecting your account from breach of information, unauthorized access, and suspicious activities.
Below is a short breakdown on how these security measures keep your sensitive information and assets protected:
- Encryption:
Wealthsimple uses a 256-bit SSL/TLS certificate to shield your data. This security protocol encrypts all data exchanged between your device and our web servers. This measure safeguards your account information during transmission to our servers. Once received, our “Behind the Scenes” mechanisms ensure the secure handling of this information.
- Two-step verification:
2FA is a security measure where the system asks for a unique, time-sensitive verification code whenever you log in from a new device. This extra step helps protect your account from unauthorized access by requiring you to provide a unique code that is sent to your phone via text message, automated phone call, or an authenticator app. This ensures that only you can access your account, even if someone else has your password.
- Industry-standard practices:
Wealthsimple prioritizes security through a dedicated team and adherence to industry standards. The company employs modern cloud technology for backups, ensuring data protection despite unforeseen events.
Are there other fees on Wealthsimple?
Yes, Wealthsimple charges other fees like forex and premium monthly subscriptions. While the core offering is commission-free trading on stocks/ETFs, not all securities outside of Canada are free of commission. Let’s dive into the details below:
How much is the FX conversion fee on Wealthsimple?
The FX conversion fee on Wealthsimple costs 1.5% of the amount being converted. Since Wealthsimple holds accounts in CAD, you need to convert your CAD to USD first before buying stocks/ETFs in the U.S. You need to convert USD to CAD again, which costs another 1.5%, when you sell those stocks/ETFs.
For instance, if you buy $500 USD worth of Apple stock, you’ll pay a conversion fee of $7.50 USD (1.5% of 500). You will then pay another $7.50 USD when you sell. These FX fees can add up quickly if you frequently trade in the U.S.
Nonetheless, the 1.5% FX conversion fee is still cheaper than the industry standards (more than 2%). Also, you can waive off the FX conversion fee if you sign up for a USD account, which costs $10/month for core members.
However, if you are a cost-conscious investor who often buys and sells U.S. assets, opting for other brokers with lower FX fees might be a more economical choice. The choice between signing up for a USD account or choosing another broker still depends on your preference, strategy, and investment goals.
How much is the Wealthsimple USD account per month?
USD account costs $10/month for Core members. If you are either a Premium ($100,000+ worth of assets) or Generation ($500,000+ worth of assets) member, USD accounts are free.
USD accounts are advantageous for Canadians who buy and sell stocks from the U.S. because you can avoid the 1.5% FX conversion fee.
How much is the Withdrawal fee in Wealthsimple?
Wealthsimple does not charge standard withdrawal fees, but it takes 1-3 business days. For instant withdrawals, there is a 2.5% fee.
Does Wealthsimple charge other fees?
Yes, Wealthsimple charges 0.2-0.5% management fee on managed investing accounts. There is also an options contract fee of $0.75-$2.00 per contract. However, Wealthsimple doesn’t charge for inactivity fees, added ATM fees, and monthly/yearly account fees.
What assets can you trade with Wealthsimple?
The available assets you can access on Wealthsimple includes over 9,000 stocks and ETFs from Canada and some U.S securities. The platform lets you trade cryptocurrencies and options as well.
- Stocks and ETFs:
You can trade stocks and ETFs on Wealthsimple on major stock exchanges in North America like Toronto Stock Exchange (TSX), TSX Venture Exchange (TSXV), Canadian Securities Exchange (CSE), New York Stock Exchange (NYSE), and NASDAQ.
Among the hottest stocks in Wealthsimple are Constellation Software Inc (CSU) and TMX Group Ltd. (X) on TSX, and Apple Inc. (AAPL) on NASDAQ.
ETFs like XEQT, XIC, XUU, and international ETFs like VIU and XEF that are available are recommended for diversifying your portfolio.
- Options:
Options trading is also provided in Wealthsimple for experienced investors. Eligible clients must have a minimum of $25,000 CAD. Contract fee cost $2 USD per contract on Core members. Meanwhile Premium and Generation clients are charged for $0.75 USD fee per contract.
- Cryptocurrency:
Cryptocurrency is available in Wealthsimple. While the platform offers popular cryptocurrencies like Bitcoin and Ethereum, it doesn’t have the same range of options as dedicated crypto exchanges.
The good thing is, the platform lets you store your crypto holdings on your account. Without a separate crypto wallet, trading and managing your crypto is easier. Plus it does have crypto ETFs like Purpose Bitcoin ETF (BTCC) and Evolve Ether ETF (ETHR).
What are the trading platforms in Wealthsimple?
Wealthsimple provides mobile and desktop platforms. Started as a mobile app, Wealthsimple expands to web, both featuring a simple, user-friendly interface. Additionally, the company is developing a desktop version that is currently available as a beta. As of now, the mobile app is still the best Wealthsimple platform to use.
What are the key features of Wealthsimple platforms?
The Wealthsimple on mobile and web platforms are known for clean design, intuitive interface, and easy navigation.
Below is an overview of its desktop platform in beta version, as well as what the mobile platform looks like:
- Clean design: The interface is uncluttered yet intuitive. It is minimalistic and easy on the eyes, making new investors less intimidated when exploring the platform for the first time.
- Easy Navigation: Finding stocks, placing trades, and accessing account information is straightforward.
- Mobile App: The mobile app is well designed and optimized for best user experience. The platform allows for simple trading and account management on the go.
What are the limitations of Wealthsimple platforms?
Wealthsimple platform, however simple and clean, has limited charting capabilities and it lacks customization unlike other complex brokerage firms. For traders looking for in-depth technical analysis tools might find Wealthsimple rudimentary.
The platform doesn’t have many customization options as well. Leaning too much on a minimalistic approach can be a drawback for experienced traders who are capable of personalizing their account profile for a more seamless trading execution and analysis.
What account types are available on Wealthsimple?
The available account types you can sign up for on Wealthsimple includes popular registered accounts in Canada, cash accounts, crypto, and even less common account types like spousal RESP.
Let’s break down the available option:
Popular registered accounts
- Registered Retirement Savings Plan (RRSP): Wealthsimple offers the same tax advantages as RRSPs on other brokers (tax deferred growth and potential tax-deductible contributions (up to 18% of your previous yearly income).
Available as a managed or self-directed account.
- Tax-free Savings Account (TFSA): a widely used Canadian account because of its growth potential, allowing you to withdraw funds without paying taxes. Wealthsimple makes it easy to maximize your TFSA contributions.
Available as a managed or self-directed account.
Taxable accounts
- Non-registered accounts: the standard investment account suitable for various goals. While it lacks the tax benefits of registered Canadian accounts, it offers more flexibility in terms of withdrawals. Non-registered accounts don’t restrict your desired contributions.
Available as a managed or self-directed account.
- Cash account: offers a combination of chequing and savings account. The account allows your money to grow up to 4% interest and/or 1% cashback. It doesn’t charge monthly account and transaction fees. Cash accounts don’t have a minimum balance to maintain as well.
Standalone account. Available as a savings account (lets you earn rewards and interests), but not applicable as a managed or self-directed account.
Other account types
- First Home Savings Account (FHSA): Canadian residents looking to save money for their first home can benefit from this account type. FHSA on Wealthsimple allows you to save up to $40,000 where you keep your gains free from taxes. You can contribute up to $8,000 every year while reducing your yearly income tax.
Registered account. Available as a managed or self-directed account.
- Spousal RRSP: a retirement savings plan for partners. the funds grow tax-deferred until withdrawal. This can be beneficial in optimizing tax benefits for some couples, especially if one partner pays relatively higher taxes than the other.
Registered account. Available as a managed account but not as a self-directed account.
- Registered Education Savings Plan (RESP): refers to a plan designed to help save for a child’s education in the future. Wealthsimple lets you save up to $50,000 education savings with RESP. You can claim government grants, and the investment growth is tax-free if not withdrawn.
Registered account. Available as a managed account but not as a self-directed account.
- Corporate accounts: Corporate Accounts are designed for businesses with cash reserves, allowing entrepreneurs to invest and potentially increase their funds.
Non-registered account. Available as a managed account but not applicable as a self-directed account.
- Locked-in Retirement Account (LIRA): is a smart investment account that optimizes pension savings with specific rules for locking in retirement funds.
Registered account. Available as a managed or self-directed account.
- Registered Retirement Income Fund (RRIF): converts funds from RRSP at age 71, providing a steady income during retirement.
Registered account. Available as a managed or self-directed account.
- Crypto: allows Canadians to trade cryptocurrency securely. Trading crypto in the same platform where you trade stocks benefits users of free savings, allowing them to maximize and seamlessly manage their portfolio growth.
Non-registered account. Not available as a managed account but available as a self-directed account.
What is Wealthsimple’s “Spend & Save”?
Spend & Save is a savings account in Wealthsimple. This savings account serves as a hybrid solution for Canadians looking to earn a high interest rate on their everyday funds while enjoying convenient spending and more investment rewards.
Here are a few key points of Spend & Save:
- Interest Earnings: benefits on Wealthsimple’s Spend & Save can be better than your traditional bank accounts. You can boost your earnings from interest if you meet and maintain a certain balance on your account.
- Cashback and other perks: 1% cashbacks on all purchases with Wealthsimple Cash Card. The eligible purchases for cashbacks are stocks, crypto, or cash. Other perks are auto-investing and faster access to paychecks, with up to $500,000 CDIC coverage on eligible deposits.
- Zero-fee: no monthly fees, no overdraft penalties, no minimum balance required
- Global Reach: cash cards can be used worldwide without foreign transaction fees. Direct deposits to your paycheck.
What is the interest rate for Spend & Save?
The interest rate for Spend and Save accounts on Wealthsimple is 0.5-5% for direct depositing paychecks or other income sources. The interest is an annualized rate, calculated daily and paid out monthly. The rate follows the Bank of Canada’s rate, so if it rises, the account’s rate rises too. This high interest rate offer is not promotional and has no set end date.
How to open a Wealthsimple account?
To open a Wealthsimple account, you need to prove your Canadian citizenship and meet the minimum age required by your province. Ensure you have all the necessary requirements like your SIN, residential address in Canada, and other personal details.
Below is a step-by-step guide on how to set up an account on Wealthsimple.
- Visit the official website or download the mobile app (available on iOS and Android)
- Start the signup process. You can click either the “Get Started” or “Log in” button on the top right corner.
- Provide your personal information. You’ll be asked for standard details including your full name, date of birth, address, contact number, email, employment information, and Social Insurance Number (SIN).
- Choose an account type to open on Wealthsimple.
- Verify your identity to follow regulations. This involves uploading a photo of a government-issued ID and answering additional questions.
- Start funding your account.
How to fund and withdraw your assets on Wealthsimple?
Wealthsimple allows you to fund and withdraw your assets in multiple ways. In funding your account, the platform supports INTERAC e-transfer, bank account linking, Wire transfer, via Visa/Mastercard, and transfer from your Wealthsimple Cash.
Let’s breakdown the methods on funding and withdrawing funds on your Wealthsimple account:
How to make a deposit on Wealthsimple?
To make a deposit on Wealthsimple, you can follow this simplified step-by-step guide:
- Sign in to the Wealthsimple app on your mobile device.
- Tap the “Move” tab at the bottom of the screen (top menu bar on the web).
- Choose “Deposit”.
- Select “Add funds” (on the mobile app) or “Add Money” (Web).
- When you’re on the web, choose whether it’s for a “self-directed or managed account”.
- Choose an account to deposit to and tap “Next”.
- Choose a linked bank account or your Cash account and tap “Next” (on the web, you can do this by clicking the “From” field.
- Enter an amount to deposit into your account and tap “Next” (mobile) or “Continue” (web).
- Review the details and tap “Submit deposit” (mobile) or “Confirm” (web).
Deposit limits vary depending on the account type. For example, the limit per transaction and daily limit on self-directed stock investing accounts is $250,000 CAD.
Instant deposits are available for certain amounts and can be accessed immediately. For core clients instant deposits are available up to $50,000 and up to $250,000 for Premium and Generation members. Meanwhile standard deposits take 3-5 business days.
You can also set an auto-deposit using your default method (weekly, bi-weekly, or monthly). Funds using auto-deposit can take up to 3 business days.
What are the transfer methods available on Wealthsimple?
You can add money on your Wealthsimple account using the following methods:
INTERAC e-transfer: a quick method for Canadian investors. Funds are often available for funding immediately. Wealthsimple lets you deposit funds of up to $3,000 per transaction instantly. There are a maximum of 5 transactions within a 24 hour timeframe.
Linking your bank account: for instant, seamless deposits by linking your bank accounts. You can then set linked savings or chequing accounts as default funding and withdrawal methods.
Visa/Mastercard debit: let’s you deposit up to $3,500 immediately. Every month, you are only allowed to deposit $35,000 using your linked Visa/Mastercard.
Wire Transfer: ideal for larger deposits or sending funds internationally.
How to withdraw funds on Wealthsimple?
You can withdraw funds on Wealthsimple via supported transfer methods linked to your account (e.g. Visa/Mastercard debit, bank accounts).
Follow these steps to withdraw on the mobile app and on the web:
- Log in to your Wealthsimple account on the web or mobile app.
- Click the “Move” tab at the bottom of the screen (mobile) or on the top menu (web).
- Select “Withdraw”
- Choose the account you want to withdraw.
- Choose the account where you want to send the funds to.
- Input the amount you want to withdraw.
- Select “Submit Withdrawal” (mobile) or “Set Withdrawal” (Web)
How to withdraw funds on USD accounts?
To withdraw funds from a USD account, you have two options:
- Convert the cash to CAD and withdraw it to a connected bank account.
- Withdraw funds from a self-directed investing account to a linked U.S. dollar bank account.
When selling USD assets and converting the cash into CAD, there may be a settlement period of 4 business days to mitigate fraud or delinquent accounts. Conversions made after this initial process typically face a shorter settlement period of 2 business days.
How long does it take to make a withdrawal?
The withdrawal time varies depending on the account type. Managed accounts take up to 7 business days. Stocks, crypto, and cash accounts take around 1-3 business days. However, keep in mind that crypto and stock investing account withdrawals sometimes take up to 5 business days.
