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Questrade and Wealthsimple count themselves among the best online trading platforms in Canada. Low fees are the major cause of their popularity among the self-directed investing crowd.
In this Questrade vs. Wealthsimple 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 their investor’s portfolios and accounts on their platforms.
After this review, the individual Canadian investor will have adequate information on which platform suits them best.
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.
We must start at the beginning to understand how these two companies work.
Questrade was founded in 1999 by Edward Kholodenko and is based in Toronto, Canada.
The company was founded near the peak of the dot com boom and the dawn of online investing in Canada and the rest of the world.
Questrade was the first brokerage firm in Canada to offer low-cost trading commissions.
They intended to provide, and still do, a low-cost alternative to the large brokerages and large banks to Canadian investors.
Today, Questrade has $30 billion worth of assets under management, and with over 150,000+ daily signups on its platform, it is considered the fastest-growing online brokerage platform in Canada.
They have also won the “Canada Best Managed Company” award ten times.
Wealthsimple Inc was founded by Michael Katchen in Canada in 2014 and is currently based in Toronto, Canada. Their online trading platform Wealthsimple Trade was created in 2019.
It is a financial company intended to be a one-stop shop for investors. They provide various products, including Wealthsimple investment, Wealthsimple cash, Wealthsimple trade, and Wealthsimple tax.
Wealthsimple, a pioneer in its own right, was the first brokerage firm in Canada to offer commission-free ETFs and stocks.
The platform was modeled after the American financial services company Robinhood and quickly became popular due to its ease of use and user-friendliness.
Wealthsimple currently has assets worth $15 billion under management and has experienced a 14% year-on-year growth increase over the last year.
As per our latest survey, Interactive Brokers is a top-rated online brokerage firm that offers investors a powerful platform with advanced trading technology, low commission rates and global market access. Its reputation for reliability, security and a wide range of financial products make it an excellent choice for professional and active traders looking to take control of their investments and maximize their potential.
- 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
1.Their Range of Offerings
Wealthsimple trade offers mainly non-registered accounts such as TFSA, RRSP, personal investment accounts, and unregistered accounts RRSP, Spousal, LIRA, RRIF, LIF, and RESP.
Questrade offers TFSA, RRSP, and personal non-registered accounts but also registered accounts such as RESPS, RRIF, LIF, LIRA, margin accounts, and even corporate investment accounts.
Wealthsimple offers Exchange-traded funds, Stocks, and Cryptocurrency trading to its investors. They are focusing their operations on North American Markets, namely the NASDAQ, NYSE, and TSX.
Wealthsimple also became one of the first to offer fractional share ownership and trading of companies to investors.
It’s also important to note that Cryptocurrency in Wealthsimple can only be held and traded in non-registered accounts.
Investment portfolio management services are also available on Wealthsimple through Wealthsimple invest. Wealthsimple invest offers clients tailor-made investment plans and charges portfolio management fees.
Questrade offers a wider range of investment products, including Stocks, ETFs, Bonds, Mutual funds, GICs, Initial Public Offerings, and Precious metals.
Investment portfolio management services are also available on Questrade through Questrade portfolios.
Questrade, as of yet, does not offer fractional share ownership and trading.
2.Commissions and Fees
Wealthsimple trade’s rapid success and popularity came from the fact that they were the first to offer commission-free ETFs and stock trading. Wealthsimple also doesn’t have a minimum account balance requirement on their Wealthsimple trade account.
This made the barrier to entry low and accessible to as many investors as they could attract.
Wealthsimple does charge a currency conversion fee. 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% of AUM for their portfolio management services on Wealthsimple Invest.
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
Questrade requires $1,000 to open a trading account so that you can start investing.
Unlike Wealthsimple trade, Questrade only offers commission-free trading for ETFs only. But they are popular for their low trading fees on stocks and other securities compared to their competitors.
Their fees include the following:
ETF purchases at $0, but Trades range from $4.95 – $9.95.
Stock purchases and trades are charged $4.95 – $9.95.
International equities are charged at 1% of the trade value with a $195 minimum.
Precious metals are charged $19.95 a trade.
Mutual funds are charged $9.95 a trade.
Options are charged at $9.95 with a $1 per contract.
A $19.95 – $89.95 monthly subscription to access real-time streaming data on the Questrade app.
A management fee of 0.20% – 0.25% of AUM as their portfolio management services on Questwealth.
The Wealthsimple trade platform offers essential trading and research tools and comes in the 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.
Questrade is available as a Web-based application (IQ Web), Desktop Application (IQ Edge), and Mobile application (Questmobile). Questrade’s web platform is far more positively rated than its mobile app.
The Questrade app also has a feature that allows for automatic reinvestment of dividend payouts called the Dividend Reinvestment Plan. It also lets you automate deposits and Stock and ETF purchases through the Passiv app.
Questrade offers free real-time market data, unlike Wealthsimple, which has a 15-minute delay on real-time market data such as price and quotes unless subscribed to Wealthsimple trade plus.
Both Questrade and Wealthsimple are members of the Canadian Investor Protection Fund (CIPF). This means investments are protected against broker insolvency up to $1 million and are regulated by the IIROC (Investment Industry Regulatory Organization of Canada).
Questrade goes an extra step by offering $10 million in private insurance.
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.
Questrade offers new sign-ups $50 in free trades on new accounts(Note: with a minimum of $1,000)
Wealthsimple, on the other hand, offers a $25 cash bonus for your first $150 deposited.
Both Wealthsimple trade and Questrade do not charge inactivity fees.
Wealthsimple and Questrade charge a 1.5% currency conversion fee on USD/CAD conversions. But Questrade allows you to trade U.S stocks and ETFs without converting from USD to CAD.
Both companies offer Robo advisor services. Plans are usually tailor-made to suit the investor’s risk tolerance and investment goals while charging management fees.
Both companies have gradually been gravitating to socially responsible investing strategies. This is to keep up with the changing social responsibilities expected of businesses in North America and most of the developed world.
Online investing is a mainstay of the current financial world and as far as self-directed trading accounts go. It’s difficult to go wrong with either Questrade or Wealthsimple.