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Rbc Investease vs Wealthsimple: Which Broker Is Better for Trading and Investing?

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Introduction

Rbc investease and Wealthsimple are two of the leading robo-advisors in Canada. They provide low-cost automated investing services on their platforms and are very popular due to their low costs.

In this Rbc investease 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 robo-advisor 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.

Royal Bank Of Canada(RBC)

The Royal Bank of Canada is one of only two banks that operates a robo-advisor service in Canada. The other one is the Bank of Montreal.

Rbc Investease was launched in 2018 as a subsidiary of the Royal Bank of Canada when they partnered with Blackrock’s Ishares.

The outcome of this partnership was Rbc Investease, which became the largest and most comprehensive EFT offering in Canada.

Rbc investease portfolios are all in Canadian ETFs and are sourced exclusively from Blackrock’s ishares.

A major contributor to its success was the reputation and trust built up by its parent company, Royal Bank of Canada, over its 150 years of operation in Canada.

They currently have $60 billion in assets under management.

  • 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
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RBC InvestEase

Wealthsimple Inc

Wealthsimple Inc was founded by Michael Katchen in 2014 and is currently based in Toronto, Canada.

It’s a financial services company intended to be a one-stop shop for investors. They provide various products, including Wealthsimple invest, Wealthsimple cash, Wealthsimple trade, and Wealthsimple tax.

Wealthsimple’s flagship product was Wealthsimple invest, and was one of the first robo-advisors in Canada.

Wealthsimple is also the first brokerage firm in Canada to offer commission-free ETFs and stocks.

Wealthsimple currently has $15 billion worth of assets under management and has experienced a 14% year-on-year growth increase over the last few years.

Wealthsimple-Inc

 

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How They Work

investment accounts

To open an account with Rbc investease requires a $100 minimum investment.

Rbc investease only offers TFSA, RRSP, and unregistered personal accounts, but there are plans to increase their account offerings shortly.

Wealthsimple, on the other hand, offers personal accounts, tax-free savings accounts, RESPs, RRIFs, LIRA, RRSPs, and corporate accounts(joint and business investment accounts).

Wealthsimple doesn’t have a minimum investment required to open an account.

Portfolios

When you sign up for Rbc investease, you fill in a questionnaire that allows them to assess your income, investment goals, and risk tolerance. This allows them to select the most suitable investment plan for their clients.

Rbc investease offers 5 different investment portfolios to their investors. They are very conservative, conservative, balanced, growth, and aggressive growth.

Despite being a robo advisor, Rbc Investease incorporates a team of accredited portfolio advisors alongside technology to help their investors.

Rbc investease portfolio advisors are there to invest on your behalf, rebalance your investment portfolio on your behalf and offer feedback on any questions you may have on your investment.

Portfolio management fees are charged as a percentage of the value of the account under management.

Wealthsimple does a very similar thing, only that they have fewer categories of investment plans for their clients. After they assess your income, investment goals, and risk tolerance, they then allocate you an investment plan.

The Wealthsimple invest investment portfolio tends to comprise low management fee ETFs and is divided into 3 main categories Conservative(low risk), Balanced(medium risk), or Growth(high risk).

Wealthsimple invest is primarily focused on low-cost ETFs, which tend to be more attractive investments than mutual funds due to their lower fees.

 

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Fees

Rbc investease

Every Rbc investease account has a 0.50% flat rate.

Rbc investease charges $135 to transfer your account to another financial institution.

The management expense ratios on Rbc investease’s ETFs are around 0.2%.

The management expense ratios on Wealthsimple’s socially responsible investing portfolios are around 0.25 -0.4%.

Wealthsimple

Whereas Rbc Investease has a flat rate on all their accounts. Wealthsimple trade goes for a tiered approach to charging accounts.

Wealthsimple Basic: $0 – $100k range whose management fee is 0.5% of the account value.

This includes the fees for setting up the portfolio, portfolio rebalancing, automatic dividend reinvestment, and unlimited customer service.

Wealthsimple Black: $100k plus range whose management fee is 0.4% of the account value. This comes with a financial planning session and a tax loss harvesting assistance bonus.

Wealthsimple Generation: $500k plus range whose management fee is 0.4% of the account value. This tier comes with a personalized custom financial report, tax loss harvesting assistance, 50% off on a Medcan health plan, and tax savings optimization.

The management expense ratios on Wealthsimple’s ETFs are around 0.2%.

The management expense ratios on Wealthsimple’s socially responsible investment options are around 0.25 -0.4%.

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

Platforms: Website and Mobile App

Wealthsimple’s invest app is a Clear, intuitive, interactive, and easy-to-navigate application that allows you to make trades, monitor your portfolio, and communicate with the wealthsimple team.

Rbc investease is yet to develop its own Rbc mobile app. You can use the Rbc banking app instead to make transfers from your Rbc bank account.

Regulation

Both RBC direct investing inc, which is the custodial broker of Rbc investease, 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).

Security

Both platforms take the security of their client’s accounts very seriously and take measures to enforce the same such as:

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

Rbc investease offers a 100% reimbursement to account holders in the event of an unauthorized transaction from a data breach.

Conclusions

Rbc Investease and Wealthsimple offer pretty much the same product but in very different packaging. Though different in structure, operations, and financial history, they both strive for quality service in the online brokerage business.

Whether you choose to invest with Rbc Investease, based on its robust institutions and credibility built over years of operations, or decide to go with the newer, more modern Wealthsimple Inc.

It’s really difficult to go wrong with either choice of financial institution.

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