First off, this is an account of my personal journey with Wealthsimple and Wealthsimple Trade. I am in no means offering financial advice here. 🙂
Released in March 2019, Wealthsimple Trade boasts being the first Canadian, $0-commission, mobile stock-trading app to hit the market.
That’s right, without paying any commissions for trading, Wealthsimple Trade offers users access to a variety of Canadian and U.S. stocks and ETFs right through your phone.
This accessibility is a cornerstone of a company that has prized itself in making investing of all varieties more accessible.
Personally, the barrier to entry to any kind of investing was daunting.
That was until I heard about Wealthsimple and all of its offerings.
After initially learning about the company’s automated long term investing product and enjoying the experience, I wanted to jump into investing in individual stocks and was glad that Wealthsimple was offering me just the product to do so.
As someone who has been using the Wealthsimple Invest product for the past year, I wanted to begin to invest in stocks and ETFs on my own.
I find it fascinating!
I started researching and first came across Robinhood, but unfortunately they’re not available in Canada.
The other platform I continuously came across was Wealthsimple Trade, also offering zero commission trades.
I signed up and started playing around with the app.
I found it to have a streamlined interface allowing me to monitor stocks that I was interested in through thousands of options and then decide if I wanted to buy.
I was able to track and organize stocks/ETFs based on their performance.
The app provided me with options on how to purchase.
I could choose whether to purchase a stock once the price had reached my ‘limit’ per stock or to choose the number of shares to buy.
Not only that, I could add funds as easily as with my Wealthsimple Invest portfolio.
Here is an app that provides the ‘training wheels’ for rookie investors like myself to learn the ropes of trading stocks/ETFs, and to see if this is really for me.
However, I can see that this app does have limits.
Although there is information provided about the individual stocks/ETFs, it is limited, meaning I need to gather information from a second platform at the same time.
Markets and stock prices fluctuate in the blink of an eye so the more information I have available, the better decisions I believe I can make.
Unfortunately, Wealthsimple Trade does not offer in-depth analytics or news updates.
Unlike the Wealthsimple Invest platform, the Trade product does not have a desktop platform to compliment its mobile one.
This was really important to me.
In fact, even though I could monitor my investments on my phone, I was much more comfortable using the desktop platform to actually initiate funds and to adjust my portfolio.
I think myself and many others could benefit from having a desktop platform available.
Entering the Wealthsimple Ecosystem
Wealthsimple has come a long way from simply being a robo advisor for long-term, automated investing.
Its flagship product, Wealthsimple Invest appealed to me, the first time investor, and I have stuck with it since.
In fact, I’m glad that the company has branched out to offer individual stock/ETF trading to further service the many financial interests its users / investors may want to explore.
And the platform has not stopped there.
If Wealthsimple Trade is the first financial product that you are considering, you also have a much larger variety of products to explore using the company’s robo advisor platform.
Recent products such as Wealthsimple Cash which is like a savings account that you can withdraw from for Wealthsimple, as well as Simple Tax, for tax filing, have made this organization into a real competitor against traditional banks.
Overall, Wealthsimple offers a platform individual stock investing, longer-term robo-investments, a hybrid savings/chequing account, a Visa debit card coming soon and it’s even offering tools to help with tax prep.
The full toolkit Wealthsimple currently offers:
- Wealthsimple Invest
- Wealthsimple Trade
- Wealthsimple Cash
- Visa debit card (Coming Soon!)
- Simple Tax
Although they do not consider themselves a bank, Wealthsimple is branching out into providing more and more financial services to its users.
And although it does have its gripes with not having a completely integrated portfolio with one account for its users to access all products, things look like they will eventually change.
When I first started using Wealthsimple Invest, it was the only product on the market by this up-and-coming robo advisor.
Now, it is creating its own ecosystem and we can expect more and better offerings by the service as Wealthsimple will likely try to further gain market share.
Signing up for Wealthsimple Trade
The Wealthsimple Trade sign-up process is very simple.
Just like the original Wealthsimple Invest app, Trade requires two factor authentication, a password and a security code sent to your phone via text message, each time you sign in.
The Trade app provides the same security for its users.
Not only that, Wealthsimple Trade is also backed by the 256-bit encryption key that the robo advisor app uses as a gold standard for protection.
Depositing is a simple process where you connect a bank account and transfer funds.
In my case it was my checking account from my brick-and-mortar bank.
Once I completed the deposit process, Wealthsimple Trade requires a three business day settling time, before the funds are available.
To note, all funds in your account are grouped together.
This includes dividends made on previous trades and deposits as well as money not already committed to a transaction.
Therefore, initially your deposit will be in the “currently not available” field and will be moved to the “available to trade” section once the settling period has transpired.
Executing a Trade
The most crucial aspect of the app, actually trading, is very simple.
Once you’ve decided which company’s shares, what quantity and what means to purchase (market buy, limit buy, specific limit buy) you click buy and your new purchase is locked in at the market rate shown.
Of course, there is a two day settling period until the transaction is fully completed.
Now, there is a disclaimer that the pricing has a 15-minute delay.
This is a rolling 15-minute delay, so every minute the data is updated to that of what it was 15 minutes prior.
Which means when you ‘market buy’ you’re not exactly ‘market-buying’.
When you ‘market buy’, there is up to a 15 minute delay on the price you are currently seeing for the security.
However, the price you are paying for the security is the actual real-time price (which you don’t see).
To protect from any large changes, Wealthsimple adds a 5% collar to all ‘market buy’ orders.
Meaning, if the price of the security you saw in the Wealthsimple Trade app is up by more than 5%, the order will not execute.
Price of security in Wealthsimple app is $50
Price of security in real-time has jumped to $53
Since the increase is greater than 5%, this market buy order will not execute.
While Wealthsimple has an obligation to execute your trades at the best prices possible, the 5% collar is a means to solve drastic price changes that are unforeseen to users due to the delay in the data feed.
Fees and Minimums
No trading fee, no annual fee, and no minimums.
Wealthsimple makes it easy for someone like myself, who is new to individual investments, get into the market.
However, to note, many of the stocks I was thinking of purchasing were on US markets and therefore denominated in USD.
Unfortunately, Wealthsimple does not offer a USD account to hold your funds, so you will need to convert to and from USD each time you buy and sell USD securities, for which Wealthsimple charges a 1.5% fee.
The fee is not out of the normal for financial institutions, however we’ll discuss the USD concept more later on.
Wealthsimple Trade vs Others
As someone who has already used Wealthsimple Invest, using the same platform for individual stock trading is something that I’ve always wanted to look into.
Colleagues I’ve discussed with have critiqued Wealthsimple Trade, mainly for not having the option of a full desktop app as well as the fact that trades get executed at a price different from what you see on screen, requiring them to toggle between another platform to see the live price if they so please.
But I wouldn’t count Wealthsimple Trade out on these reasons by any means – the platform will continue to evolve and grow.
And while Wealthsimple Trade currently has no competition in the Canadian market at the moment, I’m sure it won’t be long before other platforms like the ever so popular Robinhood make it north of the border.
Interface and Usability
Wealthsimple Trade provides a pretty good charting feature so you can see the fluctuation in price of a certain stock over various periods of time, from the day or week, to several months and years.
This allows you to get a good holistic sense of the price and a glimpse of the behaviour of the particular stock that you’re looking at.
The platform also organizes stocks by category, by recent performance, as well as those that are poor-performing, giving me a simple way to navigate through the thousands of stocks available.
Also, when it comes to purchasing from a particular company or ETF, the user has the option to choose how they want to purchase.
As prices for stocks continuously fluctuate, the options to choose between market buying, stop limit buying, and limit buying give you some choice in an effort to help you get the shares at the price you wish.
Wealthsimple Trade product offers the same high security, 256-bit, encryption key that is used to secure your investments on its other products.
It’s great to know that you can use your mobile phone to access your financial assets.
It also makes me feel a bit skeptical.
Luckily, Wealthsimple takes security seriously and has used this extensive encryption key to protect from malicious harm.
Couple that with the two factor authentication system that text messages a verification code to you, along with the option for biometric login and you should be pretty comfortable.
Lack of USD Account
As eluded to above, although Wealthsimple Trade gives you access to both US and Canadian stocks/ETFs, it lacks a USD based account to hold funds.
So while other discount brokerages and the banks will allow you to have a CAD account and USD account, Wealthsimple Trade only has a USD account.
So regardless of institution, you’ll pay a currency conversion fee, however with Wealthsimple Trade you are forced to convert the USD to CAD when you sell your investments.
If you sold shares today and wanted to buy US listed shares after a few days, you would again need to convert CAD to USD to buy them.
So each time you;re getting hit with the 1.5% conversion fee, plus you’re converting currency at whatever the market rate may be, which may not be ideal for your situation.
At a brokerage that offers both a CAD and USD account, you could sell your USD investments and hold the USD in a USD account, which you could use later on to buy USD investments again.
The conversion from CAD to USD and USD to CAD only needs to happen once, whenever you’re comfortable doing so.
- For the beginner, Wealthsimple’s provides a simple and intuitive platform that’s easy to navigate, allowing you to get started on your investing journey.
- For those who are also members of the Wealthsimple Invest platform, the Wealthsimple Trade product is good way to take some control into your own hands.
- No fees and no minimums: Knowing that each investment transaction isn’t being charged a $9.99 per trade fee is a sigh of relief.
- Security: A password, texted login code, and if you chose, a biometric marker (fingerprint) to access your profile.
- Once you get going, you can also place the dividends from your investments into a registered account such as an RRSP or TFSA for tax-breaks.
- Mobile app only (and I’m a desktop type of guy)
- No unified single sign on account / profile where users can see all of their Wealthsimple products in one glance (I also use Wealthsimple Invest)
- No USD currency accounts, so if you’re not buying and holding for the long term, this may pose a challenge for you
- 15 minute delay on stock prices may be a no-go for some. I’m alright with it, as I know their 5% collar will stop things from getting out of hand and I think I would always try to use limit buy anyways.
Wealthsimple Trade is AN option for a certain type of investor.
This investor is new to the market, like myself.
They are just getting started investing on their own.
They are not yet willing to pay transaction fees that come with a more in-depth analysis of stocks and greater related information. (A lot of that information probably means nothing to a lot of beginners like myself).
The lack of USD account is unfortunate but that’s okay because as a beginner starting in CAD currency and on the CAD marketing for now is a good place to learn the ropes.