Wealthsimple Review

Wealthsimple is a solid choice for passive investors in Canada, offering a streamlined approach to investing through its robo-advisor, Wealthsimple Invest, and a beginner-friendly trading platform, Wealthsimple Trade. With zero commissions for self-directed trading and an emphasis on socially responsible investing (SRI) through proprietary ETFs, Wealthsimple caters to those who want a hassle-free, automated way to grow their portfolios. For Canadians new to investing, its simplicity and accessibility are real strengths.

On the downside, Wealthsimple's minimalist design sacrifices advanced tools and research features that active traders might expect. While it excels at keeping things straightforward, its lack of interactive charts, news integration, and customizable screening tools may leave experienced investors wanting more. Wealthsimple is best suited for those focused on long-term investing rather than frequent trading or in-depth market analysis.

Top Takeaways for 2024

After testing Wealthsimple, here are my findings:

1. Wealthsimple is like the Robinhood of Canada: It offers an easy solution for less demanding investors via the ultra-basic Wealthsimple Trade web platform suite, as well as robo-advisor Wealthsimple Invest.
2. Wealthsimple’s proprietary low-cost index funds (TSX: WSRI and TSX: WSRD) aim to be even more “green” compared to the Enviromental Social Governance (ESG) rankings typically used in the industry, and complement the broker’s robo-advisor offering.
3. Educational content is of high quality but trails peers in scope and variety, and research is extremely limited, with no news headlines, analyst ratings, reports or economic calendars.

Overall summary

Commissions and fees

The commissions and fees you will pay at Wealthsimple depend on the value of your account. Clients with less than $100,000 are signed up under Core, their most basic plan, while Premium covers those with more than $100,000, and Generation requires at least $500,000.

Commissions: Self-directed trading is commission-free. If you use Wealthsimple Invest, a robo-advisor — that is, a managed account — there is a management fee, meaning an annual percentage rate of your balance is charged as a fee. The amount varies depending on the size of your account.

Retirement accounts & tax-savings: In addition to individual, joint and business accounts, Wealthsimple Canada offers five types of retirement and other tax-efficient accounts, including a registered retirement savings plan (RRSP), tax-free savings account (TFSA), registered education savings plan (RESP), registered retirement income fund (RRIF), and locked-in retirement account (LIRA).

Dive deeper: See our picks for best Canadian online brokers.

Mobile trading

Wealthsimple offers two mobile trading apps: Wealthsimple Invest, which is its robo-advisor solution for ultra-passive investors; and Wealthsimple Trade, for more hands-on, self-directed investors.

Wealthsimple Invest: This robo-advisor app from Wealthsimple lets you set up automated deposits, along with recurring investments, and even round up change to the nearest dollar on credit card purchases and invest that difference for you automatically.

The investment portfolio is managed based on predefined investment preferences tailored to your personal preferences. The only caveat is that trading costs, in the form of a management fee, range from 0.20% to 0.50% per year, depending on how much you deposit into a Wealthsimple Invest account.

Wealthsimple Trade: The Wealthsimple Trade app is very light on the surface compared to the best mobile apps available from other online stockbrokers. Still, there’s plenty to say about its modern-looking design, which is clearly created to appeal to beginners and more passive investors.

On your first Wealthsimple Trade login, you’ll be greeted with a prompt to fund your account, if you haven’t yet, before you can start exploring.

Let’s start with the basics: The Wealthsimple Trade app has a purposefully rudimentary universal watchlist. This is where you can add or remove symbols to your liking, but that’s about it; you cannot create multiple watchlists.

The lack of details available in the watchlist columns may help avoid confusing inexperienced investors with too much information, as the app is meant to keep you focused on a few key points: buying securities by searching for a specific symbol or selecting one from a predefined list.

Predefined watchlist: The flipside of having limited options to customize your watchlist is that there are curated lists to choose from. Again, the overly simple watchlist structure in Wealthsimple Trade is also what helps the broker easily deliver nearly 50 predefined lists for various sectors and theme-specific industries: for example, cannabis, “top Canadian” stocks, featured stocks of the day, or those that are most popular on the app. There are also lists such as top gainers and losers, which is a common feature I was glad to see available.

No stock screeners: A touch above the lists feature would be fully customizable stock screeners — which is simply a way for you to predefine your own criteria to scan for related symbols — and which is not available at Wealthsimple. Note: These limitations only affect you if you want to do custom screens or have multiple custom watchlists, otherwise you won’t even notice they’re missing.

Charts: When it comes to charting on Wealthsimple Trade, there are no customizations available to the default line chart, besides a few time frames. Literally, the only thing you can do on the Wealthsimple Trade charts is choose from six time-frames, including daily, weekly, one month, three month, one year, or five year time periods.

Intraday vs. long-term: By purposefully excluding time frames lower than one day (e.g., hourly, 30-minute, 10-minute charts), the Wealthsimple Trade app focuses you on longer-term time horizons; still, I was disappointed there weren’t other chart types such as a classic bar-chart or candlestick chart, which you almost always find on platforms that support active trading and market-timing strategies. Even a passive investor may want to analyze a security on a more granular time scale when investing for the long haul, so beefing up the charts would seem to benefit Wealthsimple Trade users.

Order Types: beyond a market and limit order, I was pleased to see a more complex order type available known as the Stop Limit, which can be used to set a stop price which acts as a trigger for a second Limit order, akin to a One Triggers Other (OTO) order. Such orders could be helpful in scenarios where you want to enter the market at a specific price or better, but only if another price is first reached. On the flip side, you cannot short stock or trade options at Wealthsimple.

Platforms and tools

Wealthsimple Trade is a highly simplified web-based trading platform that comes with the absolute basic elements for passive investing.

For those that don’t want to spend much time or effort when looking at their investments, Wealthsimple Trade lets you focus just on buying specific symbols, where you can set up automated buys, deposits, and rebalancing, compared to Wealthsimple Invest, which does this for you.

I found the Wealthsimple Trade platform very easy to navigate as there are few options to choose from and limited customizations, as it is optimized for less demanding traders, compared to platforms available from industry leaders.

Wealthsimple Trade web charting: Charting is nearly identical to the Wealthsimple Trade mobile app; there are no customization options, and just five timeframes to choose from.

Given the modern look and appeal of the web platform, I was perplexed at the inability to zoom in and out, without adding undue complexity for beginners. Currently, charts are a static mosaic and not interactive.

I found myself wanting to change the default line chart to another chart type out of sheer habit; but I understand that certain investors might not care if all they are looking at is longer-time price trends. Still, the lack of functionality for charts didn’t sit well with my tastes for web trading platforms.

Research

Research at Wealthsimple is limited to content created by the company staff, including across its website, magazine, podcasts, email newsletter, and YouTube channel.

Compared to industry leaders, Wealthsimple does not provide news headlines or company news from within its trading platform, limiting the amount of research you can conduct on potential investments such as when searching specific stock symbols and other securities.

The best brokers in this category offer not just a variety of research tools but even reports provided from third-party analysts, along with ratings to help you assess potential trading opportunities.

This is one category that I feel Wealthsimple can improve to cater to passive investors, as they increase in the scope of research, such as ratings and research reports - is important for long-term investing, and not just for active or advanced traders.

Investment options

U.S. and Canadian markets: Overall, Wealthsimple provides a gateway to U.S. and Canadian regional stock exchanges, giving you access to securities such as individual stocks and ETFs. Canada residents who wish to trade U.S. stocks and ETFs must upgrade their account for $10/month, or have a Premium or Generation account. However, mutual funds are not available at Wealthsimple.

That said, Wealthsimple offers two proprietary ETFs that are listed on the Toronto Stock Exchange (TSX) and that cater to Socially Responsible Investment (SRI) standards, under tickers TSX: WSRI and TSX: WSRD. The SRI account is akin to a robo-advisor solution for passive investors that want to put their investing on autopilot.

Cryptocurrency: Wealthsimple Crypto, which offers access to more than 30 popular cryptocurrencies, was recently expanded to offer full crypto wallet functionality.

Education

Wealthsimple delivers quality educational materials including articles, podcasts, videos and its own YouTube channel with organized playlists.

Overall, Wealthsimple trails the best stock brokers in this category which offer a wider variety of educational content and generally more extensive materials, for not just beginners, but also intermediate and experienced investors.

That said, I enjoyed Wealthsimple’s educational content and look forward to it expanding, such as by including more technical analysis and fundamental market data, which can benefit passive investors too.

Banking

While Wealthsimple doesn’t offer traditional banking services, it does offer a cash app that lets customers send and receive money easily and without fees. Wealthsimple also has a debit card in the works, but it has yet to launch.

Funds held in Wealthsimple Cash and Save accounts are protected by Canada Deposit Insurance Corporation (CDIC), for up to $100,000 per beneficiary, subject to certain rules. Note: Crypto assets offered by Wealthsimple Crypto are not afforded any protection.

Final thoughts

Wealthsimple states that it’s building the “most human” financial company, and I must say they have done a solid job incorporating the human element and voice across their media formats and discussing a wide variety of life topics encompassing personal finance, such as can be found in their magazine articles and podcasts (example: “How to Break Up Financially When You Break Up”).

Beyond the content, I felt there was lots missing in terms of investing content, including market analysis, research, fundamental data, and news headlines, along with an absence of many common and advanced tools found across the best trading platforms. For example, adding detailed company fundamentals, along with ratings and research reports and interactive charts, would be empowering to investors.

It’s clear that Wealthsimple is best suited to passive investors who want to set-it-and-forget-it using its robo-advisor investing solution. Conversely, if you want a self-directed account to invest passively, you will be limited to using Wealthsimple Trade and choosing from the curated lists, or searching for a symbol manually. Just beware there aren’t many analysis tools to do your own research when investing from the app.

Can I trust Wealthsimple?

Yes, Wealthsimple is trusted by over a million investors, is backed by prominent venture capital investors and is regulated in Canada. These factors coupled with its 10 years of operation make Wealthsimple a trustworthy broker for Canadian residents.

Is Wealthsimple good for beginners?

Wealthsimple is excellent for beginners. Unless you have your mind set on becoming a day trader or active investor, Wealthsimple is a solid choice for investing for the long term, either passively in a self-directed Wealthsimple Trade account or through use of its robo-advisor, Wealthsimple Invest.

Is it safe to give Wealthsimple my SIN?

Yes, in order for Wealthsimple Canada to verify your credentials when you open a live account, you must provide your Social Insurance Number (SIN) as part of the identity verification process. Wealthsimple uses state-of-the-art security, along with data encryption and two-factor authentication to help protect account information.

Is Wealthsimple like Robinhood?

Wealthsimple is very much like Robinhood in the sense that it offers both a robo-advisor managed account, Wealthsimple Invest, alongside a self-directed account, Wealthsimple Trade, a user-friendly web trading platform.

Is Wealthsimple legit?

With a valuation of $5 billion and over 2.5 million clients, Wealthsimple is considered legit; it’s properly licensed in countries where it offers services, including Canada. Being properly regulated is a crucial factor when determining the legitimacy and trustworthiness of a broker.

About Wealthsimple

Founded in 2014, Wealthsimple caters exclusively to residents of Canada. The brand is regulated as an investment dealer in all Canadian provinces and is a member of Investment Industry Regulatory Organization of Canada (IIROC). Wealthsimple manages over $50 billion in assets, and provides services to millions of customers.

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References

Canada Deposit Insurance Corporation, Financial Services Compensation Scheme, Wealthsimple's Wikipedia

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