Wealthsimple is an excellent broker choice if you are a passive investor in Canada or the U.K. and seeking an innovative robo-advisor solution for automated investing. However, due to limited research and lack of trading tools, it won’t be enough if you want to actively trade.
Top Takeaways for 2022
After testing Wealthsimple, here are our findings:
- Wealthsimple is like the Robinhood of Canada and the U.K.: It offers an easy solution for less demanding investors via the ultra-basic Wealthsimple Trade web platform suite (not available in the U.K.), as well as robo-advisor Wealthsimple Invest.
- 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.
- 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.
|Commissions & Fees|
|Platforms & Tools|
|Mobile Trading Apps|
|Offering of Investments|
|Ease of Use|
Commissions and fees
The commissions and fees you will pay at Wealthsimple depend on the type of account you open and whether you are a Canada or U.K. resident, which will determine which entity you use. Wealthsimple Trade is not available in the U.K., leaving robo-advisor Wealthsimple Invest as the only option there.
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.
U.K. residents: Besides individual accounts, Wealthsimple U.K. offers three types for retirement, including a Pension, ISA, and JISA account.
Canada residents: 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).
In early 2022, Wealthsimple added a subscription-based Plus account for residents of Canada. The $10 monthly fee nets you snap quotes (real-time pricing), the ability to hold U.S. dollars, and instant deposits up to $5,000 (compared to $1,500 for the basic account).
Wealthsimple pricing summary:
|Penny Stock Fees (OTCCB)||N/A|
|ETF Trade Fee||$0.00|
|Options (Base Fee)||$0.00|
|Options (Per Contract)||$0.00|
|Futures (Per Contract)||$0.00|
|Mutual Fund Trade Fee||$0.00|
|Broker Assisted Trade Fee||$0.00|
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 (note that Trade isn't available in the U.K.).
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 0.40% 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.
Real-time snap quotes: By default, market data is delayed on Wealthsimple Trade, but real-time data is available if you upgrade to the new Plus account, which carries a $10 monthly fee. Overall, given the app is so focused on long-term investing, I'm not sure why anyone would need real-time data, as there are practically no market-timing trading tools or intraday charts.
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 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.
Offering of investments
The range of products available at Wealthsimple will largely depend on where your account is established; whether in Canada or the U.K., as the range of account types also varies.
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 to the Plus account ($10/month). However, stock options and 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.
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.
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.
Funds held by Wealthsimple UK are protected by the Financial Services Compensation Scheme (FSCS) for up to £85,000 per eligible person in the extraordinary event of the broker’s insolvency.
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. And if you reside in the U.K., self-directed trading via Wealthsimple Trade is not an option.
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 and the U.K. These factors coupled with its nearly 17 years of operation make Wealthsimple a trustworthy broker for U.K. and 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 and the U.K. Being properly regulated is a crucial factor when determining the legitimacy and trustworthiness of a broker.
Founded in 2014, Wealthsimple caters exclusively to residents of Canada and the U.K. The brand is regulated as an investment dealer in all Canadian provinces and is a member of Investment Industry Regulatory Organization of Canada (IIROC), as well as the Financial Conduct Authority (FCA) in the U.K.
Wealthsimple holds over £3 billion in customer assets in the U.K. and $10 billion in Canada, and caters to more than 2.5 million collective customers. The brand is valued at $5 billion, following its latest investment round of $750 million from a consortium of prominent investors, including Meritech and Greylock.
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About the Author
Chris McKhann Chris McKhann has been in the industry for more than 20 years. He has worked for many of the top names in the online trading space, including TD Ameritrade and optionMONSTER, which later became part of E*TRADE. His work has been cited in the Wall Street Journal, Reuters, the Financial Times, Forbes, CNBC, Nasdaq.com and Nikkei. He has also been an advisor and outside trader for several hedge funds. He was one of the first traders to delve into the VIX tradable products and to write about them (back in 2006). Chris is also an educator who teaches high school statistics, finance and computer science.
Blain Reinkensmeyer Blain Reinkensmeyer is a Managing Partner at Reink Media Group. He heads research for all U.S.-based brokerages on StockBrokers.com and is respected by executives as the leading analyst covering the online broker industry. Blain’s insights have been featured in the New York Times, Wall Street Journal, Forbes, and the Chicago Tribune, among other media outlets, and he is noted as a top expert on the U.S. online brokerage industry.