Last Updated on August 19, 2024 by Ben
Wealthsimple Logo
Wealthsimple Logo provides low-cost investment management services to clients in Canada, the United States, and the UK. Wealthsimple offers tax-efficient portfolios of exchange-traded funds or ETFs managed by Wealthsimple’s research team of investment professionals.
What is Wealthsimple?
It is an investment service for young people. They were founded in September 2014 by Michael Katchen and are based in Toronto. So far, they manage over $8 billion of assets. It is mainly owned by Power Corporation through its investments in other companies. They own it at 70.1%. Wealthsimple is a company that provides investment and savings programs for clients in Canada, the U.K., and the United States. Wealthsimple was started in September 2014.
When you are a new client, you can transfer your tax-free and retirement accounts or deposit funds into new accounts. You need to have $0 in order for this to happen. There are many different types of ETFs and mutual funds. The easiest way to make a portfolio is to choose one type: low-fee ETFs or mutual funds. You can then customize your portfolio by adding information about your age, gender, etc. This review is written from the perspective of investors in the United States.
How Does Wealthsimple Work?
They offer five financial products (there’ll be more soon, so watch this space) to help Canadians grown and manage their money:
Wealthsimple Invest
Wealthsimple Invest helps you build a portfolio with different types of investments. It is really good because it doesn’t cost much and it is easy to use. You can get advice from people too if you need it.
The way it works is: you tell us a bit about yourself and how much money you have. They will then build a portfolio that is tailored to what type of person you are. Their portfolio is different from other people’s. They don’t pick stocks. Instead, the portfolio will follow the market because research says it is more expensive and less effective to pick stocks (like what a mutual fund does). When Canadians retire, they could end up paying about $300,000* in fees throughout their life if they choose active investing.
Wealthsimple Trade
Wealthsimple Trade is a company that lets you buy and sell stocks for free. This means that you won’t have to pay any extra fees. You can acquire and sell as many stocks as you want without paying anything more than the original price of the stock.
You can use Wealthsimple Invest to build your own portfolio that will invest in various different types of ETFs like the ones they make. And with CIPF protection, you do not need to worry about losing all of your money.
Wealthsimple Crypto
Wealthsimple Crypto is Canada’s first regulated cryptocurrency platform. Wealthsimple lets you buy and sell cryptocurrencies like Bitcoin and Ethereum while making sure that your money is safe.
Wealthsimple Tax
Wealthsimple Tax is online pay-what-you-want tax software. You can do your taxes quickly, simply, and cheaply. It guarantees that you will get the maximum refund you are owed.
Wealthsimple Cash
Wealthsimple Cash is an app that lets you send, request, and receive money instantly. You can do this with the press of a button.
Wealthsimple Account Features and Benefits
If you have a premium account, you can put up to $1,000 into your bank account as often as every three days. You can utilize it all at once or over those three days.
For example, you may choose to deposit $1,000 all at once or maybe put in $500 the first day and then another $500 the next day. If you need to use $1,000 from your bank account, it will take three days for the money to be ready again.
You can’t take the bill out of your account if you go over your limit. Or if you make a deposit that is more than $1,000. You need to stand by until it settles before you can use those funds. Deposits to Wealthsimple Trade take three days to process. Deposits to Wealthsimple Crypto take five days.
Benefits and pricing:
- Dividend reinvestment
- Auto-rebalancing.
- Auto-deposits.
- Personalized portfolio.
- Expert financial advice.
- Pay 0.5% management fee.
Pros & Cons
Pros
- Tax-loss harvesting.
- Free portfolio analysis.
- $0 to open an account.
- Socially responsible investment options.
- No account minimum.
- Canadian, American, and U.K. accounts.
- Access to human advisors.
- Savings account with competitive interest.
- Excellent educational resources.
Cons
- Limited choices in portfolio creation.
- Algorithms follow a generic buy-and-hold strategy.
- Higher account management fees.
- Limited personal finance tools.
- Must reveal personal data very early in the account setup process.
- Management fee of 0.5% is higher than average.
- Limited personal finance tools.
Wealthsimple Pricing
Wealthsimple Basic
Wealthsimple Basic is where most people will start. If your account balance is less than 100,000 US dollars, you’ll be using Wealthsimple Basic. With Wealthsimple Basic, you get access to all the good features that have made Wealthsimple popular.
- Socially responsible investing options
- High-interest savings accounts
- Unique tools to help turbo-charge your savings like Roundup and Overflow
- Management fee of 0.50%
- The ability to set up a wide array of account types like RRSPs, TFSAs, RESPs, and more
- Socially responsible investing options
- Three different ETF-based portfolios to suit your situation: Standard, SRI, or Halal portfolios in risk levels 1 to 10
- Auto-rebalancing, auto p, dividend reinvestment, and expert financial advice
- The ability to set up a wide array of account types like RRSPs, TFSAs, RESPs, and more
- The ability to set up a wide array of account types like RRSPs, TFSAs, RESPs, and more
- Socially responsible investing options
- Halal investing options
Wealthsimple Generation
If your family together has more than $500,000 in savings, you can get an account with Wealthsimple Generation. This tier gives you access to the benefits of both Wealthsimple Basic and Wealthsimple Black.
- 50% off a comprehensive health plan from Medcan.
- In-depth financial planning
- A team of dedicated advisors
- Portfolios that are tailor-made for you
- A personalized financial report that includes income planning in retirement
Wealthsimple Black
If you are investing $100,000 or more with Wealthsimple, you can get Wealthsimple Black. Your $100,000+ can come from any of your Wealthsimple accounts and still qualify for Wealthsimple Black. When you are a Wealthsimple Black member, you get special services. You get to do things that regular people cannot.
- Tax-loss harvesting
- A lower administration fee of 0.40% (versus 0.50% for smaller accounts)
- A financial assembly session with one of Wealthsimple’s expert advisors
- Tax-efficient funds
Should You Invest With Wealthsimple
The short answer is: Yes. If you tell people about your risk tolerance, then the money should be invested in a way that fits your needs. (And this applies to whichever investment service you choose.)Wealthsimple is a way to make money. If you are not good at producing money, it might be for you. You can set up an account and have no work to do.
Wealthsimple is safe. It is insured by the Canadian Investor Protection Fund (CPIF). If Wealthsimple goes out of business, your investments are protected. Wealthsimple provides a way to invest in the stock market from Canada. They are also a member of the Investment Industry Regulatory Organization of Canada.
Alternatives
Betterment
www.betterment.com
Star Rating
Betterment offers five main types of investing. One is for your retirement. Another is for an emergency fund. The other three are general investing, major purchases, and just saving money in the long term. The platform is easy to use. You can set goals. It tells you what you require to do for that goal. It tells you about the asset allocation for each goal in a ring with a worth in shades of green and fixed earnings in shades of blue. If you don’t meet your goal, Betterment will encourage you to save more. This is helpful because it reminds people about their long-term goals and helps them save money for those goals.
Betterment collects the information about your retirement. It knows what your dream retirement looks like and how much you have saved. There is also information on accounts outside of retirement. This last one is important. Many investors have numerous retirement accounts, and getting a picture of this can be hard. Betterment lay hold of all this data and then projects your retirement income and gives you a plan to get there.
They will tell you when you should save more or move money around to save on fees. As you get older, the platform will recommend changes you can make to optimize your savings for retirement. Digital members can pay $199 to $299 for a one-time consultation with a certified financial planner. Premium members have unlimited access to Certified Financial Planners.
If you desire to retire, make sure you open an account with Betterment. They are easy to set up and will help you plan how much money you need. Betterment is an investment company that uses a computer to suggest what your risk level should be. You can change the percentage of stocks and bonds by using a slider. It is not like other companies where they ask you questions about how risky you want to be.
Betterment has portfolios that are different from what you might have. They are transparent before you get your money in. You can see the financial prospects for the company by connecting bank accounts and investment accounts to Betterment, which will make it easier to transfer money into a Betterment portfolio.
M1Finance
www.m1finance.com
Star Rating
M1 Finance only accepts applications from people who are in the United States. Instead of using a robot, they use something called Pies. There are different types of stocks and ETFs in this list. You can make your own pie by going to the website. The broker’s pies are automatically rebalanced. M1’s service is free, and it is possible to talk to a human. Wealthsimple also has a free service, but you can only talk to the robot. If you have enough money, you can trade individual stocks and ETFs at both companies without paying any commissions.
Residents of Canada can open a Wealthsimple Cash account. There is no fee, and it pays 0.9% interest currently. The company is promising not to charge any fees for foreign transactions.
M1 Finance is one of the unique robo-advisors. Rather than build a portfolio for you, they let you create your own “pies.” Each pie has slices of stocks and ETFs (exchange-traded funds).
You can hold up to 100 securities in each pie. You can make as many pies as you want. M1 provides more than 60 pie templates, but you can generate your own. Once you construct a pie, it will be managed for you by the company M1 Finance. This means that you can generate your own portfolio, but someone else can manage it for you.
At M1 Finance, there is an account called M1 Spend. It is similar to Wealthsimple Cash, but the Tungsten card is not available, and they will only reimburse one ATM fee per month. For a $125 annual fee, they will reimburse four ATM fees per month. Paying an annual fee will get you some benefits. You will have a 1% annual yield and also 1% cashback on what you buy.
Wealthsimple customers can use a mobile app that is on both an Android and Apple phone. The software has tools to help with deposits into your account and tracking your account.
Bloom
www.blooom.com
Star Rating
Bloom is another robo-advisor service. It does not require your employer to be involved, and it is the only investment management service available for employer-sponsored retirement plans.
When you support the service, blooom takes over the management of your investments. You will need to tell them what you want your investments to be, and then they will pick out the investments for you.
The investment service will work with your investment options. It usually chooses the cheaper ones to put in your asset allocation. This software will do your retirement plan for you. It will recommend both an asset allocation and certain funds to use. It’s like a robot for your 401(k).
Conclusion
If you’re searching for a way to grow your money quickly and with little maintenance, Wealthsimple is one of the best options available. With an intuitive interface that makes investing easy, they have built a simple solution for those who want what feels like expert investment help without paying exorbitant fees or going through complex processes. Their low-cost portfolios are designed by experts in the field with decades of experience, so you can feel confident about where your money is being invested.