Our Wealthsimple review examines what makes up this Canadian investment firm. This is an investment firm that’s mainly geared toward millennials. They have options to invest in crypto, no account minimum balance, and zero-dollar trading.
Wealthsimple is a Canadian investing platform focused on helping younger generations with their investments. The company was founded back in 2014 and is headquartered in Toronto, Ontario. While Wealthsimple operates as its brokerage, most of the company is owned by the Power Corporation of Canada (TSE: POW). This asset management firm focuses mostly on financial and insurance-based subsidiaries. As of 2021, Wealthsimple had over CAD 15 billion in AUM or assets under management.
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Wealthsimple Review Introduction
Wealthsimple is an all-in-one financial site for young Canadian investors. However, it operates as an extension of a normal bank account. Instead, it focuses on offering investing and savings products for its users with an entirely online model. According to a Wealthsimple review, they have over 1.5 million Canadian users. A majority of these clients are from the millennial generation.
As of now, Wealthsimple is strictly for Canadian investors. While you can buy American company shares and trade stocks on the US markets, the platform is only for users north of the border. We shouldn’t feel too left out, though.
We have dozens of investing and financial products in America that Canadians cannot access. Some of these include SoFi (NASDAQ: SOFI), Square (NYSE: SQ) and its Cash App, PayPal’s (NASDAQ: PYPL) Venmo app, and, of course, Robinhood (NASDAQ: HOOD).
What Sets Wealthsimple Apart?
In Canada, there are just not as many options for people who want to invest. The current landscape of brokerages mostly consists of the major banks. They charge an arm and a leg for trading fees. Wealthsimple entered the chat and revolutionized the Canadian investment market by providing features that the big banks won’t match. Let’s look at some of the best features they offer their Canadian clients in this Wealthsimple review.
Socially Responsible Investing, or SRI, is a method that eliminates companies that can be deemed harmful to society. These include companies that deal with weapons, drugs or alcohol, tobacco, and even fossil fuels. This movement has gained some popularity recently, and Wealthsimple is very much into it.
Wealthsimple offers its users a few risk-weighted SRI portfolios from which to choose. While these certainly aren’t for everybody, it is another way that the company has appealed to younger investors. Hence our Wealthsimple review.
Wealthsimple even offers something called a Shariah-compliant portfolio. If you are familiar with Islamic law, there are many things deemed to be sinful. Like the SRI portfolios, the Shariah-compliant portfolios provide those who follow Islamic law with peace of mind investing. This has been especially popular in Toronto, with a significant Muslim population.
Platform
Wealthsimple Invest is the core of the platform and the part of the site that attracts the most users. The zero-dollar trading fees are worth it for most Canadian investors, especially high-volume traders. The platform allows users to buy and sell stocks or ETFs from the US and Canadian markets. Wealthsimple charges a foreign exchange fee if you transact with a US asset.
The Wealthsimple Invest platform has received high ratings from across the industry. It is fast and intuitive and helps make investing simpler for younger investors. There are some shortcomings with Wealthsimple’s platform, though.
First, you cannot trade options contracts, so it’s best to look elsewhere if you are an options trader. Big banks in Canada will allow options trading, but the fees are higher, and you generally need permission from the bank to do so. The asset management fees for Wealthsimple are a bit higher than the market rates. This won’t matter for most investors, but for people with large balances, it can have a long-term effect on your portfolio.
We found in this Wealthsimple review that they even offer accounting management support. Which can offer investors advice and suggestions to help balance their portfolios. The company also added a micro-investing service that takes a few cents from purchases and transfers and directly adds those to your Wealthsimple account. You can then allocate these funds as you wish, and the more you do it, the more your balance will compound over time.
COURSE |  |  |  |
|---|---|---|---|
| DESCRIPTION | Learn how to read penny stock charts, premarket preparation, target buy and sell zones, scan for stocks to trade, and get ready for live day trading action | Learn how to buy and sell options, assignment options, implement vertical spreads, and the most popular strategies, and prepare for live options trading | How to read futures charts, margin requirements, learn the COT report, indicators, and the most popular trading strategies, and prepare for live futures trading |
| INCLUDED | Daily watch lists • Trade rooms • Trading scanners • Discord • Live streaming Day Trading > | Daily watch lists • Trade rooms • Options scanners • Discord • Live streaming Options > | Futures target levels • Trade rooms • Real time teaching • Discord • Live streaming Futures > |
Wealthsimple Fees and Pricing Review
I know, I know. Zero-dollar trading fees have become the norm in the US. But as I said, it’s a very different story in Canada. The major banks have a near-monopoly in Canada. They often charge up to $10.00 per stock trade! Wealthsimple is one of the first platforms to offer zero-dollar trading.
And that has been a very popular feature amongst younger investors. While Wealthsimple does charge slightly higher than normal account management fees, stock traders can save a small fortune by trading here rather than with the big banks. If you like zero-dollar trading fees, you’ll be happy to keep reading this Wealthsimple review.
No Account Minimum Balance
Yet another feature in this Wealthsimple review that helps younger investors start investing. Since Wealthsimple targets users who are millennials or younger, a lot of times, they will not have a lot to invest. Allowing them to open an account without a minimum balance helps them feel more welcome, and they are usually more inclined to fund their accounts.
Keep in mind that there are different levels of Wealthsimple accounts. Only the Wealthsimple Basic offering has no minimum balance requirements. If you maintain a balance of at least CAD 100,000, Wealthsimple will bump you to the Wealthsimple Black account.
Again, you can see the state of the investing market for our neighbors to the north. Most brokerages in the US offer fractional share investing these days, but in Canada, only a handful do. None of the big banks currently allow it, and only a few brokerages available in Canada do.
This is certainly another feature that this Wealthsimple review found added to appeal to younger investors who generally have less money. While the merits of fractional share investing are still debated, it helps new investors who want to buy shares of companies like Amazon (NASDAQ: AMZN) or Alphabet (NASDAQ: GOOGL).
Crypto
That’s right, another feature that sets Wealthsimple apart from the big banks is the ability for users to trade cryptocurrencies. Cryptos have become a major investment market around the world. And yet, somehow, Canada is lagging once again. Wealthsimple is Canada’s first regulated crypto platform, where you can buy tokens or fractions of Bitcoin, Ethereum, Dogecoin, and much more. One of the largest complaints about how Wealthsimple handled crypto trading was that the platform held those assets in its ecosystem. Crypto traders would be unable to remove their crypto from the site if they want to invest it elsewhere or store it on a cold storage device.
Wealthsimple recently announced that it would soon allow transfers to and from the platform. This means that crypto traders on Wealthsimple can trade cryptos on the site and then move them wherever they want. Once again, who likes to trade cryptos? Millennials and younger investors are looking for big gains over a shorter period. Wealthsimple has done well to add crypto trading right into the foundation of its platform.
Cons
Hey, there’s no such thing as the perfect brokerage site, and Wealthsimple certainly has its share of cons. First, I already mentioned the account management fees, which can range from 0.40% to 0.50%, depending on the size of your balance. Most other brokerages charge rates that are 0.30% or lower.
Second, Wealthsimple lacks financial tools to help young investors plan for the future. Not many calculators or tools can help plan your future through your investments. While it is easy to find these on the internet for free, it would be nice if all of this was included in the platform.
Final Thoughts: Wealthsimple Review
We hope you enjoyed this Wealthsimple review. If you’re a Canadian investor, Wealthsimple offers a very convincing list of features for your online brokerage. There are things that Wealthsimple provides that are nowhere near being offered at the traditional big banks.
The list includes zero-dollar trading fees, crypto trading, and fractional share investing. In my opinion, the zero-dollar fees for trading are worth switching over on their own. The thought of paying $10 per trade is enough to turn anyone into a passive investor.
Adding in crypto trading was impressive, and the company is making it even more enticing by adding the ability to move your cryptos off the site. The pros far outweigh the cons for Wealthsimple, and any Canadian investor should take advantage of this incredible site!
Frequently Asked Questions
Investors cannot purchase shares of Wealthsimple because the company is privately held.
