The name really says it all: Wealthsimple genuinely makes wealth management simple.
While robo-advisors and other methods of investing are still somewhat novel among many Canadians, Wealthsimple has done an exceptional job in bridging the gap between passive investing and the general public. They’ve also managed to eliminate the expensive portfolio management fees that come with financial advisors.
(And sure, robo-advisors might sound like absurd millennial lingo, alongside words like ‘microbrew’ and ‘gluten-free’, but this investment tool is a fronting a leading shift in the world of investing and is seriously worth paying attention to.)
Robo-advisors like Wealthsimple provide an opportunity for people of all financial backgrounds to increase their wealth and secure their financial futures. There is no requirement of extensive knowledge on how self-directed investing or the stock market works.
This Wealthsimple review presents a complete breakdown of the wealth management platform, the services it offers, and why many consider it to be one of the best robo-advisors in Canada.
In this article, you’ll learn:
- What is Wealthsimple, anyway?
- How Does Wealthsimple Work?
- Wealthsimple Review
- Fees and Features
- Is Wealthsimple Right for Me?
- Wealthsimple Sign-Up Promotion
What is Wealthsimple, anyway?
Wealthsimple is a digital wealth management platform founded and headquartered in Toronto, Canada.
Since 2014, it has established itself as one of Canada’s leading wealth management platforms, with offices based in New York, New York and London, England. It’s also won several awards and numerous nods from notable celebrities.
Its staple product is its robo-advisor platform but offers a variety of additional financial tools. Wealthsimple Trade, their discount brokerage, allows more active or experienced investors to make self-directed stock purchases.
How Does Wealthsimple Work?
One of Wealthsimple’s many clever slogans is “Investing on Autopilot,” which aptly represents how the robo-advisor works.
It allows users to invest without active involvement. It uses a Nobel-Peace Prize-winning algorithm shared by several other robo-advisors across the planet.
Passive investing, also known as the Couch Potato Investing, is an investing strategy that does not require constant monitoring or active trading. The algorithm makes trading decisions on behalf of the investor, who sets their risk tolerance profile during the sign-up process.
This approach to investing reduces the trading frequency and the cost of trading. Passive investing also eliminates frequent decision making, though it comes with less freedom and lower returns than self-directed investing.
There are three investment portfolios that are offered:
- Conservative Portfolios holds little to no risk and invests in more conservative investments. These investments include short-term, government, and high-yield bonds. It also places a portion of investments in real estate and dividend stocks.
- Balanced Portfolios offer a diverse combination of investments, in which risk and reward are equally dispersed. Portfolios include US Bonds, short term bonds, and government bonds. It also includes investments in real estate, foreign stocks, Canadian stocks, dividend stocks, emerging markets, and high-yield bonds.
- Growth Portfolios contain investments with high volatility. They are designed to bring higher returns but are much more susceptible to loss. These investments include US and Canadian stocks, Foreign Stock, Emerging Markets, and Short-term and government bonds.
Wealthsimple is renowned for its user-friendly platform, flexible investing options, and approachability for inexperienced investors. It offers a very charming mobile interface that makes decision making easy to wade through, without any investing jargon.
Wealthsimple Pros & Cons
- No minimum investment requirement
- Exceptional user-experience
- Outstanding customer service
- Access to experienced financial advisors
- Socially responsible and halal investing options
- Tiered investing options
- Web interface and mobile apps
- Higher fees than competition
There are many benefits that come with this wealth management platform, including top-notch user experience, no balance requirements, excellent customer services, ethical investing options, tiered rate options and perks, and mobile and desktop accessibility.
No Minimum Investment
- There is no minimum balance requirement upon sign-up, making it available to any Canadian who is interested in investing. New clients can open an account with as little as a $1.
- Since robo-advisors are geared towards beginners and rookies, means no minimum balance makes the platform accessible before investing.
- Wealthsimple is hyper-focused on the user experience, accessibility and straight-forwardness, focusing heavily on things like imagery and adjustable calculators to provide information to its users.
- A quick glance over the wealth management’s website will show many bright colours and dazzling branding; this is not something that leaves once you move forward with the robo-advisor.
Outstanding Customer Service
- Wealthsimple customer service is noted to be among the best available from any financial institution in Canada. Reviews commonly agree that the wealth management service provides great telephone and prompt e-mail customer service.
Access to Experienced Financial Advisors
- Wealthsimple offers financial advice from (human) finance experts that can answer all of your investing questions and provide insight into your financial goals.
- They are also fiduciary, meaning they are required to provide the best, most honest financial advice to their clients.
Socially Responsible and Halal Investing Options
- Socially Responsible Investing allows investors to put their money in portfolios that are ethical or reflect their values.
- The wealth management platform also offers a unique Halal Portfolio option. This allows investors the option of investing in ETFs that align with Islamic Law.
Tiered Investing Options
- Tiered Investing Options provide clients with discounts, features, and perks that enhance the experience of being a Wealthsimple customer: Basic, Black, and Generation.
Web Interface and Mobile App
- Keep an eye on your investments with a cutting-edge mobile app and a desktop interface that provides easy accessibility and consistent reliability.
- Both mobile and desktop platforms are enjoyable to use as well, with very sharp, clean graphics and images and a touch of modern minimalism.
- Nothing in life is perfect, and robo-advisors are no different. One commonly expressed disadvantage about the robo-advisor is listed below.
Higher Fees Than Competition
While the wealth management platform’s fees are very reasonable, Wealthsimple fees are commonly cited to be more expensive than the competition.
Fees and Features
Wealthsimple charges fees based on three deposit tiers: Basic, Black, and Generation. Each deposit level offers specific investing features and advantages.
All robo-advisors charge a fee known as a Management Expense Ratio (MER). Below is a breakdown of the deposit requirement, fees, and features that come with each investment threshold.
Wealthsimple at a Glance
|Best for||Wealthsimple is best for investors who value low fees and a super sleek user interface.|
|Availability||All of Canada|
|Account Options||Non-registered, RRSP, TFSA, RRIF, RESP, LIRA, HISA|
|Trading Fees||Included in MER|
|Annual Advice and
|MER||0.4% – 0.5%|
|Insurance||CIPF insured individual accounts for up to $1,000,000|
|Custodian||Canadian ShareOwner Investments Inc.|
|Dedicated Portfolio Manager||No.|
|Promotional Offers Available||Get $10,000 managed for free for one year when you sign up for your first Wealthsimple account.|
Deposit Requirement: $0 to $100,000
Trading Fees: None
A Basic portfolio comes with all of the rudimentary features, including automatic portfolio rebalancing and dividend renewal. It also comes with expert advice and a personalized investment portfolio.
Members can take advantage of a high-interest savings rate of 2%. Basic members can also access the discount brokerage no cost, with access to expert advice and consulting.
Deposit Requirement: $100,000 to $500,000
Trading Fees: None
A Black portfolio requires deposits between $100,000 and $500,000. In addition to all of the Basic features, Wealthsimple Black comes with an expanse management ratio of 0.4% MER.
Other features include various tax benefits such as loss of harnessing and efficiency on funds. Black members also get to speak with a financial planning session. Perhaps the most exciting features are access to their VIP airline lounge access.
Deposit Requirement: $500,000 +
Trading Fees: None
In addition to all of the Basic and Black advantages, Generation offers investors with deposits of $500,000 or more access to various financial planning options.
Additional features include asset allocation and a portfolio management team that provide consultation when required. The additional bonus includes a 50% discount on Medicare health plans.
Is Wealthsimple Right for Me?
Wealthsimple is a suitable option for investors who prefer taking a more passive route to invest. They’re an excellent option for novice investors seeking to invest their money over the course of several years.
Chances are, if you are fairly confident and knowledgable about self-directed investing, Wealthsimple Trade might be a more suitable option for you.
Wealthsimple Sign-Up and Promotion
Ratehub.ca readers who sign-up today can enjoy their first year of use for free on investments up to $10,000. That means no MER fee for the first 365 days.
To take advantage of this offer, click the link below.
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