Wealthsimple Invest Review
Founded in 2014, Wealthsimple is an online-only financial service organization that oversees over $4B worth of investments. A Canadian company founded by CEO Michael Katchen, it has since expanded to the UK and the United States. It is the largest robo advisor in Canada, with 1.5 million users worldwide. Wealthsimple offers a variety of services like Wealthsimple Trade, Wealthsimple Cash and more. Wealthsimple Invest is the company’s robo-investing arm.
Robo investing is totally passive investing where the investor has a completely hands-off relationship with their portfolio. Wealthsimple Invest picks all the ETFs (Exchange Traded Funds) for you (all of the funds in a Wealthsimple Invest portfolio are low-cost ETFs) and also rebalances your accounts when necessary.
Want to find out whether Wealthsimple is really worth it? Our Wealthsimple review takes you through how Wealthsimple Invest works, the pros and cons of the robo investing arm of the Wealthsimple family, as well as how it compares to other similar online services.
In This Article:
How Wealthsimple Invest Works
Wealthsimple’s mandate is to save clients money by allowing them to invest passively in a variety of low-cost exchange-traded funds (ETFs).
When you sign up you’ll be asked to fill out a questionnaire about your retirement goals, your timeline for how long you have to build up your savings, and how risk-averse you are.
Based on your responses, Wealthsimple Invest uses investing algorithms to match you to a diversified portfolio that fits into one of three categories: Conservative, Balanced or Growth.
When you choose your portfolio, you can also decide what kind of savings account you want to put it in. Wealthsimple Invest offers clients a variety of accounts available, including RRSPs and TFSAs, as well as low-MER socially responsible investing portfolios that divest from industries like oil and firearms and invest in companies prioritizing human rights, reduced carbon emissions, and cleantech.
In my case, because I am comfortable with some risk and moderate but relatively reliable returns, both the RRSP and TFSA I have with Wealthsimple fall into the “Balanced” category. If you’re looking for more growth and are willing to accept more risk to do so, you would likely be given a “Growth” portfolio.
After you fill in the questionnaire and Wealthsimple matches you to a portfolio, your role becomes that of a passive investor. You don’t need to do any research or closely follow the stock markets if you don’t want to. You also won’t do any buying or selling of individual stocks; Wealthsimple does it all for you.
The company creates (and then continues to rebalance) your personalized ETF portfolio based on “modern portfolio theory,” a Nobel Prize-winning investment strategy developed by Harry Markowitz. Without going into complex details, the theory prioritizes portfolio diversity to minimize risk. The belief is that the best way to secure investment savings is to stick with a basket of slow-but-steady earning stocks; that way you’re unlikely to get massive windfalls, but you also won’t suffer massive hits either.
Wealthsimple’s wholly owned brokerage, Canadian Shareowner Investments Inc., is a member of the Canadian Investor Protection Fund, which protects your account up to $1,000,000 if an investment firm becomes insolvent.
Different Plans for Wealthsimple Invest
There are three different plans available with Wealthsimple Invest.
Wealthsimple Basic: For clients with net deposits from $0 up to $100K. Clients are charged a monthly fee of .5% of their account value. Included in the fee is portfolio creation, automatic portfolio rebalancing and automatic dividend reinvesting. You also have the option of setting up automatic investing.
Wealthsimple Black: For clients with net deposits of more than $100K. The fee is slightly lower than the Basic account at .4%. Aside from a reduced fee, it has extra perks like a financial planning session and tax loss harvesting assistance.
Wealthsimple Generation: Generation is for accounts of $500,000 or more and charges a management fee of .4%. Included with the account is a customized personalized financial report, tax-loss harvesting, and 50% off a Comprehensive Health Plan from Medcan. Furthermore, the account is optimized for tax savings.
Cost and Fees
|Account Type||Deposit Amount||Management Fee||Key Features|
|Basic||$0 - $100,000||0.5%||Auto-Rebalancing
|Black||$100,000+||0.4%||Financial Planning Session
Tax Loss Harvesting
Tax Efficient Funds
Team of Advisors
Personalized Financial Reports
Each plan offers the features of the preceding one in addition to its own set of features that make it stand out. The fees range from 0.5% – 0.4% and are reasonable for the services accessible including in-depth financial planning, expert advice, auto-rebalance, and more. You can also get a 50% discount with Medcan Health if you sign up with the Black plan.
The average MERs for Wealthsimple ETFs stand at about 0.2% unless it’s an SRI which would range from 0.25% to 0.4% MER.
According to the website, your Wealthsimple Invest fee is calculated on a daily basis by dividing the annual fee by 365 days and applying it to the closing market value of your portfolio on that day. These daily portions are added up and then are charged to your account on a monthly basis. In short, the fee is quoted annually, calculated daily, and applied monthly.
Who Can Invest with Wealthsimple?
Anyone can use Wealthsimple Invest. Because of its hands-off approach to investing, it’s especially ideal for new or inexperienced investors who are normally intimidated by the stock market and don’t have a good grasp of how it works.
Wealthsimple is also a good match for experienced investors who want to have some portion of their portfolio allotted to passive investing in order to save time.
Best of all, there is no minimum deposit required to start investing, which makes Wealthsimple Invest more accessible to all.
In order to use Wealthsimple, you must either be a Canadian citizen, a Canadian resident or have a valid Canadian Visa. In addition, you must have a SIN number, meet the minimum age of majority set by your province, possess a Canadian residential address, and be able to complete identity verification requirements.
- Minimum Investment: You don’t need to have a minimum investment to open a Wealthsimple Invest.
- Account Types: Wealthsimple Invest offers numerous kinds of accounts, including personal accounts, RRSPs, TFSAs, RESPs, RRIFs, LIRAs and even corporate accounts. Joint accounts are also available.
- Portfolios: Three main kinds of portfolios: Conservative, Balanced or Growth, as well as a unique Halal portfolio and a socially responsible portfolio.
- Tax Loss Harvesting: Included with Black and Generation plans.
- Investing Advice: As an online-only, low-cost investing platform, Wealthsimple Invest does not offer professional investment advice, though they can answer general questions about your portfolio. With a Black plan you do get one brief investing session with a pro, and with the Generation plan you have access to a more in-depth financial planning session.
- User-Friendly Website: Wealthsimple Invest is filled with colourful graphs that make it easy to understand where your money is invested and how it’s growing. The dashboard provides a comprehensive look at your overall financial picture and its interface allows you to move effortlessly between your accounts if you have more than one. Use the interactive slider graphs to see an estimate of what your savings will be at any point in the future.
- Overflow and Roundup: A Wealthsimple Invest account makes saving money even easy and hassle-free with these extra features.
- Customer Service: As an online financial services firm, there are no physical offices to meet with a financial advisor. Wealthsimple Invest customer service is therefore limited to phone, text, social media and email. You can call them directly Monday-Friday: 9am – 5:30pm (EST).
- Price Alerts: Alerts allow you to track the prices of stocks, ETFs, or cryptocurrency.
Is Wealthsimple safe?
Yes, Wealthsimple is safe. Assets on Wealthsimple Invest and Wealthsimple Trade accounts are held by ShareOwner Investments Inc., which is a Canadian Investor Protection Fund (CIPF) member and is regulated by the Investment Industry Regulatory Organization of Canada (IIROC). In the event of Wealthsimple and ShareOwner going bankrupt, all accounts with Wealthsimple are CIPF insured up to $1 million.
In addition, Wealthsimple protects your information through two-step verification, encryption, modern cloud technology backups, and a behind-the-scenes security team. Wealthsimple also does not sell any of their clients’ data.
Pros and Cons of Wealthsimple Invest
- Low fees
- Completely passive investing so ideal for a newbie investor or someone who doesn’t have time to manage their own portfolio
- Variety of portfolios, including Halal investing and sustainable
- Three levels of plans
- Lots of account options
- Easy access to Wealthsimple Invest’s other services
- Overflow and Roundup features
- No one-on-one investing advice for the Basic plan
- Can be hard to a get quick response via email and phone
How Does Wealthsimple Compare to the Competition?
Wealthsimple Questwealth Portfolios CI Direct Investing
Welcome Offer $25 bonus for a $500 minimum initial deposit None Up to $10K managed free for a year
Management Fees 0.4% or 0.5%/year 0.2% or 0.25%/year 0.35%–0.6%/year
MER Approx. 0.2% Regular portfolios: 0.11%–0.23%; SRI portfolios: 0.21%–0.35% ETF MERs: 0.16%–0.26%;
Private Investment Portfolios' MERs: 1.00%–1.55%
Minimum Balance None $1,000 $1,000
Questwealth Portfolios really shines among Canadian robo-advisors in that it charges very low management fees: 0.25% for balances up to $99,999 and 0.2% for balances above that. That’s half the management cost of using Wealthsimple.
That said, Questwealth Portfolios has its weaknesses as well. There are no extra savings available via a special welcome offer, and a $1K minimum balance makes it less than ideal for those who are skittish about robo-advisors and looking to try one out risk-free. I’m also partial to Wealthsimple’s design and user experience, which I find more interactive and a bit easier to look at.
CI Direct Investing (formerly WealthBar) starts new account holders off with one of the best welcome offers among Canadian robo-advisors: up to $10K managed free for a year, for a savings of up to $60. It also stands out by offering all clients unlimited financial advice, no matter what their account balance. Clients can choose to invest via the traditional robo-advisor route of ETFs, or in Private Investment Portfolios, which diversify investments beyond ETFs and into private equity, real estate and more. These additional types of investments are not offered by Wealthsimple or Questwealth Portfolios.
However, CI Direct Investing management fees will be comparatively high for most investors, and favour those with a lot of money to invest. Accounts of $500K or more pay 0.35% in management fees; those between $350K–$500K pay 0.4%; and less than $150K pay 0.6%, which is far more than both Wealthsimple and Questwealth Portfolios for balances at that level.
Other Products from Wealthsimple
Wealthsimple Invest has now expanded beyond its core robo-advisor service into other facets of personal finance, and those who are drawn to Wealthsimple Invest might also be interested in these offerings.
Unlike Wealthsimple Invest, Wealthsimple Trade allows those who are comfortable with self-directed investing to make their own decisions about what securities they want to buy and sell. Conversely, Wealthsimple Invest is a robo-advisor in which funds are invested into pre-built portfolios and automatically rebalanced to stay aligned with the investor’s risk tolerance and time horizon.
While Wealthsimple Trade started as a mobile app, you can now access it on your computer as well. It stands out from other self-directed brokerages because it doesn’t charge commission fees, which can potentially save investors a substantial amount.
Read our full Wealthsimple Trade review to learn more.
You can buy and sell Bitcoin and Ethereum 24/7 with Wealthsimple Crypto. Wealthsimple Crypto is available on iOS and Android through the Wealthsimple Trade app. Though you access Wealthsimple Crypto trading via the Wealthsimple Trade app, you nonetheless have to set up a separate Crypto account to use the app.
Read our full Wealthsimple Crypto review to learn more.
The new Wealthsimple Save app is the latest version of Wealthsimple Cash. It’s only available through a mobile app right now (although you can see your account on your PC). With the app, you can send and receive cash instantly for free. The money in your Wealthsimple Cash account currently earns .75%. with no monthly account or low balance fees. That said, most of its anticipated chequing-like features, such as bill pay, a card you can use like a debit card and ATM withdrawals, are still in development.
Read our full Wealthsimple Cash review to learn more.
Wealthsimple Tax is an affordable income tax filing platform aimed at Canadians with a relatively straightforward tax situation requiring minimal external guidance. The service is technically free, though users are encouraged to make donations to support the platform’s maintenance and development.
Read our full Wealthsimple Tax review to learn more.
Price Alerts Feature
Wealthsimple offers price alerts to allow you to track when the price of a stock, ETF, or cryptocurrency moves a certain amount in either direction. The price alert can be a notification that comes right to your mobile device, depending on the settings of your Wealthsimple mobile app.
There are three different kinds of price alerts you can set up with Wealthsimple. The alerts can notify you if:
- The security reaches a set price.
- The price of the security goes up by a certain percentage.
- The price of the security goes down by a certain percentage.
When the price of the investment moves to your set figure, you immediately get notified so that you’re aware of this news.
So, for example, if you’re looking to invest in Ethereum, you can set a price alert that notifies you when the value goes up or down 10% or if the coin were to reach a specific price. This price alert feature lets you stay informed of market movements without being glued to your screen.
You can also set up an unlimited amount of price alerts with Wealthsimple so you can track as many assets as you’d like. You’d be informed of multiple market movements as they happen.
How to Get Started with Wealthsimple
- Signing up for a Wealthsimple Invest is incredibly easy and not intimidating at all. You just click the “Get Started” button in the upper right corner of the website and you’ll then be asked to provide an email and password and confirm that you live in Canada.
- Next, you’ll be asked what kind of products you want to sign-up for. Just select Wealthsimple Invest.
- You’ll then be asked a series of questions so Wealthsimple Invest can design your portfolio. Questions will concern your basic information, as well as include what your investment goals are (i.e., retirement or short-term savings etc) and how risk-averse you are.
- Depending on how you answer the questions, you’ll then get a portfolio from one of three categories: Conservative, Balanced or Growth.
- Next, you’ll just need to connect a bank account so that you’ll be able to withdraw money to fund your Wealthsimple Invest account. Linking your bank account can take up to five business days.
- Once it’s linked, you can deposit as much as you feel comfortable into your Wealthsimple Invest account and that money will be put into your portfolio.
- That’s it! You never really have to think about your portfolio again unless you want to add more funds!
Wealthsimple Invest is an excellent choice if you’re comfortable banking online and looking for a straightforward, low-cost way to invest your money that doesn’t require much personal participation or stock savvy. Use Wealthsimple Invest if you’re just starting to explore the world of investing but you’re not yet confident enough to call the shots yourself and make trades independently. If you’ve saved up some money and given some thought to your financial goals and risk tolerance, Wealthsimple Invest can help you invest your funds while you continue to learn more about the market, the different securities out there, and how to assess their value.
Wealthsimple Invest is not a good fit for those who like taking a hands-on approach to investing. If your idea of a fun Sunday afternoon is poring over a company’s annual report, you might be better off exploring a self-directed online broker like Wealthsimple Trade.