Wealthsimple

8.9

Fees and Deposit Limits

7.8/10

Flexibility

8.2/10

Ease of Use

9.6/10

Account Types and Services

9.4/10

Budget Flexibility

9.5/10

Pros

  • First $10,000 Managed Free (using our link)
  • No minimum deposit
  • Free tax loss harvesting and automatic rebalancing
  • Socially-Responsible Investing
  • Lots of Account Features & Options

Cons

  • Limited personal finance tools
  • Lack of flexibility for hands-on investors
  • Higher than average management fees

Wealthsimple Financial Inc. was established by Michael Katchen in Toronto, Canada in September 2014. The firm has $5 billion in assets under management (AUM) and over 175,000 clients as of August 2019. The growth is driven by the introduction of Wealthsimple in the US market back in 2016.

The Wealthsimple Robo Advisor may be a relatively new entrant in the market, but it also happens to be the largest Robo Advisor in Canada before entering US territory. That is no easy feat considering the fact that Canada has a good collection of Robo Advisors such as NestWealth and WealthBar.

In this Wealthsimple review for 2020, we will find out how the service fares in terms of low fees and deposit limits, account and investment types, flexibility, and ease of use. We will also find out if Wealthsimple will score high enough to become one of the best Robo Advisors in terms of affordability and ease of use.

Annual Fee 0.4% – 0.5%
Promotion First $10,000 Managed Free
Minimum Investment $0
AUM (Assets Under Management) $5 billion CAD
Headquarters 3 Lagoon Drive, Suite 200
Redwood City, CA 94065
Savings Account Yes
Desktop App Yes
Mobile App Yes
Socially-Responsible Investing Yes
Customer Service Live support via email, phone and social media
Email [email protected]
Phone 855-782-3559

Wealthsimple Fees

fees priceWe always discuss the fees and deposit limits before proceeding to other criteria. In this regard, Wealthsimple gets a high score because the service comes with a $0 account minimum. If this is the case, your account will be under the Wealthsimple Basic offering and will come with free dividend reinvestment, automatic rebalancing, and automated deposits.

There’s more good news: Wealthsimple will charge zero fees on trading, tax-loss harvesting, and transfers, which allows you to save money on hidden fees.

But there’s a caveat. Wealthsimple has a 0.5% management fees on account balances between $5,000 and $100,000. If your account balance is above $100,000 (categorizing it under Wealthsimple Black, which is appropriate for larger investments), the management fee is 0.4%. Although this is higher than the management fees of Wealthfront, for example, the extra features offered with Wealthsimple Black might be worth the extra cost. Read on to find out.

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Wealthsimple Basic

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Wealthsimple Black

If you sign up using our link, your first $10,000 investment will be managed for free. There are no hidden charges and you don’t need to do anything special. Simply sign up using our link and they will manage your first $10,000 for free!

Canadian investors should note that Nest Wealth might be a better choice for you if you’re investing over C$150,000. Due to their fee structure and lower overall Management Expense Ratio (MER), Nest Wealth becomes increasingly less expensive to invest with.

Are you paying higher fees elsewhere on your RRSP, TFSA, or other accounts? You don’t have to. Transfer any accounts worth $10,000 to Wealthsimple and they’ll cover any transfer fees your bank charges you.

So far, Wealthsimple offers no minimum deposit but has slightly higher management fees. It would have been great if the management fee was on par with the charges levied by the top services. However, they offer a lot of features such as Smart Savings with a high interest rate, Microinvesting, and extended portfolio options that many other services do not. If you’re Canadian and investing a larger amount, you should also take a good hard look at Nest Wealth.

We do, however, really like the tiered structure – if you have a larger amount to invest (over $100,000), they reduce the management fees to 0.4% and offer extra features. We think more robo advisors should do this.

Flexibility

flexibilityWealthsimple Invest is a fully-automated wealth management service. Although the service comes with automatic rebalancing and dividend reinvestment, this is not the type of service that is ideal for hands-on investors.

This comes as no surprise since the Wealthsimple app will put all your investments on autopilot by utilizing the Modern Portfolio Theory. The service is also tweaked for younger investors who prefer to automate their investments using a beginner-friendly customer experience. If you happen to be a hands-off investor with large taxable accounts, Wealthsimple might be the right choice.

Ease of Use

Signing up consists of a simple process that involves completing an online application on their website, entering your email address, giving your E-signature on the required Investment Management Agreements, and entering your account information, including your bank account to make a transfer. After this, your new Wealthsimple account will be ready in a few days so you can begin investing.

Wealthsimple offers free 401(k) assistance, tax-loss harvesting, portfolio rebalancing, automatic weekly, bi-weekly, and monthly deposits, and socially responsible investing in a fully automated account. It might be not as flexible as some services, but Wealthsimple shines when it comes to ease of use.

Account Types and Services

Wealthsimple iPhone DashbaordWealthsimple Invest consists of two types of accounts: Wealthsimple Basic and Wealthsimple Black. The former is ideal for investors with a minimum balance of $100,000 and comes with extra financial services and lower fees, which we’ll talk about below.

Remember, the first $10,000 in your account is managed for free for the first year if you use our link.

Wealthsimple Black is appropriate for investors with account balances of $100,000 and up. Clients under this plan will pay a lower management fee of 0.4% and get goal-based investing. You also get dedicated financial planning from expert financial advisors so you can meet your financial goals.

If you have over $500,000 to invest in Wealthsimple, you’re automatically upgraded to their “Wealthsimple Generation” account type, which gives you comprehensive financial planning, individualized portfolios, and a dedicated team of advisors.

Wealthsimple offers taxable, traditional IRA, and SEP IRA accounts. It also offers joint, trusts, Roth IRA, and Rollover IRA accounts. All taxable accounts get free tax-loss harvesting. Non-taxable accounts benefit from portfolio rebalancing and human-assisted financial advice.

Your investment portfolio will consist of ETFs from 16 asset classes. You also get individual stocks for halal portfolios. Wealthsimple also shines in this regard since it gives American investors the opportunity to invest in SRI portfolios, and halal investing products. If you are a socially responsible investor or if you are seeking halal investment choices, you will definitely love your investment options with Wealthsimple.

Other Services & Features

Wealthsimple Cash & Save

Wealthsimple_Cash_AppHigh-Yield Savings Accounts have been all the rage lately amongst robo advisors, with all the major players offering one.

Wealthsimple is no exception. In fact they offer two different savings accounts – one for Canadian customers called Wealthsimple Cash, which was launched in January 2020, and one for American clients called Wealthsimple Save.

Due to the differing laws and economies, the two accounts offer two different APYs (annual percentage yield – this is what you earn from the money sitting in your account) but have basically the same features otherwise: A safe place to put your Rainy Day Fund when you aren’t investing it that earns a (much) higher APY than the market average. Additionally, both accounts offer unlimited free transactions, no account minimum, insurance, and a high level of security.

The Canadian Cash account takes it a step further by offering a beautiful tungsten metal card that will surely make you feel more important, free withdrawals, ATM fee reimbursement, and no foreign transaction fees, making Cash a hybrid savings/spending account.

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Wealthsimple Cash (CA)

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Wealthsimple Save (US)

Wealthsimple Roundup

Wealthsimple RoundupWealthsimple also has a brilliant micro-investing service that the company calls Wealthsimple Roundup. The service allows you to invest spare change in a smart portfolio using low-cost ETFs. It is simple and easy to use. All you need is to turn on the Roundup feature in the Wealthsimple mobile app. Every time you make a purchase using your debit or credit card, the service will round up the purchase to the nearest dollar and invest the spare change.

For example, if you spent $19.25 on your favorite ride-sharing service, the purchase will be rounded up to $20 and the spare $0.75 will be automatically invested. The portfolio will grow as you spend more. We think is a great addition to an already impressive robo advisory service.

Wealthsimple Trade (Canada Only)

Wealthsimple Trade appCanadians are a lucky bunch, as they not only get Wealthsimple’s super high 0.90% APY on their Cash accounts, but they also get commission-free stock and ETF trading with their Wealthsimple Trade accounts.

While most major banks and brokerages charge $5-$10 per trade, Wealthsimple’s new Trade feature disrupts this model by introducing a trading platform that allows for unlimited $0 trades.

While there are some obvious huge benefits here, there are a few things to consider before signing up:

  • Wealthsimple, along with most other robo and financial advisors suggest that trading stocks directly is too risky for a healthy diversified portfolio
  • Day Trading is highly discouraged on the platform
  • No real-time quotes (they’re delayed about 15 minutes)
  • No penny stocks
  • A 1.5% USD <-> CAD conversion fee (this is how they make money)

If those are manageable caveats for you, the Wealthsimple Trade might be the perfect trading platform for you.

Investing Master Class

Wealthsimple also launched their free Investing Master Class in 2019 to help new investors get a handle on their personal finances and investments in a jargon-free, easy-to-understand way.

The Master Class consists of 10 short videos, each covering topics such as the Stock Market, Investing 101, Saving vs. Investing, Automating Your Finances, and more. The videos will get you from zero-to-investor and they’ll only take a total of 45 minutes to do it.

We highly recommend watching these videos.

Suitability for Different Investment Budgets

Even though the account minimum is $0 for the Wealthsimple Basic service and will charge 0% advisory fees for the first year if your account balance is from $0 to $10,000, the service will impose a 0.5% fee for anything above that, up to $100,000.

The $0 account minimum is great, but the high management fee is a letdown. The good news is Wealthsimple will only charge 0.4% if your account balance is above $100,000. In this regard, your account will be classified under Wealthsimple Black. The advisory fee may be lower than Wealthsimple Basic, but it is still higher than the industry standard since Betterment and Wealthfront will only charge you 0.25% (although Betterment also charges 0.40% for their $100,000+ Premium service.)

And if you’re Canadian, any amount over C$150,000 might be better invested over at Nest Wealth, based on their fee structure.

The Wealthsimple automated investment service is great for investors with both high and low budgets. The service also offers a lot of features, but all of it comes at a price.

Overall Summary

Wealthsimple is one of the best Robo Advisors for beginners, socially-responsible investors, high net worth investors, and especially Canadian investors. The service is easy to use and offers a plethora of free premium features (automatic rebalancing and tax loss harvesting) along with access to human financial advisors.

If you want a more hands-on investing experience, you may want to look elsewhere. But if you’re a values-based investor or want a hands-off automated investing experience, Wealthsimple will be a good choice for you.

Disclaimer: BestRoboAdvisors.org has entered into a referral and advertising arrangement with Wealthsimple US, LTD and receives compensation when you open an account or for certain qualifying activity which may include clicking links. You will not be charged a fee for this referral and Wealthsimple and BestRoboAdvisors.org are not related entities. It is a requirement to disclose that we earn these fees and also provide you with the latest Wealthsimple ADV brochure (PDF) so you can learn more about them before opening an account.