- No minimum deposit
- Easy account setup
- Great customer service
- Social Accountability investing
- Best program around for passive investors
- Only suited for passive investors
Before I start this Wealthsimple review, it is important to first understand the inner workings of a Robo-Advisor. Robo-Advisors are relatively new fin-tech investment platforms with the first one having been launched in 2008. They are a web-based trading platform offering financial services through proprietary algorithms. Unlike most financial service planning services, there is typically little human interaction as the process is primarily automated. If you’re not looking for this and would rather do your own investing, you are much better off checking out our Questrade review. Here is Stocktrades Wealthsimple review for 2018.
Wealthsimple Review 2018 | How does Wealthsimple work?
The process is quite simple and ideal for novice investors or for seasoned investors looking for an alternative to traditional brokers. A Robo-Advisor like Wealthsimple gathers information on a client’s financial situation, goals & objectives. The system then uses its proprietary algorithms to analyze the data. The advisor then auto-generates financial advice and can auto-invest on the client’s behalf. As opposed to the early days when Robo-Advisors were used primarily as a rebalancing tool, monopolized within the confines of traditional investment firms, they are now available to the public and the financial services they can provide are now quite complex. From tax-loss harvesting to retirement planning, Robo-Advisors like Wealthsimple are quickly becoming a novice investor’s tool of choice. In the U.S., Robo-Advisors have approximately $100 billion in assets under management (AUM). Although the total AUM for Robo-Advisors in Canada is not known, there is one company who has been more forthcoming with the public than most.
That company is Wealthsimple, who recently announced that they have more than $1 billion in AUM.
Wealthsimple is Canada’s largest Robo-Advisor, who only recently entered the U.S. Market. The company is well financed and is backed by Power Financial Group. Power Financial Group is one of Canada’s leading financial services companies. One of the services that set Wealthsimple apart from its competitors is its focus on social accountability. The company offers investors the option to build a Social Responsible Investing (SRI) portfolio comprised of companies focused on cleantech, low carbon, human rights and stocks that prioritize environmental and societal concerns.
Wealthsimple Review 2018 | Wealthsimple Account Setup
Wealthsimple lives up to its name as the process for setting up an account is extremely simple. Investors have two options, they can transfer funds from an existing account or they open a new account. If investors choose to transfer funds from an existing account, they will be subject to the typical transfer fees depending on where you are transferring from. The good news is that if you transfer $5,000 or more, Wealthsimple will take care of the fees for you.
For the purpose of this review, I proceeded with opening a new account. Once I selected “New Account”, the process was very simple and intuitive. After selecting the type of accounts I wished to open (see Type of Accounts section below) and answering some very basic information, Wealthsimple sent me a confirmation email. After confirming the email, my account was set up. Done, it was as simple as that and the process took less than 2 minutes.
Wealthsimple Review 2018 | Wealthsimple Investment Plans
Prior to proceeding with anything else, you are required to answer some basic investing questions so that Wealthsimple can use their system to build an investor profile for you. This is a standard process for any broker as they want to ensure that they invest your money according to your level of risk, financial situation, etc.
Having been in control of my own investments for 10+ years, I am well versed with my investor profile, so I was interested to see if Wealthsimple’s system would accurately reflect my profile. The questionnaire is estimated to take about 5 minutes and once again it was quick, easy and intuitive. Following the questionnaire, I was presented with my personalized investment plan. How did it compare to my expectations? I am happy to report that their plan was in-line with my own investment philosophy. Wealthsimple’s questionnaire actually works, and to a new investor who may not know exactly what they want in an investment portfolio, you can be sure that Wealthsimple will guide you in the right direction.
The plan itself was very easy to understand and visually appealing. It included a graph with expected returns and subsequently detailed proposed allocations and asset mix. Likewise, investors are presented with an option to make their portfolio social responsible. When selecting this option, everything is automatically updated to include an asset mix of socially responsible ETFs.
Finally, investors also have the option to adjust some of their future goals which, once updated, Wealthsimple automatically updates your proposed allocation and asset mix.
Wealthsimple is the easiest and most intuitive investment profile around
Once investors choose to “Start Your Plan”, you can transfer funds. Over the years, I have tried various discount and big bank brokers and without hesitation, I can say that Wealthsimple was the easiest and most intuitive investment profile setup that I have ever encountered.
The only thing preventing me from rating this section 10/10, is that there is a box that first appears on the right side of your page. In it, it explains that you must speak with a representative prior to investing with Wealthsimple. When I saw this box, I was immediately concerned as I had no desire to physically speak with anyone, let alone set up an appointment at a future date. However, once I completed the online investor profile, that box disappears and I was free to invest. This could cause confusion for investors, as it did for myself.
Wealthsimple Review 2018 | Wealthsimple Investment Types and Deposits
Wealthsimple offers many of the traditional accounts offered by traditional financial institutions. Investors are able to open as many accounts as they would like and can pick from the following:
Along with each account type is a simple explanation of each account type, which can be easily understood by novice investors.
Wealthsimple Review 2018 | Wealthsimple Accounts – The Details
Wealthsimple offers two different account types; Basic and Black. Basic is targeted to novice or everyday investors, while Black aims to attract high net-worth investors.
One of the reasons investors chose Robo-Advisors is because of their low fees. One of Wealthsimple’s strong points is that it requires no minimum balance for their Basic account. This is particularly appealing to investors who are just starting out or those who are just starting out and don’t have large sums of money to invest.
The company’s fee structure is very straightforward. For their Basic account, investors are charged a flat fee of 0.5%. There are no further costs to investors as there are no withdrawals, transfers, trading or rebalancing fees. The 0.5% MER is typical and in-line with other Robo-advisors in Canada.
There are no management fees for the first $5,000, investors receive a personalized portfolio and automatic rebalancing to ensure your investments stay within their targeted allocation.
Likewise, dividends are automatically reinvested and investors have the option to set up auto-depositing from their financial institutions. Finally, investors have the option of speaking with a financial expert at any time if investors require advice.
Wealthsimple’s Basic package is a no muss, no fuss investment account.
The Black account requires investors to invest 100K+ with Wealthsimple. On top of the aforementioned Basic account features, Black investors pay lower management fees to the tune of 0.4%. Furthermore, Black investors have access to additional tax features such as tax-loss harvesting and tax-efficient funds. Investors are also entitled to free financial planning sessions with Wealthsimple’s financial advisors.
Finally, Black investors also receive complimentary VIP airline lounge access to over 1000+ airline lounges worldwide across 500 cities through Priority Pass, a $400 US value. Readers looking for more info on Priority Pass can visit their website here.
The Black account does offer some nice perks and the reduced MER is attractive, but the benefit of Wealthsimple still lies with its investing simplicity. In other words, I don’t think I would join Wealthsimple because of Black but because of their other features.
Wealthsimple Review 2018 | Wealthsimple’s Web and Mobile platforms
Overall, Wealthsimple’s web-platform is slick and easy to use. The site itself is professional, clean and attractive which left me with a positive impression. The uncluttered layout makes using the website incredibly simple and doesn’t overload you with needless texts, graphics or other animations. The content itself is also relevant. On top of the portfolio-centered content, there is a Learn section with useful how-to guides, FAQs and an interesting series called Money Diaries where they talk to varying people about how money has changed their lives. I’ve read a few of them and although they have no bearing on my investing mindset, they are quite interesting.
Much like its web-platform, Wealthsimple’s mobile platform is incredibly simple and easy to use. If you don’t care for web-platforms and prefer to go mobile-only, then the Wealthsimple App is for you. The same features exist in both their app and website platform and investors lose no functionality from one to the other. It’s seamless to install and setup and much like their web application, setting up an account takes less than 5 minutes. The Wealthsimple app has a 4.3 Star rating on Google Play and a 4.5 star rating on Apple App Store.
Wealthsimple Review 2018 | Wealthsimple Security
One of the most important aspects of selecting a broker and trusting web-based organizations with your money and investments is security. The good news for investors is that your funds are covered by the Canadian Investor Protection Fund (CIPF). It is important to note that Wealthsimple does not hold your money, it has agreements with third party brokers who are themselves members of the CIPF. In such a way, your investments are insured for up to $1 million. For more information on the CIPF, feel free to click the link above.
Furthermore, the company offers secure 128-bit SSL encryption. Wealthsimple adheres to the highest industry standards in protecting your data. It also offers users the option to enable two-step verification. This is an extra level of security to keep your information and investments safe. I would actually recommend that users turn on two-step verification for any accounts for which it is made available as it serves as a failsafe in case your password is compromised. How does two-step verification work? Once users log-in, they are prompted for a code, which is sent directly to your phone via text or an authenticator app like Google Authenticator.
The final verdict on Wealthsimple
Wealthsimple is a simple, trustworthy and great way for passive investors to invest. I was very impressed by the simplicity of their platform and have no qualms about recommending their products to novice, intermediate or seasoned investors looking for an alternative to the larger brokers. If you are looking for someone else to manage your investment portfolio for some of the lowest fee’s around, then Wealthsimple is for you. Feel free to drop us a user review in the box below or drop us a comment so we know how you guys like the program!