Our Take

Toronto-based Wealthsimple, launched in September 2014, provides algorithmic investment and savings programs for clients in Canada. New clients can transfer taxable and retirement accounts or deposit funds into new accounts. The account minimum is $0, making it easy for new investors to get started. A pool of low-fee ETFs is used to populate relatively generic portfolios that are further customized by the information you put into the platform. This review is primarily written from the perspective of a Canadian investor, as Wealthsimple is no longer open to U.S. or U.K. based investors.

New and Notable Updates

• In 2022, Wealthsimple consolidated its zero-commission self-directed trading, cryptocurrency trading, chequing and savings account, and robo-advisor all into a unified app.
• Wealthsimple has committed to making its workforce more diverse, and to include more BIPOC voices. The firm publishes regular updates on its progress.
• In 2021, Wealthsimple enabled USD trading accounts for $10 a month to reduce currency conversion costs for investors on its self-directed trading platform.

Account Setup

Wealthsimple gets personal on the first screen of the account setup process. This means you can’t look at the༺ questionnaire or review portfolio allocations before giving out your date of birth, address, and social insurance number. After that, the questionnaire asks you a series of typical questions about financial goals, time horizon, risk tolerance, past investment experience, and level of investment knowledge.

Your responses are used to generate a portfolioꦡ of ETFs customized in response to the completed profile. You can change proposed allocations, but the system may ask for reasons if alterations conflict with prior responses. Accounts are funded through bank account links and can be accomplished with a one-time payment or recurring deposits.

In Canada, Wealthsimple offers a full range of accounts, including tax-free savings accounts (TFSA), 澳洲幸运5官方开奖结果体彩网:registere𒉰d retirement savings plans (RRSP), locked-in retirement accounts (LIRA), registered retirement income funds (RRIF), 澳洲幸运5官方开奖结果体彩网:registered education savings plans (RESP), first home savings accounts, and tax𝐆able accounts.

In addition to digital investment management, Wealthsimple offers a high-interest checking account, a 澳洲幸ꦏ运5官方开奖结果体彩网:self-directed trading account with stocks, ETFs, and options, and a cryptocurrency trading account꧟.

Goal Planning

Wealthsimple makes human advisors available, but only at the premium ($100,000+) and generation ($500,000+) account levels. During the setup process, new account holders are asked to choose from a goal planning list that includes home ownership, retirement, education, long-term growth, and income. Multiple goals can be created under a single account, offering greater sophistication and diversity if required. You can review transactions and relative performance statistics, sub-divided by goals, on account management pages after funding is complete. 

Account Services

Funding your Wealthsimple account is simple—log into the account management interface and request a deposit, or set up recurring deposits through a linked bank account. Withdrawals can be requested with a few clicks, but it can take up to 1🌜0 business days to receive the funds if your account has unsettled transactions. If your account is clear of transactions to settle, it can take up to three business days.

Canadian clients can also use Wealthsimple as a tax filing service in yet another step towards becoming Canada's all-in-one financial platform.

Cash Management

Wealthsimple robo-advisor accounts are intended to be fully invested, so there are no cash management features. Wealthsimple Spend and Save, the checking account offered, holds your funds with CDIC insured partner banks and has a 1.75% interest rate that increases to 2.25% at the premium level and 2.75% at the generation level. With the cash account, you can activate auto-invest features and enable stock or crypto rewards as a cashback-type feature.

Portfolio Construction

There are three possible portfolios generated after you've gone through the Wealthsimple questionnaire: conservative, balanced, and growth. Any of these three portfolios can be further altered by applying the socially responsible or Halal filters to them.

Each Wealthsimple pꦅortfolio can include eight to 10 instruments, giving the impression that most customization is done through percentage changes rather than ETF selection. The asset classes represented a🍃re:

• Canadian equities
• U.S. equities
• Global equities
• International equities
• Emerging market equities
• Government bonds
• Canadian aggregate bonds
• Canadian short-term bonds
• Gold

Investors in the premium and generation tiers can access some additional investments like private credit.

The funds are all from the usual suspects like Vanguard, iShares, Horizons, Schwab, BMO, and so on. Wealthsimple’s portfolio contents and construction are selected according to 澳洲幸运5官方开奖结果体彩网:modern portfolio theory (MPT) principles, as is the case with most robo-advisories. That said, there seems to be little to differentiate Wealthsimple’s approach from lower-capitalized rivals. The limited fund universe can still be used to create a diversified portfolio, but rivals of similar size have gone to greater lengths to build in checks against asset or geographical concentration and more robust target date functions.

Portfolio Management

Wea𓆉lthsimple manages your portfolio through tried and true market strategies that include diversification across asset classes, passive buy-and-hold investing, dividend reinvestment, and client feedback through the profile and risk scoring process. Progress toward your goals generates coaching from the system to either increase funding or stay the course. Changing the risk score associated with your profile at any time will trigger a portfolio rebalancing.

Even without a change in your profile, Wealthsimple automatically rebalances your portfolio after deposits, withdrawals, and changes in asset values. The rebalancing threshold is higher than many robo-advisors, sitting up at 30% drift. You cannot request rebalancing, nor make changes to ETFs beyond the socially responsible and Halal options. 澳洲幸运5官方开奖结果体彩网:Tax-loss harvesting is available for Wealthsimple premium and Wealthsimple generations customers, so it requires a minimum of $100,000🍨 in the account.

User Experience

Desktop

The website highlights major account features, explains the company’s philosophy, and provides a comprehensive FAQ covering most areas of interest.

Mobile

We𝓀althsimple offers an easy-to-read, mobile-ready website, and native mobile apps for iOS and Android with enhanced account management features. iPhone and many Android devices provide biometric identification, and both apps support two-factor authentication. There are no tablet-specific apps or other secondary operating systems.

Customer Service

• Email
• 24/7 virtual chatbot
• Real-time chat weekdays from 8 a.m. to 8 p.m. ET
• Phone Monday to Friday, 8 a.m. to 8 p.m. ET, and Saturday and Sunday, 9 a.m. to 5 p.m. ET

In addition to the excellent chatbot, Wealthsimple has extensive FAQs🦩 that can answer almost any query.꧒ There is priority support for clients with higher balances (premium and generation) through the app.

Security

Wealthsimple’s website uses 256-bit SSL encryption and features a clearly stated privacy policy that gives you a sense of security. Logging into account management requires two-factor authentication through a text message. Wealthsimple holds your assets with its brokerage arm, Wealthsimple Investments Inc. The broker is an Investment Industry Regulator✤y Organization of ღCanada (IIROC) dealer member and 澳洲幸运5官方开奖结果体彩网:Canadian Investor Protection Fund (CIPF) member, which covers $1 million and works similar to SIPC coverage in the United States.

Education

Wealthsimple’s website features a comprehensive Investing 101 glossary, a broad-brush investment FAQ, and an excellent monthly magazine/blog with dozens of how-to articles. The virtual chatbot is often the fastest way to navigate content. In addition, many of the tutorials lack the quantitative tools needed to help you with short-term goal planning and long-term financial planning. There are some calculators and ꧙content organized around themes like retirement.

Commissions and Fees

Wealthsimple’s 0.50% fee includes all investment advice, portfolio management, and trading costs. The fee drops to 0.40% for accounts at and above $100,000 (premium) and can drop as low as 0.20% for generation accounts ($500,000 and up). The management expense ratios (MER) on the underlying funds vary by portfolio, with the basic running 0.12% to 0.15% and SRI and Halal up over 0.20% on average.

• Monthly cost to manage a $5,000 portfolio: $2.08
• Monthly cost to manage a $25,000 portfolio: $10.42
• Monthly cost to manage a $100,000 portfolio: $33.33

Final Verdict

Wealthsimple offers a good fit for investors of all🌠 ages looking to save money and take the next step on the road to long-term financial security. The fees are slightly higher than average for the robo-advisory space, though the account minimum of $0 removes a hurdle for investors who are just starting out. Conversely, lower management fees and more robust features on accountsꦆ at and above $100,000 could attract the interest of higher-net-worth individuals.

Overall, the approach Wealthsimple takes in constructing and managing your portfolio is not revolutionary. The portfolio is built with plain vanilla MPT with limited customization beyond the socially responsible and Halal options. This lack of customization is compounded by a small fund list coཧmpared to the larger selection available through U.S. competitors. Wealthsimple employs basic buy-and-hold diversified across assets with rebalancing and tax-loss harvesting as needed, and this approach doe🉐s have a history of success in the market that most individual investors fail to match. That said, Wealthsimple may not be the best fit if you are looking for a portfolio that is customizable at the asset level. If you appreciate the simplicity and want to have a hands-off portfolio, however, then Wealthsimple’s approach may be just right.