As of spring 2022, the AUM (assets under management) have been valued at $15 billion, and its online investment management tools have won multiple awards. In March 2019, Wealthsimple introduced Wealthsimple Trade, a self-directed investment platform. It immediately attracted lots of attention for its ability to allow Canadians to buy and sell individual stocks and ETFs (exchange-traded funds) with zero commission fees. About a year-and-a-half later, Wealthsimple made another splash when it added cryptocurrencies to its Trade offerings.
Wondering if Wealthsimple Trade is right for you? Here, we present the pros and cons of Wealthsimple Trade, as well as take a deeper dive into its features. Read on for how it works and the cost structure, so you can decide for yourself.
Wealthsimple Trade pros and cons
The pros
- Wealthsimple Trade was one of the first commission-free trading platforms in Canada. Most of its competitors charge a minimum of $4.95 and up to $9.95 (or more) per trade.
- There are no annual account fees or account minimums.
- You get free access to thousands of stocks and ETFs listed on North America’s largest exchanges, such as the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX). Plus, it also offers dozens of cryptocurrencies, including bitcoin and ethereum, too.
- You can purchase fractional shares in companies such as Microsoft, Netflix, Tesla, Shopify, Royal Bank of Canada, Toronto Dominion Bank, and the Canadian National Railway Co. With fractional shares, you can own a piece of these companies even if you don’t have a lot of money to invest.
- You can open tax free savings accounts (TFSAs) and registered retirement savings plans (RRSPs) as well as non-registered accounts. (Cryptocurrencies must be held in a non-registered account as they are not TFSA or RRSP eligible)
- You can deposit up to $1,500 instantly to begin trading right away.
- Real-time, on-demand quotes and unlimited price alerts are now free to all Wealthsimple Trade clients.
- The Wealthsimple Trade app is attractive, clean and intuitive; even first-time investors will find it easy to use. The “browse” feature on the app sorts trending stocks by different markets and categories. There is also now an online platform for users who prefer to trade on their laptop or desktop rather than a mobile device.
- Wealthsimple is a trustworthy financial brand. As mentioned above, its assets under management are currently valued at $15 billion, and it has an estimated 2 million customers. Wealthsimple is also regulated by the IIROC (Investment Industry Regulatory Organization of Canada) and the CIPF (Canadian Investor Protection Fund)—just like the big banks.
The cons
- Currently, Wealthsimple Trade is exclusively for the trading of stocks, ETFs and select cryptocurrencies. Other activities, such as trading mutual funds or purchasing IPOs, are not available.
- Looking into buying U.S. stocks? Know that you won’t be able to avoid foreign exchange fees in the basic no-fee account, since you can’t leverage “Norbert’s gambit” or hold U.S. dollars. To hold U.S. investments in U.S. currency without the worry of foreign exchange fees, you’ll need to subscribe to the Trade Plus plan, which costs $10 a month.
- There is a lack of in-depth investment analytics and educational tools, which can make things harder on some newbie investors.
- Be warned if you’re in a hurry to access your funds. New deposits in excess of $1,500 (or over $5,000, if you subscribe to the Trade Plus plan) may take up to three business days to process. And users can’t automate recurring deposits.
- The platform also doesn’t allow users to automate dividend reinvestments. Having said that, it’s easy to do so manually. That’s because dividends are simply added to your cash funds, which you can then use to buy more shares, including fractional shares, in just a few clicks.
Is Wealthsimple Trade good?
Whether you’re a first-time investor or a seasoned one—passive or active—Wealthsimple Trade is the simplest, most inexpensive tool available for buying and selling Canadian stocks and ETFs. For those with more heavily diversified investment interests (such as bonds, international equities or precious metals), Questrade or another online brokerage may be a better alternative. Same goes for those who need access to trading tools and analytics
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Creating a Wealthsimple Trade account
Whether you’re signing up on your phone or computer, it’s very simple and it takes just a few minutes. Enter your email address and a password of your choosing. If you already have a Wealthsimple account, just use your existing login info. Then the app/site will guide you through the rest. You have the option of creating an unregistered account, a TFSA and/or an RRSP. Unfortunately, you can’t open registered retirement income fund (RRIF) or locked-in retirement account (LIRA) accounts with Wealthsimple Trade.)
How to add funds
If you’ve ever used PayPal or done an Interac e-Transfer, you’ll find this just as easy. You link your bank account to your Wealthsimple Trade account and input the amount you want to move (up to $50,000 per transfer).
As mentioned above in the “cons” section, it can take up to three business days to process large deposits, and there’s no feature to automate your deposits. So you’ll want to manually set calendar reminders/notifications if you want to regularly set up deposits to benefit from dollar-cost averaging.
On the plus side, if you want to move money from one Wealthsimple platform to another—say, from Wealthsimple Invest to Wealthsimple Trade—there’s now an automated feature for this. You’ll need to transfer your investment funds in the form of cash, however.
