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WealthSimple Review


WealthSimple review, brokerage rating for 2018. Is it good firm? Stock trading fees. WealthSimple RRSP, RRIF, TFSA account investment cost, minimums, and ETFs.



WealthSimple Overview


There are two types of investors. First is the active investor, who takes a hands-on approach to their portfolio and selects everything that is bought and sold. These investors typically choose a discount broker that provides them with a number of investment options they can choose from to build their portfolio.

The second type of investor is the passive investor. This investor does not believe that it is possible to beat the market, and instead decides to build a portfolio that is designed to get the market returns. In addition, they may choose to diversify among stocks, bonds, real estate, commodities etc. However, their investment product of choice is usually an index fund or ETF that will get whatever returns the overall market that they track is getting.

Coming to the forefront recently is an offering from fintech firms (financial technology companies) that strive to take this passive investing style to the next level. These firms will take client’s money, and invest passively, but in a well-researched asset allocation designed to meet the investor’s asset allocation.

While the U.S. has a few different options with M1 Finance (review) and Betterment (review) being the main robo-advisor players in the space. Canada’s options are fewer, and the most well know one is WealthSimple.

Let’s take a look in this WealthSimple review how the firm helps investors invest their money.


New Account Setup


WealthSimple is all about making things easy for the potential client. They are marketed towards people who realize they need help with their investments, and want to be as hands off as possible during the process.

They really have made the sign-up process simple. Potential clients simply click on their offer link: Get first $5,000 managed for FREE at Wealthsimple. The system then walks the investor through a process, starting with determining why they want to invest (buy a house, long-term savings, wedding, children’s education) and then a series of questions asking about their financial situation (debts, house ownership), as well as how they would react in certain market situations like a big market crash. These questions are all designed to determine the investor’s risk tolerance.

Once risk tolerance is determined, the system puts together an asset allocation which will include a mix of assets that is determined to be the right mix for that person.

This asset mix is based off of modern portfolio theory which is an academic theory on the best way to grow a portfolio in a risk managed manner. Here is what was recommended for the author when he completed the sign-up process:


Wealth Simple review


Once this step is completed, then the account type is selected (RRSP, TFSA, RESP, Cash) and the investor is taken to a screen with instructions on how to fund the newly created account.


Funding the WealthSimple Account


Once the account is created and the investor’s risk tolerance is determined, an asset allocation is chosen for the investor. The client has no additional decisions to make, other than how and when they want to fund the account. In other words, the client needs to determine how much to contribute and at what frequency.

Adding funds is very easy, and of course is all done online. Simply set-up your bank account (again, done all online) and determine the amount, schedule (every month, every two weeks, every week, or just once) and what date to start. Here is a look at what the Funding page looks like:


WealthSimple Review


Portfolio Monitoring


Clients of WealthSimple have another key page they need to be aware of. This page is the portfolio monitoring page which provides a snapshot of how the account is performing. On this page the investor will see the portfolio value, performance, and projected future portfolio value.

This screen does not provide a high degree of analysis on your portfolio. In fact, no where on this screen can the investor see where their money is invested. That can be seen on the Activity page or in the account details page.

What the portfolio page does provide is a simple snapshot of how the account is performing and what it might be worth in the future. This projected value, although it is only a projection, is a key part to the overall strategy and philosophy of robo-advisors. Investors should not concern themselves with the short-term market fluctuations that will occur. Instead they must keep the long term picture in mind; what that account will be worth in the future if they stay the course.

Here is what the portfolio page looks like:


WealthSimple Reviews


Customer Service


A huge plus for WealthSimple is their customer service. While setting up the account, the author wanted to set up two TFSA accounts – one for each child – in order to teach them about investing.

Although accounts cannot be set up for people under 18 years of age, the customer service team quickly explained that multiple accounts could be opened and even offered to take over the setup and complete the process on the backend. That made the whole account setup process very easy.


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Mobile Platform


A huge target market for WealthSimple is millennials, who are huge users of mobile technology. As a result, the company has spent some money designing a mobile app that is easy to use and intuitive. In fact, the whole process of account setup to funding to portfolio monitoring can be done on a mobile device.


WealthSimple Review 2018


The only thing that would be nice would be to be able to name the accounts something other than their account type. The author has two TFSA accounts, and it is difficult to know which one is which on the app.


WealthSimple Pricing and Fees


There are no buying and selling commissions with WealthSimple. Instead they use a percentage of assets model to earn fees based on their client’s account values.

For the first $5000 in an client’s account, there is no fee. Beyond that, the company charges a percentage of the account value, going from 0.35% to 0.50%. For example, if a client has a $150,000 account, they will pay $750 per year, applied to the account monthly.


WealthSimple Review


It is important to note that although WealthSimple does offer low management fees, it is not the only fees that investors will be paying. For each holding in their account, there will be management expense ratios that are paid to the management team running the fund that WealthSimple invests in for the investor.

For example, WealthSimple typically uses the Vanguard Total Stock Market ETF (VTI) which charges a 0.05% expense ratio. This is a very good MER, and way cheaper than most funds available, however it is an expense the investor pays as an investor in that fund.

Overall the costs are relatively low, especially for the convenience WealthSimple offers compared to using a human financial planner.


WealthSimple Pros and Cons


WealthSimple is targeted at a very specific audience. They are after the investor who is looking for a simple solution for managing their investment portfolio, and is comfortable using technology to do that.

With that in mind, let’s look at the various pros and cons of WealthSimple, which should help future clients decide if it is the right service for them.


WealthSimple Review: Pros


  • Easy to use account setup
  • Portfolio and asset allocation is done for you; little to no input required once account is setup
  • Rebalancing of the portfolio is done by the robo-advisor
  • Strong mobile app
  • Multiple account type options including RRSP, RESP, TFSA
  • Users can open multiple account types under that same email address
  • Costs are lower than using a “live” financial planner
  • No WealthSimple fees for accounts up to $5000


WealthSimple Review: Cons


  • Little to no flexibility in terms of what the investor invests in (except altering risk tolerance)
  • Not as cheap as a do-it-yourself portfolio
  • Account funding can be slow
  • Limited investment choices; they choose them so investors must use the funds they choose


WealthSimple Review Summary


WealthSimple is a great option for anyone looking for a simple way to invest some of their assets. The company has really setup a painless way to invest, doing all the work for their clients.

The company’s web based and mobile apps can both be used to set up and continually monitor accounts, including setting up funding. Funding can be an issue as it seems to take a few days for money to arrive from the client’s bank accounts.

Client’s money is invested in a well-researched and proven portfolio that has numerous academic studies behind them. This portfolio is also adjusted and rebalanced as time goes on to make sure that the proper risk profile is maintained.

Costs are reasonable for a service like this; cheaper than going to an investment professional but more expensive than simply setting up an index portfolio on your own. Given that they do the rebalancing and the record keeping, that fee may be justified if investors are truly looking for someone to do all the investment management for them.

To summarize this WealthSimple review: overall this broker offers a solid product for investors interested in a robo-advisor solution.


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WealthSimple reviewed by Brokerage-Review.com. Rating: 4.5