Wealthsimple Self-Directed Investing Review

Our Take

Canadian online broker Wealthsimple has just completed its first decade, but it has become one of the top online investing platforms for investors in Canada, with over $30 billion in assets under administration. Wealthsimple is best for new to average-experienced passive investors who prefer automated or self-directed investing with smart technology platforms. What Wealthsimple does well is make complex investing processes effortless and clear, and it provides affordable financial solutions for its customers.

Wealthsimple was the first online broker in Canada to offer commission-free stocks and ETFs. Wealthsimple focuses on providing online access for investors to trade without having to physically go to a branch. Due to the limited number of financial tools and platforms, Wealthsimple may not be the best option for active traders. Similarly, Wealthsimple may not be the best fit for experienced and active traders who want to have access to a robust mobile app that has a full array of comprehensive features.

Wealthsimple is more of a financial technology company than a traditional broker and is steadily adding more bank-like features, like high-interest cash accounts and mortgages. We'll dig deeper into the details to see if Wealthsimple's self-directed trading is a fit for your portfolio. In addition to Wealthsimple's online broker platform, we've also reviewed Wealthsimple's robo-advisor.

Introduction

Wealthsimple was formed in 2014 by Michael Katchen, Brett Huneycutt, Som Seif, and Rudy Adler in Toronto. Wealthsimple’s mission is to help everyone achieve financial freedom, no matter who they are or how much money they have. Its superpower is providing uncomplicated, digital financial resources and tools to help customers easily manage their finances. 

On March 4, 2021, Wealthsimple reported that it had sold its American accounts to Betterment. The transaction was completed and the American accounts were transferred in the second quarter of 2021. During the first quarter of 2022, Wealthsimple sold and transferred its United Kingdom accounts. The company is putting more focus on the Canadian market.

In Canada, Wealthsimple has become one of the most popular online brokers, especially for new investors and passive investors. Wealthsimple has 3 million clients in Canada and has more than $30 billion in assets under administration, according to the firm's website. It was also the first regulated cryptocurrency broker in Canada and continues to roll out new and enhanced features and services. 

Pros & Cons

Pros Explained 

• Commission-free stock and ETF trades: Wealthsimple offers commission-free stocks and ETFs. However, there are other fees such as a 1.5% currency conversion fee in Wealthsimple self-directed investing. Customers can upgrade their Wealthsimple self-directed accounts to the no-conversion-fee version for $10 a month. The fee for broker-assisted trades is $45. 
• Competitive option for new investors: Wealthsimple is seen as a competitive option for new investors because of the simplicity of the platforms and tools on the website, the digital investment advisor, and the educational resources such as Investing Master Class, Personal Finance 101, and an online retirement calculator. The Investing Master Class includes 10 short videos that discuss various topics such as the stock market, investing 101, and determining how much money you need to retire. 
• Automated investing platform: Wealthsimple offers an automated investing platform called Wealthsimple Managed Investing, which uses a robo-advisor. Customers can develop a portfolio based on their specific goals, needs, risk tolerance, and more, and the portfolio is managed by the robo-advisor, including rebalancing. 
• Fractional stock trading: Wealthsimple offers fractional stock trading. However, customers cannot make fractional dividend reinvestments. 

Cons Explained 

• Limited platforms and tools: Wealthsimple offers a limited number of platforms and tools. Wealthsimple Self-Directed Investing, Wealthsimple Managed Investing, and Wealthsimple Crypto are the only trading platforms that Wealthsimple offers. However, Wealthsimple Crypto is only available through the Wealthsimple Trade app. The platforms don't offer much in the way of market news, advanced features, customizable screening, research options, and more.
• No protection for crypto assets: Wealthsimple makes customers aware of the risk of purchasing crypto assets. However, Wealthsimple states that its custodial partners help protect crypto assets from a breach, hack, fraud, or theft. 
• Wealthsimple Self-Directed Investing and Wealthsimple Managed Investing aren’t synced: Customers must open an account in each platform, and customers cannot transfer funds between the two accounts. 

Usability

In the 10 years that Wealthsimple has been in existence, it has become one of the top online brokers and largest robo-advisors in Canada. The company’s focus is on making sure people have access to financial tools and information without it being overly complicated and expensive. The Wealthsimple website is simple to use and easy to navigate. Before you can set up an account, you have to create a profile on the sign-up page on the website. Wealthsimple tools and resources are available on both the website and mobile platforms.

Wealthsimple’s platforms include:

• Wealthsimple website
• Wealthsimple mobile app (available for iOS and Android)
• Wealthsimple Self-Directed Investing, a self-directed trading platform (available on the website and app)
• Wealthsimple Managed Investing, an automated trading platform that uses a robo-advisor (available on the website and app)
• Wealthsimple Crypto, a platform to buy and sell crypto assets (only accessible in the Wealthsimple app)

Trade Experience

Wealthsimple’s website and app platforms are not as robust as some competitors’ platforms. They provide simple financial platforms and tools that an investor at any level can comprehend. If you are an active trader desiring more advanced features and tools, you may want to consider other options. Wealthsimple uses innovative technology, such as automated investing using robo-advisors, which may appeal to new investors and passive investors.

Wealthsimple offers customers three plans in its Wealthsimple self-directed platform, but they are based on account value. The plans are Core, Premium ($100,000 in assets), and Generation ($500,000). If you are on the free account, a USD account is $10 monthly and options cost $2 USD a contract. The other two plans drop the cost of options to $0.75, and the USD account is free. Wealthsimple does not offer an idea generator tool, and there are limited analysis tools. Customers do have access to a charting tool on both the mobile and website platforms.

The charting tool has limited features and may be perfect for new investors and investors who may not need a lot of analysis data to keep track of their investments. The charting tool does not have a drawing tool, and a line chart is the only chart type. However, customers can change the available timeframes to get an idea of investment performance at various time intervals. 

Mobile Trade Experience

Wealthsimple’s app handles all the different Wealthsimple accounts. The features in the app are limited in comparison to the features that some of Wealthsimple's competitors’ apps have. Customers are required to use biometric logins to access their accounts in the Wealthsimple app.

Investors are provided with real-time stock quotes in the mobile app and have the same types of orders that are available on the website platform. These are market orders, stop-limit orders, limit orders, and other fractional orders. There is a charting tool in the mobile app, but it does not have a drawing tool. Customers can select from various timeframes, which is the only customization feature. A line chart is the only chart type available.

The screeners have limited features and no technical indicators, and they cannot be customized. You can create a watchlist for stocks, ETFs, or cryptocurrencies to help you track each investment. You can only create one watchlist at a time, not multiple watchlists. In the watchlist, you can see an investment’s performance at various time intervals, statistics about the investment, news about the investment, and which categories the investment falls into.  

Range of Offerings

As an online discount broker, Wealthsimple doesn’t have a wide range of offerings. Wealthsimple does not offer mutual funds, futures, or fixed income.

Wealthsimple’s offerings include:

• Stocks (Canadian and U.S.-based stocks)
• Exchange-traded funds (ETFs)
• Penny stocks
• Options
• Cryptocurrencies (50+ various cryptocurrencies available) 
• Fractional shares (stocks and ETFs)
• Automated investing through Wealthsimple Managed Investing (uses robo-advisor)
• Halal investments (ETFs that comply with Islamic law) 

Order Types

Wealthsimple offers only four order types. They are market orders, stop-limit orders, limit orders, and other fractional orders. The order types are available on both the Wealthsimple website and app. The company doesn’t offer complex conditional orders nor the ability to stage orders for later entry. Wealthsimple keeps it basic when it comes to orders and clearly is aimed at a buy-and-hold investor more than an active trader.  

Trading Technology

Wealthsimple complies with Investment Industry Regulatory Organization of Canada (IIROC) rules. Part of the compliance is to have quality order execution policies and procedures in place and disclose this information to customers. This includes order handling and routing, order types, technical issues, conflicts of interest that pertain to execution, and foreign-regulated markets. This also includes factors such as investment prices, execution speed, execution assurance, transaction costs, and market conditions. 

Costs 

Wealthsimple discloses all fees and costs for its products and services in the legal section of its website. Wealthsimple does not have the lowest investment management fees in comparison to U.S. online brokers, but its no-commission stock and ETF trading make it competitive for Canada—a country where trading commissions are still quite common. 

• No commissions for Canadian and U.S.-based stocks and ETFs
• Currency conversion: Under the Core plan, customers pay a 1.5% currency conversion fee when trading American stocks and converting between Canadian dollars (CAD) and U.S. dollars (USD). Under the Premium or Generation plan, customers can trade stocks and ETFs in USD using a USD currency account to avoid the conversion fee. Core plan members need to pay $10/month for the USD account.
• No fees or minimums required to open or close an account
• No fees for inactive accounts or outgoing account transfers 
• $45 fee for broker-assisted trades
• Wealthsimple charges investment management fees for assets under management, including digitally managed portfolios in Wealthsimple Managed Investing. For portfolios that are under $99,999, the fee is 0.50%. For portfolios that are above $100,000, the fee is 0.40%.

How This Broker Makes Money From You and for You

Wealthsimple is an online discount broker whose mission is to provide affordable financial solutions to everyone. Even though several products and services have no minimums, no service fees, and no commission fees, the company still must make money in some way.

• Management fee: Wealthsimple receives a management fee for the portfolios that it manages for customers. It receives a fee of 0.50% for portfolios with a balance under $99,999 and a fee of 0.40% for portfolios with a balance over $100,000. These fees are also assessed for the tax-free savings account (TFSA), registered retirement savings plan (RRSP), registered education savings plan (RESP), and locked-in retirement account (LIRA).
• Currency conversion fee: Wealthsimple charges this fee when Canadian investors trade American investments. The fee is different for each account plan. Under the Core plan, customers will pay a 1.5% currency conversion fee when trading American stocks and converting between Canadian dollars (CAD) and United States dollars (USD).
• Wealthsimple USD account fee: Wealthsimple charges customers a fee of $10 a month for a USD account in the Core plan, which allows investors to avoid the conversion fee.
• Payment for order flow: Payment for order flow is banned in Canada. This is a fact that is commonly brought up as an argument as to why trading commissions persist. 
• Interest on cash balances: Wealthsimple doesn’t pay interest on idle cash or sweep it into a money market fund. For Wealthsimple Managed Investing, all funds are put into the market. Wealthsimple Self-Directed cash balances are not eligible for interest, although the broker is presumably able to earn some. Wealthsimple has a separate cash account that does pay interest, currently sitting at 4%.

Account and Research Amenities 

Simplicity is the focus of Wealthsimple. It does offer various services and support for its customers, but the number of offerings is not as robust as some of its competitors, who have been around longer. Unfortunately, Wealthsimple lacks in the area of research. It does not offer proprietary research or third-party research to customers, nor daily market research reports. Also, it doesn’t offer trading idea generator tools.  

Stock Screener

Wealthsimple’s customers have access to screeners for socially responsible investments (SRIs) (including ESG investments), stocks, and ETFs. However, customers cannot build or customize their own screens, which also means they can’t save customized screens for later use. Investments cannot be screened based on technical indicators. 

Customers can create a watchlist for stocks, ETFs, or cryptocurrencies to help them keep track of each investment. Upon creating a watchlist, customers have access to different details about the investment such as the investment’s performance at various time intervals, statistics about the investment, news about the investment, and which categories the investment falls into. 

ETF and Mutual Fund Screener

Wealthsimple has a limited number of ETFs that are available to customers and does not offer mutual funds. Wealthsimple’s ETF screener has limited features. Customers cannot build or customize their own ETF screens, which also means they can’t save customized screens for later use. ETFs cannot be screened based on technical indicators. 

Customers can create a watchlist for ETFs to help them keep track of each ETF. Upon creating a watchlist, customers have access to different details about the ETF, such as the ETF’s performance at various time intervals, statistics about the ETF, news about the ETF, and which categories the ETF falls into.

Options Screener

Wealthsimple does not have an options screener. 

Fixed Income Screener

Wealthsimple does not offer fixed income securities and therefore does not have a fixed income screener. 

Tools and Calculators

Tools and calculators are limited in Wealthsimple’s platforms. It provides four free online calculators including a TFSA calculator, an RRSP calculator, an income tax calculator, and a Canadian retirement calculator. There are no detailed portfolio or market analysis tools. 

In the Wealthsimple app, customers can receive price alerts and stock news. Customers have access to a very limited charting tool in Wealthsimple Self-Directed Investing. The charting tool is available on both the website and app platforms. Wealthsimple Trade has a limited watchlist feature. Customers can only create one watchlist at a time or select from predefined watchlists. 

Charting

Wealthsimple Self-Directed Investing has a limited charting feature. The charting tool is available on both the website and mobile app. There are no drawing tools, and the only customization option is a selection of various timeframes. There is a default line chart but no other chart types. 

Trading Idea Generators

Wealthsimple does not offer any trading idea generators. 

News

When customers create a watchlist for a stock, they have access to news about the stock. Customers have access to stock news and price alerts in the Wealthsimple app.  However, Wealthsimple does not provide major headline financial news on its platforms for customers to access. Wealthsimple does have a separate news section in its online Wealthsimple Magazine where it announces new products and services and other important company news. Wealthsimple also publishes a popular free financial newsletter, TLDR.

Third-Party Research

Wealthsimple does not offer customers access to third-party research. 

Cash Management

There is no sweep on uninvested funds or interest paid on cash balances with Wealthsimple Self-Directed Investing. Wealthsimple does offer a cash management option for customers called Wealthsimple Cash. Wealthsimple Cash includes a digital and physical Wealthsimple card and has no fees and account minimums, and customers can easily send and receive funds from their accounts. Customers can manage the card’s features in the Wealthsimple app. Customers earn 1% back in cash, crypto, or stock when they use the card. Wealthsimple Cash customers earn 4% in interest with just $1 in assets, going up to 5% interest for Generation customers.

Fractional Dividend Reinvestment Plan (DRIP)

Wealthsimple does not offer dividend reinvestment plans.

SRI/ESG Research Amenities

Wealthsimple does not provide customers access to any proprietary or third-party research tools. Customers who prefer a managed portfolio can use Wealthsimple Managed Investing, which is an automated investing platform that uses a robo-advisor. The robo-advisor does the research for the customer. Wealthsimple’s standard SRI and ESG portfolios contain companies that have at least three women on their board of directors and companies with the lowest carbon emissions in each industry. Wealthsimple also offers a Halal portfolio that complies with Islamic law. 

In Canada, Wealthsimple is a top choice for those wanting to trade socially responsible investments (SRI) and Halal investments. 

Portfolio Analysis

Wealthsimple has limited analysis tools in its platforms. The Wealthsimple Invest platform has a digital investment manager that does portfolio analysis, but only for managed portfolios. Wealthsimple has four free online calculators that customers can use for analysis purposes. 

Wealthsimple offers a complimentary portfolio review for non-Wealthsimple customers. If you have a portfolio that has a minimum balance of $50,000, a Wealthsimple advisor will review your portfolio to help you decide if a Wealthsimple managed portfolio better suits your goals and needs. 

Education

Wealthsimple’s limited educational resources are designed not to overwhelm new investors. There is plenty of foundational education to help new investors learn the basics. Experienced investors and active traders will find the educational resources shallow, but the platform itself isn’t set up for even intermediate trading strategies like multi-asset position trading.

Wealthsimple provides various tips, advice, articles, and podcasts and has a YouTube channel. It also has Wealthsimple Magazine, which is on its website. Wealthsimple provides a free Canadian retirement calculator on its website.

There are two main educational resources:

• Personal Finance 101, personal finance videos, articles, and guides
• Investing Master Class, 10 short videos on various financial topics such as stock market and investing 101

Wealthsimple also publishes the popular finance e-newsletter, TLDR.

Customer Service

• Customer service is available by phone, chat, and email. Customer service is available 24/7 through email or chat (with a virtual assistant). You can only speak with a live person through chat during normal business hours, seven days a week. 
• You can speak with customer service by phone during normal business hours, seven days a week.
• Wealthsimple has a help center on its website where you can find answers to common questions.
• Some product pages have an FAQ section at the bottom of the page.
• Customers can complete broker-assisted trades by phone. There is a fee of $45 for this service.

Security and Reliability

• Wealthsimple offers biometric logins on the Wealthsimple app.
• Customers’ investing accounts are protected by the Canadian Investor Protection Fund (CIPF).
• Wealthsimple Cash accounts are insured by the Canada Deposit Insurance Corporation (CDIC). In Canada, cash accounts are insured by the CDIC up to $100,000. Wealthsimple spreads its cash holdings among multiple CIDC members to increase this eligible coverage up to $500,000 per account. 
• Wealthsimple is the first regulated crypto broker in Canada. Crypto assets are not protected. However, Wealthsimple states that its custodian, Gemini, Inc., has a commercial criminal insurance policy of up to $200 million to insure against stolen crypto assets as a result of a breach, hack, fraud, or theft.
• Wealthsimple provides two-factor authentication on its website and in the Wealthsimple app. All customers are required to use two-factor authentication.
• Wealthsimple provides encryption to protect customers’ data.
• Wealthsimple complies with industry standards and keeps its security policies and procedures updated consistently. 

Transparency

Wealthsimple has a legal section on its website that contains various disclosures. Wealthsimple provides clear details on its pricing structures and fees.

Available Account Types

Wealthsimple is focused on the Canadian market, so it offers the standard fare for Canadian brokers.

This includes:

• Individual brokerage account
• Business brokerage account
• Tax-free savings account (TFSA)
• Registered retirement savings plan (RRSP)
• Spousal RRSP
• Registered education savings plan (RESP)
• Locked-in retirement account (LIRA)

The Bottom Line

Passive investors will find a lot to like at Wealthsimple. New investors will not be overwhelmed by the amount of educational content provided on Wealthsimple’s mobile and web platforms, but it does the job of easing you into investing. The digital investment management route is the most passive solution and, while not as full-featured or cheap as its U.S.-based competition, gets the job done with diversification and automated rebalancing. The Wealthsimple self-directed investing platform is harder to classify. 

Wealthsimple’s trading platforms, tools, educational resources, and research are limited. Depending on the type of investor and their goals, what Wealthsimple provides may or may not be enough. If you are a DIY investor looking to keep costs down and are mainly looking to buy and hold rather than trade, then Wealthsimple Self-Directed Investing's $0 commissions offset some of what the platform lacks. This is especially true considering the overall lack of commission-free trading in Canada.

That said, active traders and experienced investors who are seeking more robust and detailed analysis tools, research tools, and educational resources will need to consider other options. For Canadians, that likely means another Canadian brokerage like Questrade or a bank-affiliated broker—or, better yet, Interactive Brokers also serves the Canadian market with its powerful trading platform. 

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