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Wealthsimple Review 2019

4.4 4 stars · Sep 2019

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What is Wealthsimple?

Wealthsimple logo

Wealthsimple is a Canadian robo-advisor founded in 2014. They provide its service in Canada, USA, and the UK. It is regulated by top-tier regulators, like the Canadian IIROC or the UK FCA.

For the purpose of this Wealthsimple review, we tested the Canadian Wealthsimple, although we provide information about the US and UK services as well.

 

Wealthsimple is recommended for North American and UK customers looking for user-friendly investment platforms, great funding with multiple account base currencies, and easy account opening. 

Wealtshimple Review 2019
Wealthsimple pros and cons

Pros:

  • Great investment platforms

  • CAD, USD, and GBP-based accounts

  • Easy and fast account opening

Cons:

  • High investment fees

  • Limited options to customize your investment goals

  • Slow email and telephone support

Wealtshimple Review 2019
Fees ★★☆☆☆

Wealthsimple has high investment fees for basic services, while average investment fees for premium service. As a plus, there is no deposit and withdrawal fees.

Which fees you should take into account for robo-advisors? You can see a handy summary of relevant fees here:

Robo-advisor fees explained
Definitions Description
Investment fees Robo-Service fee Fee is charged by the robo-advisor for managing the account. This fee is charged annually based on how much you have invested in a particular account. Sometimes it is called a Management fee.
Other investment fees Those fees which are not charged directly by the robo-advisor. The most important fee is the ETF management fee which depends on the ETFs the robo-advisor invests in.
Non-investment fees Other fees that are not related to investing in assets. These fees are typically those charged for your funding activities, like fees for deposit & withdrawal or FX conversion fees.

Worth mentioning is that personal advisory services, when the robo-advisor's experts advise on how to allocate the assets, have higher Robo-Service fee.

We also compared Wealthsimple's fees with two similar robo-advisors we selected, Betterment and ETFmatic. This selection is based on factors like products offered, client profile, fee structure, etc.

Let's start with the investment fees.

Investment fees 

For the better comparison of robo-advisors' Robo-Service and other investment fees, we calculated two benchmark fees, an annual fee for both basic and premium services.

We made this separation because robo-advisors usually offer multiple tiers of their service which differ in fees, minimum investment, and personal advisory. 

  • Basic service usually includes a discount or zero fees, low minimum investment, and limited personal advisory services.

  • Premium service usually includes higher fees, higher minimum investment, and an option for personal advisory.

In our benchmark calculation, we used a $30,000 account balance for basic and $100,000 for premium accounts.  

Wealthsimple has average investment fees for premium, while high fees for basic service. 

Wealthsimple annual fees benchmarked
  Wealthsimple Betterment ETFmatic
Basic service's annual fees $210 $108 $182
Premium service's annual fees $600 $510 Premium service not available

In this Wealthsimple review, we calculated the fees for Canadian accounts. These fees are the same for US accounts, while a bit higher for UK clients. For premium service, we selected Wealthsimple Black. In the table below, we summarized the Wealthsimple fee structure offered in Canada, USA, and the UK.  

Wealthsimple basic and premium fee structures
  Wealthsimple Basic Wealthsimple Black Wealthsimple Generation
Investment Amount

0-100k (CAD / $ / £)

100k+ (CAD / $ / £) 500k+ (CAD / $ / £)
Canada and the USA 0.50% Robo-Service fee + 0.20% ETF management fee

0.40% Robo-Service fee + 0.20% ETF management fee

0.40% Robo-Service fee + 0.20% ETF management fee

UK 0.70% Robo-Service fee + 0.18% ETF management fee 0.50% Robo-Service fee + 0.18% ETF management fee 0.50% Robo-Service fee + 0.18% ETF management fee

Non-investment fees

Wealthsimple has low non-investment fees. It has no account, deposit, or withdrawal fees. It is similar to its competitors.

Wealthsimple non-investment fees
  Wealthsimple Betterment ETFmatic
Account fee No No No
Deposit fee No No No
Withdrawal fee No No No

Wealtshimple Review 2019
Account opening ★★★★☆

Wealthsimple offers user-friendly and fully digital account opening. The minimum investment amount is $1 and you can choose from a lot of account types. On the negative side, the account verification took a bit longer, ~2-3 business days.

Can you open an account?

Wealthsimple offers accounts in each of the following countries: 

  • Canada
  • USA
  • UK 

Minimum investment amount

Wealthsimple’s minimum investment amount is CAD 1 / $1 / £1. It’s suitable for clients preferring investing with lower amounts. The premium accounts require a higher, $100 to $500k minimum deposit.

Account types

Wealthsimple offers three account types based on the service offered and the minimum account balance required:

  • Wealthsimple Basic: CAD 1/ $1 / £1 is the minimum deposit and your money is invested automatically, using Wealtshimple's algorithms.
  • Wealthsimple Black: CAD/$/£ 100k minimum account balance required. You’ll get a personal financial advisor and can enjoy extra features, like tax harvesting or VIP airline lounges. 
  • Wealthsimple Generation: CAD/$/£ 500k minimum account balance required. You’ll get a more personalized portfolio based on a professional team’s advice. You can also use other services, like a health plan.

There are different account types which vary in the ownership and tax advantages. The tax-advantaged account types differ by country to country. This below includes the account types in Canada:

Wealthsimple Canadian account types
Account Description
Registered Retirement Savings Plan (RRSP) An account that makes your income tax lower and you can withdraw money after you retire at a lower tax rate.
Tax-Free Savings Account (TFSA) An account, where you don’t pay taxes after the gains and you can access money any time.
Personal Taxable account, most commonly used when you want to invest extra money, but you maxed out your RRSP or TFSA accounts.
Registered Education Savings Plan (RESP) Account for a child's education which has lower tax and the government gives an extra contribution, 20% of your annual investment amount and up to CAD 7,200 lifetime value.
Registered Retirement Income Fund (RRIF)

This account is for those 71 years of age or older who would like to convert their RRSP account.

Locked-In Retirement Account (LIRA) Account for cases where you have a pension from a former employer but are not yet retired.
Joint Account An account that is owned by two or more individuals.
Corporate Account An account owned by a legal entity.

For US and UK clients, there are also options for retirement or tax-advantaged accounts. For example, IRA (traditional, ROTH, SEP) accounts are available for US clients, while UK clients can choose from ISA, pension, or JISA account types.

How to open an account

Opening an account at Wealthsimple is fairly easy and fully digital. On the negative side, the account verification is a bit slower, took ~2-3 business days.

What are the steps for account opening? 

  1. Go to wealthsimple.com and click on “Get started” 
  2. Type in your email address and password, then choose your country of residence
  3. Fill in your personal information, employment status, and insurance number 
  4. Set your goals and risks
  5. Verify your bank account by uploading a copy of that

Wealthsimple review - Account opening

Wealtshimple Review 2019
Deposit and withdrawal ★★★★☆

Wealthsimple doesn't charge fees for withdrawals or deposits, moreover, the whole process is easy and convenient. There are also three account base currencies. On the negative side, you can use only bank transfer. 

Account base currencies 

At Wealthsimple, you can choose between 3 account base currencies: CAD, USD, GBP. It equals ETFmatic’s available currencies, and it’s more than what is available at Betterment.

Base currencies at Wealthsimple vs. similar robo advisors
  Wealthsimple Betterment ETFmatic
Number of base currencies 3 1 3

Why does this matter? If you fund your robo account in the same currency as your bank account, you won't be charged a currency conversion fee

A convenient way to save on the currency conversion fees can be to open a multi-currency bank account. Revolut or Transferwise both offer bank accounts in several currencies with great currency exchange rates as well as free or cheap international bank transfers. The account opening only takes a few minutes on your phone.

Deposit fees and options

Wealthsimple does not charge deposit fees. It supports automatic deposits as well. However, you can only use bank transfer, no electronic wallets or credit/debit cards are accepted. This is similar to competitors, although ETFmatic offers credit/debit card deposits.

Deposit options
  Wealthsimple  Betterment ETFmatic
Bank transfer
Credit/Debit card
Electronic wallets 

Wealthsimple review - Deposit and Withdrawal - Deposit

Withdrawal fees and options 

Wealthsimple also does not charge withdrawal, however, the withdrawal is only available through bank transfers. It’s the same for Wealthsimple’s competitors.

You have to take in consideration, that fund withdrawals with robo-advisors take a long time, at around 6-7 business days.

Wealtshimple Review 2019
Investment platforms ★★★★★

Wealthsimple offers its services through web and mobile investment platforms. The investment platforms have a clear structure and user-friendly layouts. Both are providing two-step authentication and great reports.

Wealthsimple offers in-house developed web and mobile investment platforms. They are available only in English.

Web investment platform ★★★★★

Wealthsimple’s web investment platform is user-friendly and easy-to-use. The platform was revamped in 2019 and brought the most important information to the main portfolio screen. These design changes were meant to take the emotional aspect out of the investing process and to increase transparency at a glance of your main portfolio page.

For login, you can set a two-step verification. Just click the top right corner of the screen where your name should be. Select “Settings”, then “Security”. There you will be able to find the option to activate Two-Factor Authentication.

When it comes to the portfolio and fee reports, Wealthsimple performs great as well. You can easily see your accounts, their balances, total earnings, and your projected growth. Upon clicking a portfolio, you can set its themes and risk levels easily. You can also check each asset’s performance separately along with a full record of your activities such as withdrawals, deposits, dividends earnings, and fees paid.

Wealthsimple review - Web investment platform

Mobile investment platform ★★★★★

Wealthsimple’s mobile investment platform is available on both iOS and Android. We tested the iOS version. 

The mobile platform is considered to be a perfect copy of the web investment platform, as such it’s user-friendly, offers two-step authentication, and you can easily oversee the performance of your portfolio and the fees you paid.

Wealthsimple review - Mobile investment platform

Wealtshimple Review 2019
Product offer ★★★☆☆

With Wealthsimple, you can easily set your risk preferences and there are extra features, like socially responsible investing or halal accounts. On the negative side, we missed more personalization options, like time horizon setting, and some extra features are available only for premium accounts.

If you compare the robo-advisors, you should concentrate on the following three questions:

  • Personalization: how can you personalize your investment preferences and how many model portfolios can you choose from?
  • Asset allocation: what is the distribution of the assets the robo-advisor invest in?
  • Extra features: can you benefit from extra services, like an option for socially responsible investing or tax-harvesting?

Let's see the answers for Wealthsimple.

Personalization

When you start investing with a robo-advisor, you can usually add your investment goal, risk preference, the investment’s time horizon and target amount. Based on your inputs, the robo-advisor recommends one of their model portfolios and you can decide which one you want to go with. The robo-advisors differ in the depth of personalization and the number of available model portfolios.

Wealthsimple offers an average number of model portfolios, the level of personalization is low, however. 

  Wealthsimple Betterment ETFmatic
Number of model portfolios 30 400 21
Can you set goals/plans? No Yes No
Can you change the risk? Yes Yes Yes
Can you set the time horizon? No Yes Yes
Can you set a target amount? No Yes No

When you start compiling your portfolio, you can choose from three portfolio themes:

  • Standard - invest in assets no matter of social responsibility or compliance with Islamic law
  • Socially responsible investing - invests only in assets that satisfy the environment, social, governance factors.
  • Halal - invests only in assets that comply with Islamic law.

After you selected the portfolio theme, you can only choose from a 1 to 10 risk scale, no time horizon or target amount can be set. The 10 is the most aggressive portfolio

Wealthsimple review - Product offer

Asset allocation 

Wealthsimple's asset allocation differs from country to country and from time to time. We checked the asset allocation for Canadian clients as of 03 September 2019. 

Wealthsimple invests mainly in bonds and North American stocks. Depending on your risk settings, the distribution between stock and bond ETFs are varying.

Wealthsimple's conservative and aggressive asset allocations
  Wealthsimple conservative Wealthsimple aggressive
Government Bonds 22% 11%
Other Bonds 38% 0%
USA IL Bonds 11% 4%
Emerging Stocks 9% 16%
Foreign Stocks 6% 21%
Global Stocks 9% 11%
US Stocks 4% 27%
Canadian Stocks 2% 11%

Additional features

Wealthsimple has a wide range of additional services:

  • Tax-loss harvesting: a practice when the assets are sold and bought in order to optimize your taxes.
  • Socially Responsible Investing: a portfolio strategy that only invests in socially responsible companies and investments.
  • Halal: a specific investment type which invests in assets that also comply with Islamic Law.
  • Others: premium accounts have the option to enjoy other services, like a medical health plan or VIP airport lounge.

Wealtshimple Review 2019
Customer service ★★★☆☆

Wealthsimple has average customer service. We got relevant answers, but the speed was slow.

You can contact Wealthsimple via:

  • Email: Great responses, but we got answers within 2-3 business days.
  • Phone: We got relevant answers, but had to wait ~5 minutes until someone was connected.

Unfortunately, customer service is not 24/7. In Canada and the US, you can contact them

  • between 8:00 am to 8:00 pm EST from Monday to Thursday
  • between 8:00 am to 5:30 pm EST on Friday.

The availability of UK customer support is not provided

Wealthsimple review - Customer service

Wealtshimple Review 2019
Safety

Wealthsimple is regulated by top-tier regulators, like the Canadian IIROC or the UK FCA. It also offers a high investor protection amount. 

Is Wealthsimple regulated? Yes, it is regulated by three leading authorities throughout the world:

  • Investment Industry Regulatory Organization of Canada (IIROC)
  • Securities and Exchange Commission (SEC)
  • Financial Conduct Authority (FCA)

Wealthsimple is based in Canada, but it has branches in the USA and the UK too. It was founded in 2014. Is it safe? To be certain, it is best to check two things: how you are protected and the background of the robo-advisor.

How are you protected 

This is important: the amount of investor protection differ from regulator to regulator.

Wealthsimple legal entities
Country of clients Protection amount Regulator Legal entity
Canada CAD 1 million Investment Industry Regulatory Organization of Canada (IIROC) Wealthsimple Inc.
USA $500,000 ($250,000 cash limit) Securities and Exchange Commission (SEC) Wealthsimple US, Ltd.
UK £85,000 Financial Conduct Authority (FCA) Wealthsimple UK Ltd

Background 

Wealthsimple is quite a young company, it was established in 2014. The longer the track record of any company, the more proof we have that it has successfully survived previous financial crises. 

Being regulated by top-tier regulators and offering a high level of investor protection are all great signs for Wealthsimple's safety.

Wealtshimple Review 2019
Bottom line

Wealthsimple is a robo-advisor based in Canada with offices in the USA and the UK. 

On the plus side, Wealthsimple has great investment platforms, multiple account base currencies are offered, and account opening is fully digital and easy. 

However, the fees are average to high, the personalization of your investments are limited, and the customer service is slow.

As it is easy to open an account, and the strengths outweigh the weaknesses in most places, feel free to try Wealthsimple.

AUTHOR

Oskar Golebiowski
Oskar Golebiowski
Canadian broker expert
Oskar's goal is to bring transparency to investors in the Canadian stock brokerage market. With a bachelor’s degree in finance and over 3 years of business experience, Oskar has tested many different investing platforms in the past. His aim is to provide unbiased and honest reviews of the best tools available to Canadian investors.
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