Disclaimer: I am unaffiliated with Wealthsimple and I am only a personal user of the product.
When I started early investing I first started with Wealthsimple. What stood out to me at first was the simple and clean user experience of depositing money from your bank and straight into investing.
So what is the difference?
Wealthsimple is a robot advisor that makes investment decisions for you and all you have to do is provide your risk tolerance and money to invest. They essentially will make the asset acquisitions for you and manage your portfolio forever and all you need to do is exercise patience and watch your portfolio grow. TL;DR: investing for lazy people.
Wealthsimple Trade acts as a stock brokerage for long-term investors. Compared to Wealthsimple, you become your own advisor and get to choose from a variety of US and Canadian assets to buy. This is where you can buy some Apple, Microsoft, GameStop stock or ETFs. As of recently, you can also buy Bitcoin and other cryptocurrencies on the platform as well. TL;DR: choose and buy what you invest in including cryptocurrencies.
Sounds like good options. What are the fees?
For the following portions of this blog, I will be focusing on Wealthsimple trade as this is what I am most interested in.
The fees have been easily shown and laid out here.https://www.wealthsimple.com/en-ca/pricing/
The most attractive aspect for Wealthsimple trade is that there are no commissions on any trades and no account minimums. Compared to other brokerages, commission fees can range from 4.95 to 9.95 and more. These commission fees can eat into your profits, but you don’t have to worry about that when using Wealthsimple.
Are there any drawbacks?
Wealthsimple is very attractive from its fee structure but is far from perfect.
Deposits – Deposits can take up to 3 – 4 business days to show up in your account. This may be a problem if your itching to invest today. To offset this, you need to plan ahead when you want to invest.
Execution price – The price that is shown when viewing a stock is delayed by a couple of minutes. When you place a market order you may or may not be buying the price you currently see. This is why limit orders are important when buying a stock.
I look forward to using Wealthsimple trade to buy assets and crypto and taking advantage of the unique fee structure that is offered nowhere else today. I also see their simple website and mobile design as an advantage to new investors as it makes the investing experience least confusing than it already is.