Our Take: Due to its low costs, diverse investment options and overall ease of use, we think Wealthsimple Trade is the best self-directed online brokerage platform in Canada.
Pros and Cons of Wealthsimple Trade
|Pros of Wealthsimple Trade||Cons of Wealthsimple Trade|
|No Commission Fees||Desktop Platform Can be Glitchy|
|Investors Can Buy Fractional Shares||Deposits Can Take Up to 3 Days to Process|
|No Minimum Balance Requirements||No Margin Account Offering|
|Beginner Friendly App and Desktop Platform||Currency Conversion Fees|
|Investors Can Trade within TFSAs and RRSPs||Not Able to Short Stocks|
|Access to the Crypto Markets||No RESP Account Offering|
Wealthsimple Trade Pros and Cons Explained
Where Wealthsimple Trade Shines
No Commission Fees – Most online brokerages, such as Questrade, have trading fees which get charged to an investor every time they buy stocks. Not Wealthsimple Trade though.
Wealthsimple Trade’s claim to fame from the very beginning has been that they are a commission free stock trading platform.
Investors Can Buy Fractional Shares – One of the most underrated features of Wealthsimple Trade is that they offer fractional shares. In my opinion, this is something that isn’t talked about nearly enough.
If you’re like most new investors, you don’t have thousands of dollars to invest when you’re first starting out, which, on most platforms, will automatically exclude you from buying high priced stocks like Amazon or Tesla.
Wealthsimple Trade however offers whats called Fractional Trading.
This gives investors the ability to buy small fractions of stocks. For example, if you wanted to invest into Tesla, but you didn’t want to spend $805 USD on an entire share, then you could just buy, as an example, 10% of a Tesla share for $80.50.
Not only does this help young investors invest in companies they might not be able to if they had to buy an entire share, but it can also help you more easily diversify your investments.
No Minimum Deposit Required – Unlike a lot of online stock brokerages, Wealthsimple Trade doesn’t have any minimum deposit requirements when you get started. You can start with as little as $1 and buy a fractional share if you really wanted to.
One of Wealthsimple Trade’s competitors, Questrade, requires a $1,000 minimum deposit before you can start trading on their platform, so Wealthsimple Trade not requiring a minimum deposit is not something we should take for granted. Because let’s be honest, $1,000 is a lot of money and could be a big barrier for someone who wants to get started with investing but doesn’t have that much to begin with.
Bravo Wealthsimple Trade, Bravo.
Beginner Friendly App and Desktop Platform – Wealthsimple Trade was built for the masses, and not for the elite Warren Buffett type investors.
For this reason, both the app and desktop version of Wealthsimple Trade is very user friendly. Not only is it SUPER easy to navigate, even for beginners, but as you can see from my short video below (actually buying $10 worth of Tesla stock) the overall design of the trading platform is very sleek and modern – which I for one appreciate!
While I wouldn’t consider myself a beginner, I still don’t want to look a small numbers on big spreadsheets, with dark backgrounds and ugly graphs like you see in the Wall Street movies. So as a Wealthsimple Trade user, the overall design and feel of their platform is just something I really love.
Investors Can Trade within TFSAs and RRSPs – Wealthsimple Trade doesn’t just offer personal trading accounts for Canadian investors to invest in, but they also allow users to open up their trading account as a TFSA or an RRSP.
For me personally, I have a TFSA open with Wealthsimple Trade and I love it. The sign up process takes less than 30 minutes start to finish and it’s super easy.
So if you plan to start investing and you don’t have a TFSA or RRSP open yet, look no further than Wealthsimple Trade.
Access to the Crypto Markets – If you open up a Wealthsimple Trade account, you’ll get full access to Wealthsimple’s crypto platform too. So if you wanted to get your feet wet with investing in something like Bitcoin or Ethereum, it’s literally as easy as going in and buying a stock.
You don’t need a new app, you don’t need to sign up for anything else, you just get full access to the entire platform by having a Wealthsimple Trade account.
And then the great thing about this is that your investments are all under one roof. You don’t have to manage 2 different platforms, it’s all consolidated for you. No other Canadian brokerage has this capability and it’s honestly something that I don’t think is talked about enough.
If I didn’t already have an account with Wealthsimple Trade, this feature alone would be enough to persuade me.
Where Wealthsimple Trade Falls Short
Desktop Platform Can be Glitchy – As I mentioned above, the Wealthsimple desktop platform is sleek, but if I’m being 100% transparent, it can be glitchy sometimes. As someone who uses the app more then the desktop platform, this isn’t a huge deal, but the few times I do go on my account through the desktop, I have noticed that it is noticeably slower and updates can take longer to process.
Deposits Can Take Up to 3 Days to Process – Depending on how much money you plan to deposit into your Wealthsimple Trade account, deposits can sometimes take 3 days to process if you are depositing over $1,500.
If you deposit less than $1,500 then you’ll actually get these funds instantly, but if you plan on depositing thousands of dollars all at once, you can expect to wait a few days until your funds are available to trade. For me, this isn’t a huge deal, because I usually only deposit a few hundred dollars every few weeks, so I never reach that $1,500 max.
Additionally, you can set up automated deposits each month that will automatically transfer funds from your bank into your Wealthsimple Trade account. Auto deposits usually take 3-5 days from your auto deposit date, so if you want to be able to trade your funds on the 15th of every month, setup your auto deposit day for the 10th.
No Margin Account Offering – Unlike its competitors such as Questrade, Wealthsimple Trade actually doesn’t offer margin accounts to its investors.
If you are new to investing, you might not even know what a margin account is, which isn’t necessarily a bad thing as there is a lot of risk associated with buying on margin.
Buying on margin is where investors borrow money from their brokerage to invest with. This gives investors more buying power to invest in more stocks. While this can be great if things go well, if your investments done pan out the way you thought they would, well now your in debt.
So if you’re a beginner investor, I wouldn’t factor this con into my decision making process too much, as again, it’s not something I’d recommend new investors take advantage of anyway. However, if you are used to trading on margin and are more of a savy, experienced investor, well then you’ll definitely want to keep this in mind before opening up an account.
Currency Conversion Fees – Although Wealthsimple Trade doesn’t charge commission fees when investors purchase stock, they do charge what’s called a currency conversion fee (1.5%) when buying and selling US stocks.
I wouldn’t say this is a hidden fee as they don’t try to hide it, but it’s something that some investors aren’t aware of because when they read commission free trading, they automatically assume it comes at no cost, which isn’t necessarily the case.
Wealthsimple Trade’s 1.5% currency conversion fee is charged every time you buy and sell US stocks. For a complete overview on how this fee is calculated, check out my breakdown below:
How to Calculate Wealthsimple Trade’s Currency Conversion Fee
Step #1 – Determine the total price of your investment in USD.
Step #2 – Google the Current USD to CDN exchange rate.
Step #3 – Multiply the current exchange rate by 1.5%.
Step #4 – Multiply the number you get in Step #3 by the total price of your investment in USD (from Step #1).
Step #5 – Multiply the current USD to CDN exchange rate by your total price of investment in USD (from Step #1).
Step #6 – Subtract the number your get in Step #5 from the number you get in Step #4.
Step #7 – This is the conversion fee you will pay. It will automatically be included in your total cost of order.
With that said, in early 2022, Wealthsimple Trade came out with a premium account called Wealthsimple Trade Plus. This plan comes with a USD account so you actually don’t have to pay a conversion fee when buying and selling US stocks. But will talk about that more later.
Not Able to Short Stocks – If you are an experienced investor who likes to short stocks (bet against them), this is likely going to be one of the biggest downsides of Wealthsimple Trade.
As Wealthsimple Trade was built and designed to appeal to the Canadian masses, it doesn’t support some advanced investing strategies like short selling.
If you aren’t familiar with short selling, it’s basically just when an investor bets against a stock from rising. So if the stock goes down in value, the short seller would actually make money. Similar to trading on margin, shorting stocks is very (very, very) risky, and it’s not something I’d recommend, even for some more experienced investors.
No RESP Account Offering – Unlike some of Wealthsimple’s competitors, the Wealthsimple Trade platform does not support investors opening RESPs.
An RESP (Retirement Education Savings Plan) is a Canadian registred investment account, similar to an RRSP or TFSA, that parents can open for their children to help get a jump start on saving for their education.
Key Takeaways of Wealthsimple Trade
- Wealthsimple Trade is great for new investors. The platform was built, designed and created for beginner investors and NOT those looking to take part in advanced and highly technical trading activity.
- What truly separates Wealthsimple Trade from its Canadian competitors is that they offer fractional shares and direct access into the crypto markets.
- Remember that although Wealthsimple Trade doesn’t charge its user commission fees when buying and selling stocks and ETFs, they do charge currency conversion fees for all US listed equities.
Who Should Really Use Wealthsimple Trade Though?
If you are wondering if you should use Wealthsimple Trade or not, to be honest I’m not really sure because I don’t know you, and everyone is different.
And while I personally use and love Wealthsimple for myself, we aren’t the same person and you might have different needs when it comes to what you want in an online brokerage account.
So while I can’t say for sure if YOU should use Wealthsimple Trade, what I can do is tell you the type of investor Wealthsimple Trade is perfect for.
6 Reasons Why You Should Use Wealthsimple Trade
- You Should Use Wealthsimple Trade if…you are new to investing and want a user friendly platform (both mobile and desktop) to get started with.
- You Should Use Wealthsimple Trade if…you only have a few hundred dollars (or less) to start your investing journey with.
- You Should Use Wealthsimple Trade if…you plan to buy and hold stocks for the long term.
- You Should Use Wealthsimple Trade if…you like being able to check and monitor your performance on a mobile device.
- You Should Use Wealthsimple Trade if…you’ve ever wondered or been curious about investing in crypto currencies like Bitcoin, Ethereum, Dogecoin, etc.
- You Should Use Wealthsimple Trade if…you want to invest within a registered investment account like an RRSP or TFSA.
5 Reasons Why Wealthsimple Trade Might Not be For You
- Wealthsimple Trade Might Not be For You if… you want to use borrowed money to invest with (trade on margin).
- Wealthsimple Trade Might Not be For You if…you want to bet against stocks rising in price (shorting stocks).
- Wealthsimple Trade Might Not be For You if…you need advanced financial charts and technical analysis on all stocks before buying them.
- Wealthsimple Trade Might Not be For You if…you want to buy stocks from companies not listed on North American stock exchanges.
- Wealthsimple Trade Might Not be For You if…you plan on frequently depositing large sums of money into your account and want it to be instantly accessible.
Full Wealthsimple Trade Analysis
More Details about Wealthsimple Trade’s Ratings
Stock trading costs (4.5/5) – Wealthsimple Trade does not charge the typical commission fees that most online brokerages in Canada charge, which is why I think they deserve a 4.5 star rating here.
However, as mentioned earlier, they do charge a currency conversion fee when buying US listed stocks and ETFs, so while there are no commission fees, there could still be a trading cost associated with your trade depending on what stock you buy.
But why I think Wealthsimple Trade still deserves 4.5 stars here is because this is only on US listed equities, so if you only wanted to buy into Canadian stocks – you would have no trading costs what so ever.
Account minimum (5/5) – This was a pretty easy rating for me to give. Wealthsimple Trade account minimum, or lack thereof, is well deserving of a full 5 star rating here.
They literally have no account minimums, you can start trading with as little as $1.
Unlike it’s competitors, Wealthsimple Trade lets young investors, who may not have thousands, or even hundreds of dollars, get started in the world of investing.
Only have $50 to start investing with? Good luck getting started with any other brokerage outside in Canada besides Wealthsimple Trade.
Fractional shares (5/5) – Wealthsimple Trade gets a 5/5 rating here for me as well. Not only did Wealthsimple Trade come out with this feature out of know where, but they managed to pull something off that none of their other major competitors have been able to do yet.
I talked about how this works earlier in the article, but long story short, if you wanted to invest in a company like Tesla but didn’t have $800 to spend, then you could just pick the dollar amount you wanted to invest and you’ll receive the proportionate amount of stock in return.
So if you invested $80 into Tesla which trades at $800, you’d earn 10% of Tesla stock. Pretty straight forward, hey?
From one I can tell, there is only one other online brokerage in Canada that offers fractional shares, being Interactive Brokerage. So the fact that Wealthsimple Trade, a relatively new company still, is able to offer this feature before it’s major competitor (Questrade) and the big banks is really impressive.
Crypto availability (4.5/5) – The fact that Wealthsimple Trade offers cryptocurrency is awesome. As of May 2022, Wealthsimple offers 40+ different crypto currencies to its users.
What’s even better? Everything lives in one app so you can easily navigate between your Trade and Crypto portfolio. This makes for a great user experience and allows users to easily transfer funds from their trade account to their crypto account.
Not only that, but early in 2022 Wealthsimple Trade came out with crypto wallets for it’s users so now you can send and receive selected crypto currencies from other crypto wallets.
All this to say, Wealthsimple Trade’s crypto functionality isn’t a cookie cutter throw in feature, it’s something they’ve spent a lot of time and resources on over the last few years and it shows.
Mobile app (4.5/5) – Wealthsimple Trade’s platform is really built for mobile. While they do have a desktop version, which I use sometimes, the app is where I look at my investments more often then not.
Wealthsimple understands that more and more people are accessing information on their mobile devices and have gone all in on their mobile product to make viewing, analyzing and purchasing stocks that much more convenient.
Additionally, the Wealthsimple Trade app allows its users to transfer funds from other Wealthsimple accounts they have. For example, if you are like me and you have a Wealthsimple Cash and Invest account too, then the mobile app will come in handy for you as you’ll be able to transfer funds between all of your accounts without having to withdraw it back into your back acount and then back into another Wealthsimple account.
I love this feature as I’m now able to easily transfer any dividends I earn directly from my Trade account into my spending account (Wealthsimple Cash). And of course, these transfers all come at no cost.
Investment offerings (4/5) – Wealthsimple Trade has never not had a stock I wanted to invest in. All those North American blue chip stocks like Apple, Amazon, Microsoft, Shopify, Scotiabank, RBC, you name it, Wealthsimple Trade will have it.
Wealthsimple Trade doesn’t however support investing in mutual funds, bonds, futures, preferred shares or options. Nor will you find stocks or ETFs that are only listed on non-north American stock exchanges.
So 99% of the people reading this will have no issue with Wealthsimple Trade’s investment offerings, however for that 1% of you who like to invest in random overseas companies, Wealthsimple Trade might not be for you.
Account offerings (3.5/5) – For account offering, I’m giving Wealthsimple Trade a 3.5. Now I think this maybe a little low, but I am trying to stay unbias here.
While they have all the accounts I need and use (Personal, TFSA and RRSP), they don’t support some popular Canadian investment accounts like margin accounts or RESPs.
But again, for a lot of new Wealthsimple Trade users, they just want the basics. They don’t want to trade with borrowed money and they aren’t investing for their children’s education (RESP), so accounts like the TFSA or RRSP are just perfect, and Wealthsimple Trade offers these, which is great.
Account fees (4.5/5) – Wealthsimple Trade’s account fees are super low and sometimes non-existent, which is why I think this category deserves a 4.5/5.
As I mentioned earlier, there are literally no fees associated with buying Canadian stocks on the Wealthsimple Trade platform.
And while there is a 1.5% currency conversion fee when buying US stocks, the sum of this fee is usually quite small compared to what some commission fees on other platforms cost.
Finally, if you planned to trade US stocks frequently on Wealthsimple Trade, you could subscribe to their Wealthsimple Trade Plus plan for $10 a month and then not pay any other fees whatsoever on all your trades.
So all and all, I think Wealthsimple Trade has a very fair and reasonable fee structure that I don’t think can be matched by any other online Canadian brokerage.
Customer support (4.5/5) – Wealthsimple’s customer support is world class. Not only can you connect with them in a variety of different ways – Email, phone, chatbot, social media – but their response time is laser quick and the agents I’ve always dealt with have been super friendly and helpful.
The only reason I docked them .5 points is because they are only accessible from 8am-8pm Monday to Friday and 9am-6pm on the weekends (Eastern time). While this isn’t the end of the world by any means, 24/7 customer support is always something I appreciate.
How to Sign up for a Wealthsimple Trade Account
Signing up for a Wealthsimple Trade account is very straight forward, like everything else on Wealthsimple Trade.
If you want a full, in-depth guide on how to create an account, go to my article here on the financial geek website.
But if you just want a high level overview, this explanation should suffice.
So first things first, you’ll want to go to the sign up page here.
To create an account you’ll give your email and set a password. If you are on a mobile device you’ll be asked for your phone number as well. At this point you’ll be prompted to download the Wealthsimple Trade app.
You’ll then have to fill out some standard personal information like Name, Address, Citizenship, etc.
After you do all of that, you’ll be asked what type of account you want to open, whether it be a personal account, a TFSA, an RRSP or Crypto.
Once you pick the account you want to open, you’ll enter your account dashboard and then fund your account.
Funding your account only takes a few minutes. In fact, this entire process should take you less then 20 minutes.
But in short, all you have to do is quickly connect your bank account to the Wealthsimple Trade app (which is completly safe to do) and then in the setting feature click Add Funds. From there you enter in the amount you want to enter and voila, you are good to go.
Other Commonly Asked Questions about Wealthsimple Trade
Can You Day Trade with Wealthsimple Trade?
So here’s the long and short answer to the question on if you can or can’t day trade with Wealthsimple Trade.
Yes, Canadian investors can day trade on the Wealthsimple Trade platform. Not only is it completely legal, but it is also completely compliant with Wealthsimple’s policies.
However, just because I can eat fast food every day, doesn’t mean I should – and the same goes for day trading with Wealthsimple.
Can you day trade with Wealthsimple Trade? Absolutely.
Should You day trade with Wealthsimple Trade? Absolutely Not (in my opinion).
Check out my article here to learn more about day trading with Wealthsimple, and why it’s not something I recommend.
How Does Wealthsimple Trade Make Money?
Wealthsimple Trade makes money in two ways. One way is by charging $10 per month to it’s Wealthsimple Trade Plus customers (me!) and the other is by charging what’s referred to as a currency conversion fee.
On top of that, Wealthsimple Trade is also just one of multiple products that Wealthsimple offers, and as I discuss in my article here, these other financial products for Wealthsimple also bring them in revenue.
Is Wealthsimple Trade Safe?
Wealthsimple Trade is completely safe, not only is the software fully encrypted, but it’s brokerage partner ShareOwner, Inc. is insured by the CIPF and regulated by the IIROC, protecting your funds in the event of fraud or even insolvency.
Check out my full in-depth article here on the safeness and legitimacy of Wealthsimple Trade.
How to Withdraw Money from Wealthsimple Trade
Withdrawing money from Wealthsimple Trade is quite simple, like everything else with Wealthsimple.
All you do is login to your Wealthsimple app and click “Move” on the bottom of your screen, then click “Withdraw funds”.
From there you’ll select what account you want these funds been withdrawn from (if you have more than one account) and where you want the funds to be deposited.
Click “Confirm” and your done!
How Do You Receive Dividends on Wealthsimple Trade?
Ah yes, dividends. The only thing better then the thought of dividends is actually getting them.
So besides actually buying some dividend paying stocks (or ETFs), you don’t really have to do anything else. When the company you invested in issues it dividends, you’ll get that money directly deposited into your Trade account as cash.
You can then do as you please with it. You could leave it in cash in your Trade account, you could reinvest it, or you could withdraw it to your bank account. That is up to you!
Quick Tip: To track your dividends over time, go to your activity tab in your Wealthsimple account and filter out everything except dividends. Once you do that you’ll get a full history of all the dividends you’ve received.
What Crypto Can You Trade on Wealthsimple Trade?
As of May 2022, Wealthsimple Trade offers 49 different cryptocurrencies.
If you are wondering if Wealthsimple Trade has one of the popular cryptocurrencies that you’re thinking about, it likely does. Wealthsimple Trade gives investors access to all the major coins like Bitcoin, Ethereum, Dogecoin, Solona, Polygon, Avalanche, Cardono, Shiba Inu, Tezos, Chainlink and many many more.
Check out a full list of all available cryptocurrencies in Wealthsimple Trades help center article here.
What is Wealthsimple Trade Plus?
Wealthsimple Trade Plus is Wealthsimple’s premium plan for their online brokerage and it costs $10 per month.
For $10 a month what you get is a USD account. So that way you only have to convert your funds to USD one time. Not EVERY TIME you buy and sell a US stock or ETF.
This plan will only make sense for you if you plan on buying (and selling) stocks a few times per month.
For more information about Wealthsimple Trade Plus, here is Wealthsimple’s article on it.
Company Overview: Wealthsimple
|Year Founded||September, 2014|
|Headquarters Location||Toronto, Canada|
|CEO||Michael Katchen (Since 2014)|
|Owner||Power Corporation of Canada|
|Company Type||Privately Owned|
|Assets Under Management||$15 Billion|
|People Using Wealthsimple||1.5 Million +|
|Customer Support Resources||Help Website, Email, ChatBot, Phone (1-855-255-9038)|
Wealthsimple Trade Review: The Bottom Line
Whether you’re an investor with some experience, or a complete beginner, you can’t go wrong with Wealthsimple Trade.
I’ve been using Wealthsimple Trade since the early days and was even a beta user (used it before the product was launched to the public). To see the progress this app and software has made since 2019 has been incredible – and I have no doubt they will continue to innovate and make the product even better as time goes on.
If you wanted to get started with investing, my suggestion would be to at least try them out. And heck, if you don’t like it, withdraw your funds and try another brokerage.
That’s all I got! Hopefully this article, if nothing else, will help you make an informed decision on whether or not you want to use (or try) Wealthsimple Trade.
Thanks for reading folks!