**This post may contain affiliate links. I may be compensated if you use them.
Are you looking for an easy way to invest but not sure where to begin? Do you want a method that will save you time, stress, and even money? Then maybe it’s time that you considered a robo advisor. Despite the name, it’s important to note that robo advisors are not robots. The process is automated but the companies are run by very knowledgeable professionals who select the investments, develop and maintain the algorithms, and provide customer service and financial advice.
While still relatively new, robo investing is becoming steadily more popular in Canada thanks to the fact that they provide a ‘set it and forget it’ strategy for long-term investing. It’s an easy way to help Canadians reach their financial goals without having to worry about managing it themselves or paying hefty fees to have someone else do it for them.
Based in Toronto, Wealthsimple is the largest robo advisor in Canada and a firm favourite when it comes to robo investing. They are lauded for their simple on-boarding process and easy to use website and app which makes it ideal for those new to investing. Additionally, Wealthsimple is considered to be one of the best financial services in the world.
In this Wealthsimple review, we’re sharing everything you need to know about this Canadian robo advisor to determine if they are the right choice for you.
Bonus: Money We Have readers will get $50 for free when investing $500 thanks to my Wealthsimple affiliate deal.
Wealthsimple has a variety of accounts that customers to choose from though RRSPs and TFSAs are the most popular account choices. For those who choose to go with one of these accounts, you will be asked to take a risk tolerance survey. Upon completion of this survey, your funds will be split into a variety of ETFs to create a diversified portfolio based on your goals and risk tolerance.
Other types of accounts offered by Wealthsimple include:
- Joint savings and investing accounts
- Corporate Accounts
- Personal Taxable Account
Keep in mind that Wealthsimple has no account minimum which means anyone can get started in investing.
Wealthsimple Portfolios and Features
Wealthsimple offers three basic types of portfolios depending on how much risk you are willing to take with your investments: Conservative (30% stocks, 70% bonds), Balanced (50% stocks, 50% bonds), and Growth (75-90% stocks, 10-25% bonds).
Additionally, there are plenty of helpful and attractive features.
To start with, there are no minimum deposit requirements to open your Wealthsimple account. Your account is also personalized and tailored to fit your comfort level and needs. If you need any assistance or advice along the way, you can get in touch with the Wealthsimple in-house advisors for any questions or concerns you may have.
Wealthsimple accounts also benefit from automatic rebalancing and dividend reinvesting. Keep in mind that because this is a robo advisor, both things are automatically done for you. You don’t have to worry about it at all. Plus, if you qualify for Wealthsimple Black or Wealthsimple Generation, you get access to tax-loss harvesting and full-service financial planning.
Some investors may also be interested to learn that Wealthsimple investment portfolios do have socially responsible investing (SRI) options as well. This means that you can choose to invest in companies with positive social and environmental impacts such as low carbon and gender diversity while avoiding others with ties to less desirable products such as tobacco or gambling. For Muslim investors, Wealthsimple also offers a halal investing portfolio that complies with Islamic Law.
So what makes Wealthsimple a good pick for Canadians considering robo advisors? Well, Wealthsimple is known in Canada and around the world as a trusted financial service.
As for strategy, well if you are an investing enthusiast you may find Wealthsimple’s technique boring, but that’s kind of the point. New (and old) investors shouldn’t be looking for something flashy when it comes to investing, they should be looking for strategies that work and have low fees. Wealthsimple provides that.
Wealthsimple uses low-cost ETFs to keep your fees low so that your money can be better put towards building your long-term savings. Once you have determined your risk tolerance, they will build you a portfolio made up of a diversified mix of both stocks and bonds. Then, using an algorithm, your portfolio with be adjusted over time as you move closer to retirement.
Wealthsimple has three tiers based on your investment amounts.
- Basic: Up to $100,000
- Black: $100,000-$500,000
- Generation: $500,000+
As mentioned under the fees section, your fees will decrease once you hit the $100,000 mark. At this point, you are also eligible for additional perks. But, don’t let this fool you. Wealthsimple is a great choice for those just starting out as well. There is no minimum balance requirement.
Of course, while Wealthsimple is absolutely one of the best robo advisors in Canada, it’s not without its disadvantages. Here’s a quick rundown of the main pros and cons of Wealthsimple.
- Simple and easy to use
- No minimum investment required
- Experienced team behind the company
- Varied selection of investment options
- Very low ETF MERs
- App compatible with both apple iOS, android, and google play.
- Higher fees compared to DIY investing
- Limited portfolio options
Robo advisors are generally a cheaper option than financial advisors; however, they do come with fees as well. Wealthsimple management fees are pretty easy to understand since this is what you’ll pay:
- Accounts under $100,000 will be charged a 0.5% management fee
- Accounts over $100,000 will be charged a 0.4% management fee
Note that this is a tiered system so the first $100,000 is charged the 0.5% management fee while any amount over that is charged 0.4%.
Wealthsimple clients also need to be aware of additional fees such as the management expense ratio of the ETFs in your portfolio, which are charged by the fund company or MERs. With Wealthsimple, MERs are approximately 0.2%.
Furthermore, you will be required to pay taxes (GST) on the fees that you owe to Wealthsimple. However, even with these fees, Wealthsimple’s associated costs still tend to come out cheaper than what you would pay with a financial advisor.
It’s worth noting that when you reach $100,000 you’ve reached the Wealthsimple Black level. At this point, besides the lower fee, you’ll get a few additional perks such as regular goal-based financial planning sessions to keep you on track, and VIP access to airport lounges in 400 cities across the world.
Money We Have readers get $50 for free when they sign up for Wealthsimple using my referral link and invest a minimum of $500.
If you’re thinking about transferring your RRSP or any other investment account over to a robo advisor, Wealthsimple will cover the associated transfer fees for accounts with a balance of $5,000+. Read more about transferring your RRSP here.
How Wealthsimple compares to others
So, how does Wealthsimple compare to other robo advisors in Canada?
Well, it’s the largest robo advisor and, therefore, one of the most trusted.
Wealthsimple has limited portfolio options in comparison to other robos. Justwealth has around 70 portfolios and offers up to $500 when you sign up. There’s also RBC InvestEase which many Canadians choose because of the security and trust that comes with the name of one of Canada’s biggest banks.
That being said, the fact that Wealthsimple has no minimum requirement and is known for its user-friendly website makes it a strong pick for those new to robo advisors or new to investing in general. Plus, Wealthsimple is continually expanding with the addition of products such as the halal portfolios and SRI portfolios.
Other Wealthsimple Products
As it has gained in popularity, Wealthsimple has increased the types of products they offer to better fit the needs and interests of Canadian clients. Personal finance products on offer include the following:
- Wealthsimple Invest, which is the robo advisor that this review focuses on
- Wealthsimple Trade for individuals who are interested in DIY investing
- Wealthsimple Cash is a peer-to-peer payment platform and comes with a no foreign exchange fee prepaid credit card.
- Wealthsimple Save which is their saving account
- Wealthsimple Crypto for those with an interest in cryptocurrency such as bitcoin or ethereum
- Wealthsimple tax which is their tax software program
My Wealthsimple review is positive. Without a doubt, Wealthsimple deserves its place as one of the top robo advisor options in Canada. The easy to use platform and trustworthy tactics make them an ideal fit for both new and experienced investors. The fact that you can invest with them with confidence makes it easier and less stressful to save for your future.