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Wealthsimple Review 2018 – Simple Automated Investing

Investing, Saving4 Comments

Wealthsimple Review - Simple Automated Investing

Wealthsimple is a Canadian-based robo-investing platform (and the biggest one in Canada), and as detailed in my Wealthsimple review, it’s one possible solution to make investing easy and accessible. Now that we live in a world where everything can be done with the swipe of a finger, many companies have seized upon this new era which is the world of Robo-Advisors.

Traditionally, investing required some basic finance skills. Either one had to go through an investment advisor, with fees often being quite prohibitive, or one had to find and choose some funds to pickup in order to have a good overall asset allocation. Furthermore, usually advisors are available only to high net worth individuals. For the average investor, investing in stocks can also be seen complicated and a lot of people lack suck knowledge or just do not want to know more about that.

At the same time, as we live in an environment with an all-time low-interest rate, a lot of people choose to park their money in traditional bank accounts, with really low interests, which is one the best way to lose some money due to inflation! That’s when companies like Wealthsimple come into play, they help you build a balanced and diversified portfolio so that you can begin building wealth for the future.

You’re looking to start investing in Canada or in the US (and now also UK)? So let’s take a look at this automated investment robo advisor in my Wealthsimple review. How does Wealthsimple work? What are the pros/cons of using Wealthsimple? How do they invest your money? Let’s get started with a brief overview of what to expect in my Wealthsimple review.

Wealthsimple Review Overview

Pros

  • Low Management Fees – Wealthsimple charge no fees at all if you have less than $5,000 to invest. Otherwise it ranges from 0.4% to 0.5%.
  • $0 Minimum Investment –  There’s no minimum investment so it’s quite easy to try them out and Wealthsimple will even reimburse transfer fees from your current account!
  • Super Easy Sign-up Process – You can signup either through the app or on their website, and they feature one of the easiest on-boarding process of all time.
  • Mint Integration – Mint and Wealthsimple are partners which means there’s a direct integration of Wealtsimple in Mint, thus making investing and budgeting easier to track than ever before.
  • Available in the US, Canada and UK – This is a somewhat unique feature among robo advisors. Most robo advisors stop at-the-border, but Wealthsimple started in Canada and is now available in the US and UK.
  • Perfect for Young & New Investors – Wealthsimple makes investing accessible for new investors by automating all of the investing process.
  • Great Referral Program – Get an additional $10,000 managed for free when you invite a friend to Wealthsimple (this can be cumulated!).
  • Really Clean Interface – The web interface is really clean with just enough dashboards to get a quick “at a glance” view. You also get to have the awesome Wealthsimple App (iOS and Android).

Cons

  • Not the Best for High Net Worth Individuals – For advanced investors, Wealthsimple might not be the perfect fit. If you can roll your own asset allocation and know investment theory, there’s little need to use a service like Wealthsimple.

Updated Wealthsimple Review 2018

UPDATE January 2017: Wealthsimple is now also available in the US!

UPDATE May 2017: With a raise of $50M in funding from Power Financial (early May 2017), Wealthsimple has now raised more than $100M in funding to date.

UPDATE September 2017: Wealthsimple is now also available in the UK!

UPDATE October 2017: Introducing Wealthsimple Gift Cards!

UPDATE November 2017: Wealthsimple now has more than $1.5 Billion in Assets Under Management and 50,000+ users!

UPDATE November 2017: Wealthsimple just launched their High Interest Savings account (Canada only at the moment) with a 1.10% rate

Table of Contents

What is Wealthsimple?

Wealthsimple is a robo advisor, founded in Canada in 2014 that invests your money in low cost index funds and it is one of the best investing platforum out there!

In a nutshell, Wealthsimple, like many other Robo-Advisors services, allows you to build an efficient and customized portfolio which is comprised of widely diversified, low-fee funds. The “Robo” part is mainly due to the fact that everything gets automated (and not the fact that it’s managed by robots, because we’re not in a sci-fi movie!).

It’s really easy to use, even for new investors. If you do not want to manage your own portfolio, Wealthsimple is tough to beat for a very low price particularly for small accounts, and is based on the “Set it and Forget it” principle.

How does Wealthsimple work?

The whole concept of Robo-Advisor and low-fee funds is to mirror the stock market. This is a passive approach to investing. You invest your money in the market as a whole, in a balanced way, for a low cost. You’re not into picking stocks and trying to beat the market.

Investing is all about the *endgame*. When I’m saving, I don’t really care about investment theories; what I care about are the results! I’m investing for a specific purpose, like saving for a home down payment, or for retirement.

All of that is handled for you by computers. Wealthsimple offer free re-balancing, tax optimization as well as a much cheaper MER (Management Expense Ratio) than the banks (about 0.2%). Who doesn’t enjoy cheaper fees (you’ll learn more about the fees later on in this Wealthsimple review)!

Investing is all about the endgame. I don’t really care about investment theory, what I care about are the results!Click To Tweet

There’s no need to research which investments you have to purchase or at what percentage for each. Wealthsimple automatically does this for you. This makes investing really easy for beginners. Wealthsimple’s goal is to maximize returns while also minimizing the risks. By investing in a wide pool of assets, this aims at collectively lowering the risks and yet stabilizing returns over the long term!

With Wealthsimple, you do not own individual stocks; instead, investments are held as ETFs (exchange-traded funds). The ETFs own a portion of the equities market via indexing. The asset allocation between these various ETFs ensures that your account is not weighted too heavily into one specific area, company or sector.

While this doesn’t lead to outrageous returns, it has the benefit of preventing to put all your eggs in a single basket.

As of February 2017, my overall Wealthsimple Portfolio performance is 11.8%. And I have paid not more than a couple cents for Wealthsimple to manage it for me (the first $5,000 are managed for free).

UPDATE December 2017: it’s now up to 22.1%.

Wealthsimple Review 2017 - Simple Automated Investing

View Your Overall Portfolio Easily on Wealthsimple Main Dashboard

I’m not alone in thinking that this is a great product, check out Young and Thrifty’s review of Canadian robo advisor Wealthsimple.

Wealthsimple Features

Wealthsimple has really low management fees. They also have the perks of modern technology as this a quite recent company (it was launched in 2014). It makes an attractive means to “set it and forget it” as you are able to set up recurring payments weekly, monthly or annually, as well as one-time contributions.

UPDATE December 2017: updated statistics.

Minimum Investment$0
Management FeesUnder $100k – 0.5%; $100k+ – 0.4%
Assets Under Management$1.5 Billion
Founded2014
Users50,000
Promotions$50 Bonus or $10,000 Managed For Free
Services offeredPortfolio Rebalancing, Dividend Reinvesting, Automatic Deposits, Human Advisors, Tax Loss Harvesting
Portfolio typesConservative (30% equity), Balanced (50% equity), Growth (75-90% equity), SRI

Setting up an account is also very easy. No more having to sign a lot of paperwork and waiting for it a long time before all is setup properly as everything can be done online. Once opened, just transfer your funds into one of their diversified portfolios and watch your money grow as everything else is taken care of.

Try Wealthsimple!

Opening an account takes less than 10 minutes and everything is automated. First $5,000 managed for FREE and get a $50 BONUS or $10,000 managed for free.

Open a Wealthsimple account

Wealthsimple isn’t a real “robo-advisor” by definition, because customers still can get financial and investment advice from a real human being. Named the “Wealth Concierge Service“, clients can get advice from a team of professionals portfolio manager to discuss their customized portfolio, including asset classes and asset allocation, and also answer anything related to investments, goals or finances.

One thing which also differentiate them a lot from other Robo Advisor, are all the new features they keep on adding from time to time, like the Socially Responsible Investing Portfolio, their newly launched High Interested savings account as well as the Gift Cards. That’s so nice to see some innovations and such a good idea to feature those gifts card for investing.

On a side note, if you don’t know yet what to ask for your children at Christmas from your relatives, Wealthsimple Gift Cards is one of the BEST option if you want to jump-start their financial future!

Wealthsimple Account Types

Supported accounts types (Canada)

  • RRSP (Individual and Spousal)
  • TFSA
  • RESP
  • RRIF
  • LIRA
  • Corporate
  • Non-registered accounts (Single and Joint)

Supported accounts types (US)

  • Personal
  • Roth IRA
  • Traditional IRA
  • SEP IRA
  • Joint
  • Trust

Supported accounts types (UK)

  • ISA
  • JISA
  • Personal Investment account

Wealthsimple Portfolio Types

Wealthsimple’s portfolios are comprised of varying positions in low-cost index-based ETFs. There are three portfolios available, which are conservative, balanced and growth:

  • Conservative Portfolio: 30% Stocks, 70% Bonds
  • Balanced Portfolio: 50% Stocks, 50% Bonds
  • Growth Portfolio: 75-90% Stocks, 10-25% Bonds

Each of Wealthsimple portfolios includes between 8 and 10 ETFs and each ETF represents a unique asset class.

Here are the ETFs used for Wealthsimple US:

  • VTI: Vanguard Total US Market ETF
  • VOE: Vanguard Mid-Cap Value ETF
  • VBR: Vanguard Small-Cap Value ETF
  • VGK: Vanguard FTSE Europe ETF
  • DXJ: WisdomTree Japan Hedged Equity Fund
  • VWO: Vanguard FTSE Emerging Markets ETF
  • MUB: iShares National Muni Bond ETF
  • TIP: iShares TIPS Bond
  • BND: Vanguard Total Bond Market ETF
  • ANGL: VanEck Vectors Fallen Angel High Yield Bond ETF
Wealthsimple Review 2017 - Simple Automated Investing

Wealthsimple Growth Portfolio for US Users

And these are the ETFs used for Wealthsimple Canada:

  • XIC: iShares Core S&P/TSX Capped Composite Index ETF
  • VTI: Vanguard Total Stock Market ETF
  • PDF: Purpose Core Dividend Fund
  • IEFA: iShares Core MSCI IEFA ETF
  • IEMG: iShares Core MSCI Emerging Markets ETF
  • ZCS: BMO Short Corporate Bond Index ETF
  • ZHY: BMO High Yield US Corporate Bond Hedged ETF
  • ZFM: BMO Mid Federal Bond Index ETF
  • PHR: Purpose Duration Hedged Real Estate Fund
  • VUS: Vanguard US Total Market Index ETF

But as explained earlier, there’s no real need to worry about asset classes and asset allocation if you choose to invest with Wealthsimple as they do all of this for you! Simply answer the questions asked when opening up your account and they will setup automatically a portfolio with these asset classes for you.

If you want to change your asset allocation after the first setup, it is of course possible, and you’ll have to ask the support directly to make the changes. They’re usually quite responsive!

Wealthsimple Socially Responsible Investing

If you’re someone who cares about the impact your investments make on the world, up until now, you’ve still had to do all the worrying yourself. But Wealthsimple has options for you! They created an SRI (socially responsible investing) offering that has the same great features all Wealthsimple portfolios do.

These SRI ETFs include low carbon, cleantech, affordable housing bonds, and more. The idea is to invest in companies that promote your social values.

But you should be aware that many SRI funds can come with a higher price tag. In addition to the management fee from Wealthsimple there are underlying fees attached to the ETFs themselves. Wealthsimple SRI portfolio’s management-expense ratio (MER) is slightly higher, ranging from 0.25 per cent to 0.40 per cent, compared with 0.15 per cent to 0.30 per cent for its non-SRI portfolios.

Now you can feel better about the way you make money with the help of SRI through Wealthsimple!

Wealthsimple for Work

Wealthsimple for Work is another service offered by Wealthsimple which includes personalized investment advice for all plan participants and offers low-cost, passive ETFs instead of high fee mutual funds.

If you own a business, you can get help managing your Group RRSP or your company’s investment benefit . That’s great, because it takes some of the hassle and difficulty off your plate. If you want to offer a benefit to your employees, this can be a good way to do it, and Wealthsimple do not charge any administration fee for this (except matching contributions of course).

Wealthsimple Dashboard

Wealthsimple recently did a major overhaul of their website and they made it more visually appealing and investor friendly. To be complete in my Wealthsimple review, I included some screenshots to show how well designed is the Wealthsimple dashboard. Here’s what the user interface looks like now (I personally love it!):

Wealthsimple Review 2017 - Simple Automated Investing

Wealthsimple Portfolio Type, Contributions and Earnings

As can be seen above, Portfolio total value, Earnings as well as Performance are really easy to find. But equally important is just below, where you can find Wealthsimple fees (and how much you saved on Fees), how many trades you have made and your reinvested dividends.

For each account type, you also get to see your holdings, which are defined by your portfolio type. For example I’m 80% equity and 20% bond, and here are some of the ETFs I have in my portfolio.

Wealthsimple Review 2017 - Simple Automated Investing

Holding, Fees, Allocation and Market Value

Is Wealthsimple Safe?

Wealthsimple is considered one of the best financial services websites in the world. They even have won the Webby for the best financial services website (two consecutive years!). They are also the best robo advisor in Canada as well as the largest, and they also have the highest count of Assets Under Management (AUM).

If this was not enough to guarantee that Wealthsimple is safe, Wealthsimple accounts are also insured:

  • SIPC coverage up to $500,000 for the US
  • CIPF coverage up to $1,000,000 for Canada
  • FSCS coverage up to £85,000 for the UK

This doesn’t mean that you can’t lose money, but that it is protected if anything should happen to Wealthsimple.

Wealthsimple (super easy) Sign-up Process

The ease of signing up through Wealthsimple and their overall website design and app’s experience was what hooked me up in the first place.

Wealthsimple Review 2017 - Simple Automated Investing

Wealthsimple App Features Excellent Usability and a Beautiful Design

At this point on my Wealthsimple review, I must admit that Wealthsimple offers a blazing fast on-boarding process (whether it be online or directly in Wealthsimple App), unlike traditional banks, which allows to set up an account in less than 10 minutes from your smart phone or your computer. There’s no endless paperwork to sign. Everything can be done online!

You start by answering a few simple questions to be placed into a risk category (depending on your risk tolerance) from one 1 of 10, 10 being the highest risk focused mainly on equities (as opposed to fixed income). After this step, with an e-signature you get to sign documents electronically, thus eliminating the need to visit a traditional physical location to fill out paperwork. In just a couple minutes, you’re ready to start investing.

I was personally placed in Risk Category 8, which is a balanced portfolio of 80% equities and 20% fixed income.

“I automated my contributions to my retirement account as if it was a simple monthly bill! Just set it and forget it.”

Then, if you want, you can setup a call with their “Wealth Concierge”. This is a real financial advisor who has a quick conversation with you about your goals and validates if your risk category is right for you. Overall, here are the kinds of questions that you might be able to discuss:

  • What are these accounts for?
  • When do you think you’ll need the money?
  • Do you anticipate taking any of the money out to buy a house, achieve other goals?

In a couple minutes, I was all set up with my Wealthsimple account.

If you do not want to create a new account, you can choose to transfer an existing one from another bank account.

Once all the paperwork was submitted, it was a quick waiting game for Wealthsimple to use the funds to buy into the market. I think it took less than a day for my money to be invested.

How much does Wealthsimple charge?

My Wealthsimple review would not be complete if I did not speak about Wealthsimple fees. This is one of the main reason why I chose Wealthsimple was because accounts under $5,000 are managed for free. Because of this I am allowed to grow my portfolio free of any management fee and gain a little investing experience at the same time. As a *young* and new investor this was a key point for me (also remember that with my Wealthsimple promo link, you get a $50 bonus (US) or $10,000 managed for free (CA and UK)).Wealthsimple Review 2017 - Simple Automated Investing

You still have to pay the funds MER (Management Expense Ratio) fees that are used depending on the portfolio you chose, which are usually between 0.04% and 0.22%.

Another factor the led me to choose Wealthsimple over their competitors was the fact that Wealthsimple has no hidden fees. They have in their FAQ all the information you will need about Wealthsimple fee, from the percent you are charged for your account.

Wealthsimple announced in January 2017 (see their blog here) that they greatly simplified and reduced their management fee. Now there are only two different packages regarding Wealthsimple fees which are Wealthsimple Basic and Wealthsimple Black:

  • Wealthsimple Basic – Accounts under $5,000: 0% management fee. 
  • Wealthsimple Basic – Accounts under $100,000: 0.50% management fee. This includes any trading fees, account fees, rebalancing costs and transfer fees.
  • Wealthsimple Black – Accounts over $100,000: 0.40% management fee. With Wealthsimple Black you get all the perks of Wealthshimple Basic, and a lower management fee, as well as automatic tax-loss harvesting, full-service financial planning. You also get a Priority Pass (valued at $399) to access 1000+ airline lounges!
Wealthsimple Review 2017 - Simple Automated Investing

Wealthsimple Fees Structure, Basic vs Black

As for transfer fees, if you choose to transfer from an existing account and if the transfer is over $5,000 Wealthsimple will reimburse the transfer fee your bank might charge for an account transfer (sometimes this adds up quickly to $100-$150!).

Wealthsimple Review Summary

Rating

  • Rated 5

Summary

  • Wealthsimple is one of the best robo-advisors out there. It’s the perfect way to get started investing for anyone and as explained in my Wealthshimple review, it features everything needed to get started quickly and easily with long-term investing. If you aren’t interested in stock picking, but you know that investing needs to be part of your plan, the combination of very low fees and excellent usability makes Wealthsimple the market-leading app for you!

Final Thoughts

What started as a way for me to improve and automate my finances ended in a recurring contribution to my Wealthsimple account. So far so good as they say, and I’m still really impressed with their services! Starting investing with Wealthsimple was definitely one really interesting investing strategy which I now recommend to many people.

If you are looking to start investing I would highly recommend using Wealthsimple. Its a great way to get exposure to investing and low-cost funds, and with the first year of zero management fees from them on your first $5,000 it’s a great option to get started.

Also don’t forget to sign-up with my Wealthsimple review promo offer to gain the $50 bonus when signing up to Wealthsimple (that’s only for people living in the US. If you live in Canada or the UK, you get $10,000 managed for free!). Its a great way to save yourself some money in Wealthsimple fees or get a nice bonus to get started!

I hope you liked this review and learned more about Wealthsimple App and how to get started investing easily in Canada or the US/UK, and that you learned a bit about Wealthsimple in my review and the whole “Robo-Advisor” concept in general! I’m keeping this Wealthsimple review updated as soon as any update related to Wealthsimple appear so you won’t miss any changes.

Other financial tools reviews you might be interested in

– Vincent

What about you? Are you using a Robo-Advisor like Wealthsimple? What do you think of them? Let us know in the comments!

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  • Avatar for Finance For Geek
    Frank O'Sullivan
    May 24, 2017 at 8:59 AM

    No 529 accounts?

  • Avatar for Finance For Geek
    David Gray
    Nov 29, 2017 at 1:00 AM

    Really interesting and thorough review! I have one question though, does Wealthsimple offers RESP? Last time I check they did not I believe.

    • Avatar for Finance For Geek
      Finance For Geek
      Nov 29, 2017 at 10:13 AM

      Thanks David! Yes they do, I think they started offering RESP back in March 2017 only that must be why you thought that.
      You have access to all the federal / provincial grants for RESP accounts with them. The only exception being the grants from Quebec which are not offered (yet!).

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