Wealthsimple Trade Review – Investopedia
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Canadian online broker, Wealthsimple, has been around less than a decade, but it has become one of the top online investing platforms for investors in Canada and other countries such as the United Kingdom.
Wealthsimple is best for new to average-experienced, passive investors who prefer automated or self-directed investing with smart technology platforms. What Wealthsimple does well is make complex investing processes effortless and clear, and they provide affordable financial solutions for their customers. Wealthsimple was the first online broker in Canada to offer commission-free stocks and ETFs. Wealthsimple focuses on providing online access for investors to trade without having to physically go to a branch. Due to the limited number of financial tools and platforms, Wealthsimple may not be the best option for active traders. Similarly, Wealthsimple may not be the best fit for experienced and active traders who want to have access to a robust mobile app that has a full array of comprehensive features. Wealthsimple is more of a financial technology company than a traditional broker.
Aside from this Wealthsimple’s online broker platform, we’ve also reviewed Wealthsimple’s robo-advisor.
American investors who want to trade Canadian investments should be aware of the differences in how Canadian investments and American investments are protected. In Canada, investments are protected by the Canadian Investor Protection Fund (CIPF), and bank accounts are protected by the Canada Deposit Insurance Corporation (CDIC). In America, investments are protected by the Securities Investor Protection Corporation (SIPC), and bank accounts are protected by the Federal Deposit Insurance Corporation (FDIC).
Wealthsimple was formed in September 2014 by Michael Katchen in Toronto, Canada. The company is a subsidiary of Power Corporation of Canada. Wealthsimple’s mission is to help everyone achieve financial freedom, no matter who they are or how much money they have. Their superpower is providing uncomplicated, digital financial resources and tools to help customers easily manage their finances.
On March 4, 2021, Wealthsimple reported that they sold their American accounts to Betterment, and the transaction was completed and the American accounts were transferred in the second quarter of 2021. During the first quarter of 2022, Wealthsimple sold and transferred its United Kingdom accounts. The company is putting more focus on the Canadian market.
In Canada, Wealthsimple has become one of the most popular online brokers, especially for new investors and passive investors. At the end of the second quarter of 2022, Wealthsimple had 1.7 million clients in Canada and had $14.9 billion assets under administration. The company reported year-over-year growth of 14%. They are also the first regulated crypto broker in Canada and continue to roll out new and enhanced features and services.
Commission-free stock and ETF trades
Competitive option for new investors
Automated investing platform
Fractional stock and ETF shares trading
Limited platforms and tools
No protection for crypto assets
Wealthsimple Trade and Wealthsimple Invest aren’t synced
In the eight years that Wealthsimple has been in existence, it has become one of the top online brokers and largest robo-advisors in Canada. The company’s focus is on making sure people can have access to financial tools and information without it being overly complicated and expensive. The Wealthsimple website is simple to use and easy to navigate. Before you can set up an account, you have to create a profile on the sign-up page on the website. Wealthsimple tools and resources are available on both their website and mobile platforms.
Wealthsimple’s platforms include:
Wealthsimple’s website and app platforms are not as robust as some of their competitors’ platforms. They provide simple financial platforms and tools that an investor at any level can comprehend. If you are an active trader desiring more advanced features and tools, you may want to consider other options. Wealthsimple uses innovative technology, such as automated investing using robo-advisors, which may appeal to new investors and passive investors.
Wealthsimple offers customers two plans in their Wealthsimple Trade platform. The plans are the Basic (free) plan and the Plus plan, which is an upgrade and is $10 monthly. Plus plan customers have access to additional features such as unlimited real-time quotes and price alerts. Wealthsimple does not offer an idea generator tool, and there are limited analysis tools. Customers do have access to a charting tool on both the mobile and website platforms. The charting tool has limited features and may be perfect for new investors and investors who may not need a lot of analysis data to keep track of their investments. The charting tool does not have a drawing tool, and a line chart is the only chart type. However, customers can change the available timeframes to get an idea of investment performance at various time intervals.
Wealthsimple’s app includes two separate mobile trading apps, which are Wealthsimple Trade and Wealthsimple Invest. Wealthsimple Trade is a self-directed trading platform, and Wealthsimple Invest is an automated trading platform that uses a robo-advisor. The features in the app are limited in comparison to the features that some of Wealthsimple's competitors’ apps have. Customers are required to use biometric logins to access their accounts in the Wealthsimple app.
Investors are provided with real-time stock quotes in the mobile app and have the same types of orders that are available on the website platform. These order types are market orders, stop-limit orders, limit orders, and other fractional orders. There is a charting tool in the mobile app, but it does not have a drawing tool. Customers can select from various timeframes, which is the only customization feature. A line chart is the only chart type available.
The screeners have limited features and have no customization features or technical indicators. You can create a watchlist for stocks, ETFs, or cryptocurrencies to help you track each investment. You can only create one watchlist at a time, not multiple watchlists. In the watchlist, you can see an investment’s performance at various time intervals, statistics about the investment, news about the investment, and which categories the investment falls into.
As an online discount broker, Wealthsimple doesn’t have a wide range of offerings. Wealthsimple does not offer mutual funds, options, futures, or fixed income. Wealthsimple’s offerings include:
Wealthsimple offers only four order types. They are market orders, stop-limit orders, limit orders, and other fractional orders. The order types are available on both the Wealthsimple website and app. They don’t offer complex conditional orders nor the ability to stage orders for later entry. Wealthsimple keeps it basic when it comes to orders and clearly is aimed at a buy-and-hold investor more than an active trader.
Wealthsimple complies with the Investment Industry Regulatory Organization of Canada (IIROC)’s rules. Part of the compliance is to have quality order execution policies and procedures in place and disclose this information to customers. This includes order handling and routing, order types, technical issues, conflicts of interest that pertain to execution, and foreign regulated markets. This also includes various factors such as investment prices, execution speed, execution assurance, transaction costs, and market conditions.
Wealthsimple discloses all of their fees and costs for their products and services in the legal section of their website. Wealthsimple does not have the lowest investment management fees in comparison to U.S. online brokers, but it's no-commission stock and ETF trading makes it competitive for Canada—a country where trading commissions are still quite common.
Wealthsimple is an online discount broker whose mission is to provide affordable financial solutions to everyone. Even though several products and services have no minimums, no service fees, and no commission fees, the company still must make money in some way.
Simplicity is the focus for Wealthsimple. They do offer various services and support for their customers, but the number of offerings is not as robust as some of their competitors who have been around longer. Unfortunately, Wealthsimple lacks in the area of research. They do not offer proprietary research or third-party research to customers, and they don’t offer daily market research reports to customers. Also, they don’t offer trading idea generator tools to customers.
Wealthsimple’s customers have access to screeners for socially responsible investments (SRIs) (including ESG investments), stocks, and ETFs. However, customers cannot build or customize their own screens, which also means they can’t save customized screens for later use. Investments cannot be screened based on technical indicators.
Customers can create a watchlist for stocks, ETFs, or cryptocurrencies to help them keep track of each investment. Upon creating a watchlist, customers have access to different details about the investment such as the investment’s performance at various time intervals, statistics about the investment, news about the investment, and which categories the investment falls into.
Wealthsimple has a limited number of ETFs that are available to customers and does not offer mutual funds. Wealthsimple’s ETF screener has limited features. Customers cannot build or customize their own ETF screens, which also means they can’t save customized screens for later use. ETFs cannot be screened based on technical indicators.
Customers can create a watchlist for ETFs to help them keep track of each ETF. Upon creating a watchlist, customers have access to different details about the ETF such as the ETF’s performance at various time intervals, statistics about the ETF, news about the ETF, and which categories the ETF falls into.
Wealthsimple does not offer options securities and therefore does not have an options screener.
Wealthsimple does not offer fixed income securities and therefore does not have a fixed income screener.
Tools and calculators are limited in Wealthsimple’s platforms. They provide four free online calculators including, a TFSA calculator, an RRSP calculator, an income tax calculator, and a Canadian retirement calculator. There are no detailed portfolio or market analysis tools.
In the Wealthsimple app, customers can receive price alerts and stock news. Customers have access to a very limited feature charting tool in Wealthsimple Trade. The charting tool is available in both the website and app platforms. Wealthsimple Trade has a limited watchlist feature. Customers can only create one watchlist at a time or select from predefined watchlists.
Wealthsimple Trade has a limited charting feature. The charting tool is available on both the website and mobile app. There are no drawing tools, and the only customization option is a selection of various timeframes. There is a default line chart but no other chart types.
Wealthsimple does not offer any trading idea generators.
When customers create a watchlist for a stock, they have access to news about the stock. Customers have access to stock news and price alerts in the Wealthsimple app. However, Wealthsimple does not provide major headline financial news on their platforms for customers to access. Wealthsimple does have a separate news section in their online Wealthsimple Magazine where they announce new products and services and other important company news.
Wealthsimple does not offer customers access to third-party research.
There is no sweep on uninvested funds or interest paid on cash balances with Wealthsimple Trade.
Wealthsimple does offer two unrelated cash management options for customers, including Wealthsimple Spend and Wealthsimple Save. Wealthsimple Spend includes a digital and physical Wealthsimple card and has no fees and account minimums. Customers can manage the card’s features in the Wealthsimple app. Customers earn 1% back in cash, crypto, or stock when they use the card. The Wealthsimple Save account has no fees, and customers earn 1% in interest. Additionally, Wealthsimple now offers Wealthsimple Cash, which is a cash app allowing customers to send and receive funds to and from their cash account.
Wealthsimple does not offer dividend reinvestment plans.
Wealthsimple does not provide customers access to any proprietary or third-party research tools. Customers who prefer self-directed investing using Wealthsimple Trade are out of luck when it comes to research tools for ESG and socially responsible investments (SRIs).
Customers who prefer a managed portfolio can use Wealthsimple Invest, which is an automated investing platform that uses a robo-advisor. The robo-advisor does the research for the customer. Wealthsimple’s standard SRI and ESG portfolios contain companies that have at least 3 women on their board of directors and companies with the lowest carbon emissions in each industry. Wealthsimple also offers a Halal portfolio that complies with Islamic law.
In Canada, Wealthsimple is a top choice for those wanting to trade socially responsible investments (SRI) and Halal investments.
Wealthsimple has limited analysis tools in their platforms. The Wealthsimple Invest platform has a digital investment manager that does portfolio analysis, but only for managed portfolios. Wealthsimple has four free online calculators that customers can use for analysis purposes.
Wealthsimple offers a complimentary portfolio review for non-Wealthsimple customers. If you have a portfolio that has a minimum balance of $50,000, a Wealthsimple advisor will review your portfolio to help you decide if a Wealthsimple managed portfolio better suits your goals and needs.
Wealthsimple’s limited educational resources are designed not to be overwhelming for new investors. There is plenty of foundational education to help new investors learn the basics. Experienced investors and active traders will find the educational resources shallow, but the platform itself isn’t set up for even intermediate trading strategies like multi-asset position trading.
Wealthsimple provides various tips, advice, articles, podcasts, and has a YouTube channel. They also have Wealthsimple Magazine, which is on their website. Wealthsimple provides a free Canadian retirement calculator on their website. There are two main educational resources, including:
Wealthsimple has a legal section on their website that contains various disclosures. Wealthsimple provides clear details on their products and services’ pricing structures and fees.
Wealthsimple is focused on the Canadian market, so it offers the standard fare for Canadian brokers. This includes:
Passive investors will find a lot to like at Wealthsimple. New investors will not be overwhelmed by the amount of educational content provided on Wealthsimple’s mobile and web platforms, but it does the job in easing you into investing. The digital investment management route is the most passive solution and, while not as full-featured or cheap as its U.S.-based competition, gets the job done with diversification and automated rebalancing. The Wealthsimple Trade platform is harder to classify, however.
Wealthsimple’s trading platforms, tools, educational resources, and research are limited. Depending on the type of investor and their goals, what Wealthsimple provides may or may not be enough. If you are a DIY investor looking to keep costs down and are mainly looking to buy-and-hold rather than trade, then Wealthsimple Trade’s $0 commissions offset some of what the platform lacks. Active traders and experienced investors who are seeking more robust and detailed analysis tools, research tools, and educational resources will need to consider other options. For Canadians, that likely means another Canadian brokerage like Questrade or a bank affiliated broker—or, better yet, Interactive Brokers also serves the Canadian market with its powerful trading platform.
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