Wealthsimple Review


Wealthsimple
Average Rating: 1 reviews

Summary

Wealthsimple is an investment platform designed to help you manage your investments easily with minimal fees. The two year old company manages over $500 million in assets through its robo-advising platform.

When you invest through Wealthsimple, your investments are put on autopilot and managed by complex computer algorithms designed to maximize your return while minimizing risk and fees. Sign up here to get the first $5000 managed for free and a limited time sign up bonus of $50-$100 for InvestmentZen readers.

Quick Facts

Minimum Deposit
$0
Assets Under Management
$560 Million
Year Founded
2014
Number of Users
Unknown

Fee Structure

Account ValueAnnual Fee
$0 - $5,0000%
$5,000 - $100,0000.5%
$100,000+0.4%

Features

Single Stock Diversification
Direct Indexing
Tax Loss Harvesting
Fractional Shares
Human Advisors

Supported Account Types

Taxable Accounts
401k Plans
IRA Accounts
Roth IRA Accounts
SEP IRA Accounts
Trust Accounts
529 Plan Accounts

Expert Walkthrough

Eric Rosenberg by Eric Rosenberg

What is Wealthsimple?

Wealthsimple is an investment company that helps you invest your money automatically with low fees. With no minimum and a low 0.5% management fee on accounts with balances below $100,000, anyone can sign up and take advantage of the power of robo-advisors.

Wealthsimple is currently offering a $50 bonus (or $100 if you transfer enough to qualify for Wealthsimple Black) to InvestmentZen readers. You can sign up for this limited time offer here.

Unlike traditional stock brokers, Wealthsimple handles all of your investments for you with little work on your part. Choose between one of three portfolios, conservative, balanced, or growth, and Wealthsimple takes care of the rest. Your dollars are invested in a combination of United States and international stocks and bonds through low-fee exchange traded funds (ETFs).

Wealthsimple offers three types of accounts and two different account plans:

Personal - A regular old taxable investment account, this is Wealthsimple’s most popular account. It does not offer any tax benefits, but gives you the freedom to invest or withdraw as much as you’d like at any time without restriction. The personal account allows you to enjoy the freedom of a regular, taxable investment account with the power of a robo advisor. This type of account is a great choice for any investor looking to earn more on their investments.

Traditional IRA - A traditional IRA allows you to invest with pre-tax dollars. This means you do not pay any income taxes on the dollars you contribute to your account, but do pay income taxes when you withdraw in retirement, presumably at a lower tax rate. Early withdrawals incur both taxes and penalties from the IRS. Traditional IRAs are a popular retirement account option due to their flexibility and tax advantaged savings for the future. Due to the taxation rules, this type of account is best for investors nearing retirement in the next decade or so.

Roth IRA - A Roth IRA is another tax advantaged retirement account, but instead of using pre-tax dollars you invest with after-tax dollars. This means that you do pay income taxes the year you invest, but your withdrawals and all capital gains are tax free. Like a traditional IRA, you have to wait until you retire to withdraw without additional taxes and penalties - unless it is for a first home purchase down payment. Roth IRAs are best for young professionals and investors that have a longer time horizon before retirement.

No matter which type of account you open, you can choose between the conservative, balanced, and growth portfolios which are managed using “Modern Portfolio Theory,” a portfolio management concept introduced by Nobel Prize winning economist Harry Markowitz. The basic idea of modern portfolio theory is to minimize risk and maximize gains through a well balanced and diversified portfolio.

Wealthsimple also offers a socially responsible portfolio option. This portfolio is made up of ETFs that specifically invest in environmentally and morally conscious companies. This is achieved through investments in six ETFs that include clean technology, lowering carbon emissions, improving diversity, local investing, and affordable housing. Wealthsimple is the biggest robo advisor in Canada and one of the larger robo advisors in the United States.

Wealthsimple Features and Pricing

No matter which account you choose, you will fall under one of two pricing models. The first plan is called “Wealthsimple Basic” and is for accounts with a balance below $100,000. For accounts over $100,000, you are upgraded to the second plan, “Wealthsimple Black.” Here is a rundown on the features of both accounts:

 

Wealthsimple Basic

  • Automatic rebalancing - Wealthsimple periodically sells and buys investments to keep your portfolio in line with your target allocation
  • Dividend reinvestment - Dividends are automatically reinvested into the same ETFs so your portfolio will continue to grow rather than sending you a cash dividend
  • Automatic deposits - Set your own schedule for automatic transfers from your checking or savings account into your Wealthsimple investing account
  • Phone, text, and email investment advice and support

 

Wealthsimple Black

  • All Wealthsimple Basic account features
  • Tax-loss harvesting - Wealthsimple’s algorithms will sell securities at a loss and re-buy comparable securities to lower your capital gains taxes
  • Financial planning with an advisor
  • VIP airline lounge access through a complimentary Priority Pass membership, a $399 annual value

 
Accounts with a balance below $5,000 are not charged any management fee. Wealthsimple Basic accounts charge a competitive 0.5% management fee. Wealthsimple Black accounts charge a 0.4% management fee. There are no other fees for using Wealthsimple. This straightforward pricing is easy to understand and can save you tens of thousands of dollars compared to traditional investment management costs.

Bottom Line

Wealthsimple’s most powerful feature is how simple it is to understand and use. Just choose your account type and one of the three portfolios and Wealthsimple takes care of the rest. You can always reach a person if you need additional support getting setup or choosing your portfolio. Plus your account is secure and insured by the SIPC (kind of like the FDIC for investing) up to $500,000.

Wealthsimple is not the cheapest robo-advisor platform, but it does cost significantly less than actively managed portfolios or even the fees charged by many mutual funds. With an easy-to-use, trustworthy investment platform, Wealthsimple is a great choice for anyone looking to make money in the markets without having to be a stock picking expert or someone looking for a passive method to save for retirement while taking advantage of powerful robo-advising features. If that sounds like you, give it a try today.



Wealthsimple Reviews

Investor Junkie 2017-03-03

Wealthsimple is a solid addition to the current slate of robo-advisors available. The service offers a socially responsible investment option, as well as assistance from a live representative. However, compared other firms their fees are on the high side.