Top Wealthsimple Alternatives In Canada
Managing your own investments can be intimidating, but the right tools can make it a more enjoyable experience. Among Canadian investors, one of the most popular online investing platforms is Wealthsimple, a low-cost robo-advisor that offers spending and savings accounts, stock, ETF, and crypto trading, online tax software, and more.
But while Wealthsimple has garnered praise for its simplicity and ease of use, it may not suit all investors. In this article, I’m sharing a list of Wealthsimple alternatives that are worth considering as you search for an online investing app.
Before we get to the list, let’s take a look at what Wealthsimple has to offer.
What Is Wealthsimple?
Wealthsimple has long been considered Canada’s leading robo-advisor, but it’s much more than that. In addition to its managed investing platform, Wealthsimple offers self-directed investing, spending and savings accounts, a cryptocurrency trading platform, free online tax filing, and more. Wealthsimple lives up to its name by delivering products that are easy to understand and simple to use.
Let’s take a brief look at the different services Wealthsimple offers.
Wealthsimple Invest is Wealthsimple’s flagship product. It’s a robo-advisor platform that allows investors to create customized, low-cost investment portfolios without the involvement of a human advisor.
Wealthsimple Trade is Wealthsimple’s stock trading app. With Wealthsimple Trade, you can buy and sell thousands of stocks, exchange-traded funds (ETFs), and cryptocurrencies commission-free. While the platform lacks the advanced tools that other brokers offer, it’s perfect for beginners and self-directed investors looking for low fees.
Wealthsimple Cash is a spending and saving account wrapped into one. It pays a competitive interest rate on the entire balance (up to 5% as of writing), and there are no monthly account fees, transaction limits, or account minimums. When you spend with your Wealthsimple card, you earn 1% back in stock, crypto, or cash. You can send and receive Interac e-Transfers from your Cash account up to $5000 per day. You can also set up your payroll to be directly deposited into your Wealthsimple Cash account.
Wealthsimple Tax is Wealthsimple’s 100% free online tax filing software program. It can handle most tax situations, including new to Canada, self-employment income, investment income, job changes, work from home, etc. And it’s 100% free, although donations are accepted.
Wealthsimple’s investment accounts support the following registration types:
As you can see, Wealthsimple has a lot to offer. Not only do they keep costs low for all of their products, they make it easy to open and maintain accounts. While there is no true equivalent to Wealthsimple in the Canadian market, here are seven alternatives to consider.
6 Wealthsimple Alternatives to Consider
None of the companies on this list do everything that Wealthsimple does, but they all do one or two things. For example, there are a few robo-advisor alternatives and a couple of brands that offer no-fee chequing and savings accounts, similar to Wealthsimple.
Questwealth is the robo-advisor arm of Questrade, one of Canada’s leading online brokers. With Questwealth portfolios, you can invest in the following asset allocations: Conservative Income, Income, Balanced, Growth, and Aggressive Growth.
Questwealth fees are very competitive. For account balances between $1,000 and $99,999, they charge an annual fee of 0.25% on assets under management. If your balance is over $100,000, the fee drops to 0.20%. The underlying ETFs that comprise Questwealth’s portfolios have low MERs, ranging between 0.17%-0.22%. Questwealth does offer SRI portfolios with a slightly higher MER of 0.21%-0.35%.
If your only interest is to invest with a stock trading account and a robo advisor portfolio, then the Questrade-Questwealth combination is as good or better than what Wealthsimple offers. However, unlike Wealthsimple, Questwealth doesn’t offer spending and savings accounts or tax filing capability.
JustWealth is a highly-rated Canadian robo-advisor. It offers a similar service to Wealthsimple Invest, and its target-date RESP account, which allows you to set time-based goals and manage your portfolio accordingly, is an industry leader.
JustWealth’s management fees are much higher than Questwealth’s but only slightly higher than Wealthsimple’s. For account balances up to $500,000, you’ll pay an annual fee of 0.50%. Over $500,000, the fee drops to 0.40%. With Wealthsimple, the fee drops to 0.40% at $100,000.
One major difference between JustWealth and Wealthsimple is the minimum account sizes. With Wealthsimple, you can start with as little as $1, whereas JustWealth requires a $5000 minimum balance on all non-RESP/FHSA accounts. And JustWealth is a robo-advisor-only platform. It does not offer brokerage services, so you cannot buy and sell investments such as stocks and ETFs.
3. BMO Smartfolio
BMO Smartfolio is a low-cost robo-advisor platform offered by the Bank of Montreal. It is an excellent alternative to Wealthsimple if you want a different managed investment option. Smartfolio’s fees range between 0.40%-0.70%, but you must invest $500,000 or more to get the lowest rate (0.40%). The standard fee of 0.70% applies for all balances below $100,000.
According to MER, their average ETF MERs range from 0.20%-0.35% depending on your chosen portfolio. Based on fees alone, Wealthsimple is a lower-cost option than BMO Smartfolio. However, if you are an existing BMO customer and prefer to keep your investments and banking under one roof, then BMO Smartfolio is a worthwhile option.
QTrade is a popular Canadian online broker that allows you to trade stocks, ETFs, mutual funds, and more. But QTrade also has a robo-advisor service known as QTrade Guided Portfolios.
Pricing for Guided Portfolios is higher than Wealthsimple. You’ll pay 0.60% on balances between $2,000 to $100,000, 0.50% on the next $400,000, 0.40% on the next $500,000, and 0.35% on balances over $1MM.
QTrade’s regular ETF MERs are in the 0.15% range or lower. However, their responsible investing portfolios (SRIs) charge a much higher MER of 0.72% – 0.96%.
If you’re a credit union member and want to invest in the stock market, QTrade may interest you. The broker is owned by Aviso Wealth, which is owned by the credit union centrals, Co-operators/CUMIS, and Desjardins. As such, QTrade has a very close partnership with many Canadian credit unions.
5. TD Easy Trade
TD Easy Trade is a service of TD Direct Investing, Canada’s largest online brokerage. It’s a user-friendly investment account that is designed specifically for beginner investors. Users receive 50 commission-free trades per year. It’s a great option if you’re starting out on your investment journey and want to gain experience with a simple, easy-to-use platform.
TD Easy Trade is similar to Wealthsimple Trade, which also offers commission-free trading via a mobile app. And while TD limits free trades to 50 per year, that’s more than enough trades to satisfy most investors.
If you want to start investing and are looking for an alternative to Wealthsimple Trade, TD Easy Trade should be high on your list. But if you need other services, like a robo-advisor service or free banking, you’ll have to look elsewhere.
Tangerine is the digital banking arm of Scotiabank. It’s long been considered one of the leading online-only banks in Canada, due to its wide range of innovative banking products. Tangerine offers no-fee chequing and savings accounts, cash back rewards credit cards, GICs, mortgages, and loans. They offer a generous welcome bonus to new chequing and savings customers and free access to Scotiabank’s massive ATM network.
While Tangerine doesn’t offer a robo-advisor, they do have investment funds and low-cost ETFs that are globally diversified. The minimum purchase amount is only $25, and the MERs are reasonable.
If you’re looking primarily for an online banking solution, Tangerine is an excellent alternative to Wealthsimple. However, if you want robo-advice or need a discount broker, there are more suitable options.
Final Thoughts on Alternatives to Wealthsimple
While a few come close, no other company does exactly what Wealthsimple does, making them unique in the Canadian financial services industry. That said, not everyone needs all of the services that Wealthsimple provides. If you’re looking for one specific product, such as a robo-advisor, online brokerage, or a no-fee high-interest savings account, several Wealthsimple alternatives may fit the bill.
But if you’re interested in 3 or 4 different products, including day-to-day banking, investing, crypto trading, or perhaps online tax filing, then Wealthsimple is your best option.
Ultimately, it’s all about finding the right fit for your investment strategy and preferences. Don’t be afraid to try out different platforms, as you can always switch providers later if you find a better match.
What are the downsides of using Wealthsimple?
While Wealthsimple has a lot to offer, it’s not for everyone. For example, Wealthsimple Trade has a limited selection of investment options, not to mention market research tools, compared to top brokers like TD Direct Investing, Interactive Brokers, or QTrade. This might be an issue for more experienced investors seeking diverse and advanced investment options.
Are there any platforms similar to Wealthsimple for investing?
The closest comparisons to Wealthsimple Invest are other robo-advisors, like QuestWealth, JustWealth, or BMO Smartfolio. TD Easy Trade is a mobile trading app that provides 50 free trades per year and is clearly designed to compete with Wealthsimple Trade.
Is Wealthsimple better than traditional banks like TD for investing?
Comparing Wealthsimple to traditional banks is a bit of an apples-to-oranges comparison. While there are similarities, there are also many differences. Whether it’s better depends on your individual investment preferences and needs. For a casual investor looking for a simple, user-friendly, and low-cost platform, Wealthsimple might be the better choice due to its commission-free trading and accessibility.
On the other hand, bank brokerages offer comprehensive research tools, trading platforms, and investment options that might better suit experienced investors and active traders. It’s essential to weigh the pros and cons of each platform, considering factors like fees, accessibility, customer support, and investment options, before you make a final decision.