There is a chance that someone told you about WEALTHSIMPLE and you’re trying to get more info about the investment platform before signing up or maybe you’re just looking for the opportunity to start planning for your retirement/future and you simply stumbled upon this Wealthsimple review on the internet but you’re not sure if it is a good investment platform.
May I say yes you’ve come to the right article that will answer all the questions that you may have about Wealthsimple and how to get smart about saving for your future.
Wealthsimple Inc. is one of the world leading Robo Advisor financial incorporation that was founded by Michael Katchen in Toronto, Canada in the year 2014. The company worth $4 billion in AUM (assets under management) and currently has over 150,000 clienteles as at the month of May 2019.
For the benefit of folks that are new to the term Robo Advisor
Robo Advisor is the designation that is being used for the new fin-tech investment companies. The very first of this type of financial investment platform was launched in the year 2008. They are basically an online or web based trading platform that offers financial services through proprietary fin-tech algorithms.
Unlike most financial service firms like banks, credit union, insurance companies etc., Robo Advisors are typically known for a very little human interaction as their financial processes are mainly automated as they are tech based.
Company Name: Wealthsimple
Owner: Michael Katchen
Management Expense Ratio (MER): Wealthsimple basic 0.5%, Wealthsimple Black or Generation 0.4%
Investment Ranking: 9.9/10
Before Wealthsimple was started, Michael Katchen worked at a Silicon Valley start up and was vocal on DIY investing advice to his friends and workmate. He decided to start wealthsimple with a sole goal of bringing smarter financial services to the masses regardless of their ages, race or net worth.
With team of world class and quality financial specialist Wealthsimple is well-equipped to manage their client’s investments prudently. The majority of their employees such as accountants, financial advisors, software engineers, web designers, data scientists etc. have years of work experiences from financial & tech companies such as RBC, Amazon, Yahoo, Google, Apple etc.
Wealthsimple currently operates in Canada, Europe and USA, and they happens to be the largest Robo Advisor in Canada before expanding to the USA in 2016. That was a huge achievement considering the fact that they competed with the likes of Robo Advisors such as Nest Wealth, BMO Smartfolio etc. to attain that top feat in Canada.
Wealthsimple has a strong financial history and is backed by one of the leading financial service companies in Canada – Power Financial Group.
In a nutshell, Wealthsimple are expert in what they are doing with their client’s money and they have an ethical relationship of trust to their investors.
PROs and CONs of Wealthsimple
- $0 account minimum requirement
- $10,000 would be managed for free if you register through Wealthdowntown promo link
- Socially responsible investing
- Reasonable and competitive MER fees (Cheaper than all the regular banks)
- Investment simplicity
- A broad investment selections
- Access to financial advice from seasoned portfolio managers
- Backed by Power Financial Group
- Automatic tax loss harvesting for the Black and Generation account holders
- Limited personal contact
- Limited portfolio options
How does Wealthsimple work?
The approach employed by Wealthsimple to manage their clients investment is quite simple and even suitable for a new investors or for veteran investors that is seeking for an alternative to traditional money managers.
The Wealthsimple investment managers typically gathers client’s financial information like their current financial situation, retirement goals & objectives etc. The Robo Advisor company then utilizes her proprietary financial tools and algorithms to analyze the client’s financial data. After this step, the financial advisor then auto creates financial advice and auto invest the client’s funds for optimal return.
In contrast to the early days of Robo Advisor companies where they were primarily being used as a rebalancing instrument and monopoly within the traditional investment space, they are now generally available for robust financial services and can even provide smart financial deliverables in a quite complex space.
I want to mention that Wealthsimple are quickly becoming a new investor’s smart tool of choice when it comes to retirement planning and tax loss harvesting opportunity.
At the time of writing this article, the Robo Advisors have approximately $100 billion in total AUM (assets under management) in the USA. Even though the total AUM for Robo Advisors in Canada is currently unknown, Wealthsimple is one Robo Advisor establishment that has been flourishing than others within the public financial space.
Another thing that set Wealthsimple ahead of all other Robo Advisor companies is their focus on social accountability as they offers their clients the option to invest in SRI (Social Responsible Investing) portfolio that include companies with low carbon foot print, environmental & societal concerns, and human rights.
Wealthsimple Account Types
There are three different types of accounts that Wealthsimpe offers. The Basic, Black and Generation investment accounts. The Basic account is intended for the new investors while the Black & Generation accounts are targeted to attract high net worth seasoned investors.
The Wealthsimple Basic
The two top reasons why new age investors are choosing Robo Advisors over traditional type of investing is because of their low management fees and convenience. In addition to those two reasons, Wealthsimple also holds a very strong points to attract clients because they require no minimum balance for their Basic account.
This factor is particularly attractive to people that are just starting out in the investment world and as well important to the folks that are not new to investing but don’t have huge sums of money to invest at the moment.
Also, Wealthsimple’s management fee structure is uncomplicated.
The Basic account holders are charged a flat investment management fee of 0.5%. Be informed that there are no further hidden costs to investors. Transactions such as withdrawals, deposits, transfers, ETF trading or re-balancing are all charges free. The 0.5% MER is classic and very competitive with other Robo Advisors in Canada, USA and Europe.
Another very cool thing about Wealthsimple is that there are no management fees for the first $10,000 if you register through the Wealthdowntown promo link below.
After signing up, you as an investors will receive a personalized portfolio according to your risk level and an automatic rebalancing to ensure your investments stay within your targeted allocation.
Similarly, dividends from invested funds are automatically reinvested for investors and they will also have the option to set up an auto depositing of any amount of their choice from their financial institutions.
Lastly, Wealthsimple investors have the opportunity to speak with a financial advisor at any time if they require to talk about their investment or financial situation.
The Wealthsimple Black
The Wealthsimple Black account is targeted towards the seasoned/veteran investors and it does requires that investors invest $100,000 or more.
One good thing about the Black account investment is that investors would pay lower MER fee of 0.4%.
In addition to the good stuffs, the Black acount investors have access to further tax features such as tax efficient funds and tax loss harvesting. Note that Black account Investors also have access to arrange a free financial planning sessions for their investments with financial experts of the company.
You can set up a Black account with Wealthsimple by clicking the below link
Lastly, the Black account investors are also entitled to receive a complimentary VIP airline lounge access to over 1000+ airline lounges worldwide across 500 cities through Priority Pass – this is worth a $450 US in value. You can read more about this add on Priority Pass from here – PRIORITY PASS DETAILS
Conclusively, the Wealthsimple Black account does offer a lot of nice perks for investors and especially the 0.4% MER is awesome but the overall advantage of Wealthsimple still lies with the simplicity of their investing process. This is to say that I wouldn’t have joined Wealthsimple just because of their Black account features but I did join them because of their overall quality.
The Wealthsimple Generation
This Wealthsimple account tier is designed to benefit investors with a larger than $500,000 investment amount. This would be ideally suited for a combined family account size that is more than $500,000.
It features a lot of good perks that would take investor’s finances to the next level, giving them access to the perks of Wealthsimple Basic & Black and more features such as below.
- Wealthsimple in depth financial planning and advising
- Customized portfolios that are tailor made for investor
- A personalized end of the year financial reporting that comes with income planning in retirement
- Access to a personal financial advisors
- A 50% off a comprehensive health plan from Medcan insurance
- Register here to read more about Wealthsimple Generation
Wealthsimple Portfolio Options
At Wealthsimple, there are three main portfolio options:
- Conservative Portfolio: This option is absolutely weighted towards low volatility bonds. About 70% of conservative holdings are in government bonds, high-yield bonds, and short-term bonds. This portfolio is absolutely designed for low risk investors who prefer stability and a modest return.
- Balanced Portfolio: This option has a 50% bonds and 50% equities. The portfolio is suitable for low to medium risk investors.
- Growth Portfolio: This option is heavily weighted towards stocks. About 80% to 90% of growth holdings are in emerging markets, foreign stocks, Canadian stocks, US stocks, dividend stocks, and real estate. The portfolio is mainly designed for high risk investor with medium to high risk investment tolerance.
Be informed that during registration process, investor will be asked to complete a questionnaire designed to match them with one of the 3 portfolio options.
The 3 portfolio options each have an asset allocation formulated to suit the risk tolerance and the investment time horizon. The portfolios are built with ETFs and this allows Wealthsimple to build a mixed portfolio without incurring a lot of cost for continuously buying, selling, and re-balancing.
Some Wealthsimple Details At Glance
Hey folks, there are more than enough reasons why Wealthsimple are named the best Robo Advisor in Canada. Some of the reasons are because of their exceptional features and the second to none financial service that they are providing to their clients in Canada, USA and Europe.
Minimum Investment Amount: No minimum amount id required
Basic Account Fee: 0.5% MER
Black Account Fee: 0.4% MER
Generation Account Fee: 0.4% MER
Accounts under the Wealthsimple Basic/Black: TFSA, RRSP, RESP, RRIF, Personal, Joint, LIRA, Smart Savings, Corporate etc.
Financial Advice Means: Automated through wealthsimple application, email and over the phone
Tax Loss Harvesting: It is available for the basic on request but automatic for both Black and Generation account holders
Automatic Portfolio Rebalancing: Yes, it is available feature for all clients
Automatic Investment Deposit: Yes, it is available feature for all clients
Fractional Shares: Yes, it is available feature for all clients
Socially Responsible Investing: Yes, it is available feature for all clients
Portfolio Access: Through phone, online log in or mobile app
Customer Services: Yes, it is available feature for all clients
Halal Investing: Yes, it is available feature for all clients and it complies with Islamic law
Transfer Fees: You will be credited back the cost if your transfer is over $5000
WealthDowntown Promo: Have $10,000 of your investments managed for free for a year
Wealthsimple Sign Up Process
Based on my personal experience when I did my account set up, it took me less than 20 minutes to create my Wealthsimple account and this is way more faster than lengthy time I used to spend with traditional financial expert in the bank.
Listed below are all that would be needed to set up a Wealthsimple investment account:
- Investor’s name, date of birth and social insurance number
- Investor’s email address
- Investor’s phone number and contact address
- Your online banking details to link your bank with Wealthsimple for auto investment deposit
Here is what you will need to do to sign up:
- Completely fill out an online application.
- Verify and connect a bank account by securely authenticating your online banking.
- Boom you are all set! Your Wealthsimple account should be all ready in less than 3 business.
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Wealthsimple Review: Final Verdict
Wealthsimple is my #1 recommended platform when it comes to best robo advisor in Canada – For over 4 years that I have been dealing with them, they’ve offered me just excellent services and competive fees.
As mentioned earlier, their basic portfolios are built from a cost effective ETF portfolios that minimize costs and volatility.
Also, their platform is very user friendly. It is very easy to use and even accessible on mobile devices.
More so than anything else, Wealthsimple excels by offering a competitive fee for basic account, great value on their large accounts through the Wealthsimple Black and Generation.
Conclusively, Wealthsimple is ideal for an average investor and stands out as a well respected Robo Advisor that you can trust with your hard earned money.
I hope article will help someone out there and if you have any questions, just leave a comment below and I will be more than happy to help you out.
Happy Investing guys!