Wealthsimple Invest vs Wealthsimple Trade (2022)

Wealthsimple is a company that has come along to revolutionize trading for retail investors in Canada

Wealthsimple’s two main products are Wealthsimple Invest and Wealthsimple Trade. Both platforms are related to investing, but they are different in how they operate and can serve different needs.

If you are interested in investing, choosing one of the two platforms might be suitable for your financial goals.

My Wealthsimple Invest vs. Wealthsimple Trade comparison will give you a good look at both investment platforms to help you determine which one is better to meet your investing goals.

Wealthsimple invest vs wealthsimple trade

About Wealthsimple Invest

Launched in 2014, Wealthsimple Invest was the first product launched by Wealthsimple when the company began its operations. It is the main product offered by the fintech company.

Wealthsimple Invest is a robo-advisor that offers you the opportunity to enjoy passive and automated investing.

How It Works

When you join the platform, it asks you to fill out a questionnaire with information about how much you earn, your investment goals, your investment horizon (how long you’re looking to invest), and your risk tolerance.

Wealthsimple Invest uses your questionnaire responses to match you with one of three automated investment portfolios: Conservative, balanced, or growth. Each portfolio comprises a combination of low-cost Exchange-Traded Funds (ETFs) designed to meet its specific goals.

Wealthsimple manages each portfolio for you, rebalancing it by buying and selling funds based on market conditions to keep your portfolio aligned with your investment goals.

With Wealthsimple Invest, you never have to lift a finger to manage your investment capital.

That said, you don’t have any control over your portfolio. Wealthsimple manages how to deploy your investment capital held by the fintech company.

You can even enjoy socially responsible investing options with Wealthsimple Invest and Halal portfolios to ensure that you are investing in products that also align with your values.

See my full review on Wealthsimple Invest here.

Pros
  • Offers automated and hands-off investing
  • Requires zero investing experience
  • A variety of investment options and portfolio types are available
  • Very easy to set up an account
Cons
  • No control over individual investments in your portfolio
  • Can be slightly more expensive than other robo-advisors in Canada

About Wealthsimple Trade

Wealthsimple Trade is the self-directed trading segment of Wealthsimple that the company launched in 2019. Where Wealthsimple Invest is a hands-off approach to investing, Wealthsimple Trade allows you to take the reigns as an active investor with complete control over your portfolio.

With Wealthsimple Trade, you enjoy the convenience of commission-free trades, and you will manage your own investment portfolio based on your investment goals.

There is nothing automated about investing using Wealthsimple Trade, and you’ll have complete control over the stocks and ETFs you can buy.

See my full review on Wealthsimple Trade here.

Pros
  • Offers commission-free trades
  • Easy to set up an account
  • Wide range of stocks and ETFs are available
  • You can purchase fractional shares on some stocks
Cons
  • Not many account types are available
  • High currency exchange charges for US stocks and ETFs

Wealthsimple Invest Vs. Wealthsimple Trade: Investment Accounts Offered

Investment Accounts Offered By Wealthsimple Invest

Wealthsimple Invest offers you access to a wide range of investment accounts that you can choose based on your financial goals, including:

  • Registered Retirement Savings Plan (RRSP)
  • Tax-Free Savings Account (TFSA)
  • Registered Education Savings Plan (RESP)
  • Joint or personal Non-Registered Accounts
  • Registered Retirement Income Fund (RRIF)
  • Locked-In Retirement Account (LIRA)
  • Corporate Accounts
  • Spousal RRSP

Investment Accounts Offered By Wealthsimple Trade

Wealthsimple Trade does not offer you a lot of account types you can use with the self-directed trading platform. However, it does cover the most commonly used account types, including:

  • Tax-Free Savings Account (TFSA)
  • Registered Retirement Savings Plan (RRSP)
  • Personal non-registered investment accounts

The verdict: When it comes to the investment account types available, Wealthsimple Invest is the clear winner because it offers more options than Wealthsimple Trade.

Wealthsimple Invest Vs. Wealthsimple Trade: What Do They Cost?

Wealthsimple Invest Fees

Wealthsimple Invest comes with three separate fee structures. Wealthsimple Basic is for clients who have net deposits with the platform between $0 and $100,000.

The robo advisor charges you a fee of 0.50% per year of your account value. The fee covers the costs of its services to set up your portfolio, automatic rebalancing, automated dividend reinvesting, and customer service.

Wealthsimple Black is for clients who have an account balance of over $100,000 and less than $500,000. The platform charges you 0.40% of your account value per year.

Besides lower management fees, Wealthsimple Invest also offers extra features for its high-value clients, like tax-loss harvesting assistance and a financial planning session with a financial expert.

Wealthsimple Invest has also introduced another plan called Wealthsimple Generation. This fee structure applies to clients with accounts of $500,000 or more. It charges 0.40% of the account value per year but offers more perks.

You get a customized financial report, tax-loss harvesting assistance, and you get a 50% discount on a comprehensive Medcan health plan. Wealthsimple Invest also optimizes each Wealthsimple Generation account to maximize tax savings.

Wealthsimple Trade Fees

Wealthsimple Trade’s biggest selling point when it came along was that it became Canada’s first commission-free trading platform.

It means that when you buy and sell stocks and ETFs on the platform, you do not have to pay any trading commissions to the platform. Wealthsimple Trade also does not come with any monthly or annual account management fees.

You do not need a minimum deposit to begin trading. There are no inactive account or transfer fees involved. However, Wealthsimple Trade is not entirely free for you to use.

You may have to pay fees only when you buy or sell US-listed securities using your Wealthsimple Trade account. The platform charges you a 1.5% foreign currency conversion fee.

You may also be required to pay $20 if you request a printed account statement. You can also request broker-assisted phone trades through Wealthsimple Trade, but it will cost you $45 to make such a trade.

Here’s a quick look at the fee breakdown of both Wealthsimple platforms to give you a quick comparison of the expenses you can expect to bear while using each platform:

Wealthsimple Invest Wealthsimple Trade 
Management Fees
(below $100,000)
0.50% per yearStock / ETF Trades in CADFree
(no limit)
Management Fees
(above $100,000)
0.40% per yearStock / ETF Trades in USD1.50% per trade
DepositsFree
(no limit)
DepositsFree
(no limit)
WithdrawalsFree
(no limit)
WithdrawalsFree
(no limit)
Monthly FeesFree
(no limit)
Monthly FeesFree
(no limit)

The Verdict: In the Wealthsimple Invest vs. Wealthsimple Trade fees comparison, Wealthsimple Trade is the clear winner when comparing the costs you can expect to bear while using the two platforms.

However, the fees charged Wealthsimple Invest may be worth the cost considering the convenience it offers through hands-off investing, automatic rebalancing, and no charges and limits on withdrawals or deposits.

Wealthsimple Invest Vs. Wealthsimple Trade: Investment Options Available

Investment Options Available On Wealthsimple Invest

Wealthsimple Invest’s portfolios comprise of funds that cover a wide range of securities, including Canadian stocks, US stocks, foreign stocks, and fixed-income assets.

Wealthsimple Invest offers you exposure to a wide range of securities by combining different weightings of the ETFs listed below to align with the conservative, balanced, and growth portfolios.  

    ETF NameTickerDescription
Vanguard Total Stock Market ETFVTI3,800 large, medium, small and micro-cap companies mirroring the US equity market 
iShares MSCI Min Vol Global ETFACWVLarge, mid, and small-cap stocks in developed Europe, Australasia, and the Far East
iShares MSCI Min Vol Emerging Market FundEEMVExposure to 300+ emerging market equities with minimum volatility characteristics
iShares Core MSCI EAFE USDIEFALarge, mid, and small-cap stocks in developed Europe, Australasia, and the Far East in
Shares Core S&P/TSX Capped Composite IndexXIC250+ Canadian equities representing 95% of the Canadian equity market
Vanguard US Total Market ETF (CAD-Hedged)VUSDiversified companies mirroring the US equity market with hedged currency exposure
BMO Long Federal Bond Index ETFZFLLong term debt securities issued or guaranteed by the Government of Canada
iShares Core Canadian Short Term Corporate Bond Index ETFXSHShort-term corporate debt
SPDR Gold MiniShares TrustGLDMShares tracking the value of physical gold bars held in London vaults

Source

Investment Options Available On Wealthsimple Trade

With Wealthsimple Trade, you can invest in individual stock and ETFs that are listed on Canadian and US stock exchanges.

Wealthsimple Trade presently does not offer you the opportunity to directly invest in any mutual fund products, bonds, GICs, or any other fixed-income assets. However, you can invest in ETFs that offer you exposure to those asset classes.

The Verdict – When it comes to comparing investment options available on both platforms, there is no clear winner. Wealthsimple Invest offers you exposure to a broader range of securities but does not offer you any control over the specific investments you can buy and hold in your portfolio.

Wealthsimple Trade offers you the opportunity to invest in only individual stock and ETFs, but it gives you complete control over the investments you can have in your investment portfolio.

Can You Have Both Wealthsimple Trade And Wealthsimple Invest

Yes, you can. Wealthsimple Trade and Wealthsimple Invest are two different products offered by the same company. If you want, you can choose to allocate a portion of your investment capital to a fully automated portfolio of securities managed by Wealthsimple Invest on your behalf.

You can then allocate a portion of your investment capital to creating a self-directed portfolio through Wealthsimple Trade to dabble with investing yourself, while enjoying passive returns through the money invested in your Wealthsimple Invest portfolio.

How To Transfer Money From Wealthsimple Invest To Wealthsimple Trade

You cannot transfer money from Wealthsimple Invest to Wealthsimple Trade, but you can transfer an entire account from Wealthsimple Invest to Wealthsimple Trade.

Suppose that you initially created a Wealthsimple Invest account to start with automated investing through the robo advisor but want to try your hand at self-directed investing.

In that case, you can transfer your account from Wealthsimple Invest to Wealthsimple Trade. You can transfer only a TFSA, RRSP, or a non-registered personal investment account from Wealthsimple Invest to Wealthsimple Trade because these are the only account types available on both platforms.

You have to use the Wealthsimple Trade app to make the transfer. Please note that it’s only possible to transfer accounts of the same type between the two platforms.

For instance, you can transfer a TFSA from Wealthsimple Invest to Wealthsimple Trade, provided that you already have a TFSA open on Wealthsimple Trade. If not, you will have to open an account with Wealthsimple Trade to make the transfer.

The steps to transfer money from Wealthsimple Invest to Wealthsimple Trade is simple:

  1. Sign in to the “Trade” app through your phone
  2. Tap the “Move” tab on the bottom of the screen
  3. Toggle the option from “Money” to “Accounts”
  4. Choose the option to “Transfer from Wealthsimple Invest”
  5. Follow the prompts to select Wealthsimple Trade and make the transfer

Transferring your account can take up to seven business days. You can only transfer an account in its entirety and not a portion of the funds held in each account.

When you place a request to transfer the account, Wealthsimple sells the holdings in your Wealthsimple Invest account, transfers it to your Wealthsimple Trade account, and repurchases the investments to recreate your holdings as they were held in the Wealthsimple Invest account.

You can also transfer a Wealthsimple Trade account into Wealthsimple Invest. While Wealthsimple does not officially support such a transfer within your profile, you can have them do that for you by contacting Wealthsimple’s support team.

Currently, you can transfer funds in cash between RRSPs, TFSAs, and non-registered personal accounts on both platforms.

You can let Wealthsimple’s support team know if you would like the transfer to take place in cash and request a partial transfer between your accounts if you are comfortable with selling your investments to make the transfer.

Conclusion

Wealthsimple Invest and Wealthsimple Trade are two different products offered by the same company. One is a robo advisor, and the other is a self-directed trading platform.

Wealthsimple Invest costs more but offers you a lot more convenience than Wealthsimple Trade in terms of hands-free investing.

Both platforms are excellent methods to deploy your investment capital, but here’s a quick look at who would find each platform more suitable for their investment goals and objectives.

Use Wealthsimple Invest If:

  • You are a new investor who is still learning about investing.
  • You prefer to take a hands-off approach to invest by letting someone else manage your portfolio.
  • You don’t have the time to manage your own investments.
  • You don’t mind paying more for the convenience of hands-off investing.

You can check out my detailed Wealthsimple Invest review here to learn more about one of Canada’s top discount brokers.

Use Wealthsimple Trade If:

  • You are an experienced investor who doesn’t need trading advice or supervision.
  • You have the time to manage your own portfolio.
  • You do not want to pay any management fees.
  • You want to enjoy commission-free trading.

You can check out my detailed Wealthsimple Trade review here to learn more about one of Canada’s top discount brokers. Deciding on the platform to use between the two depends on your personal preference and goals.

I would say using both in a combination could be an excellent way to go.

Check out my Questwealth review if you want to take a look at another robo advisor platform, and my Questrade review if you’re looking for another self-directed trading platform.

Photo of author
Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

Check Out These Posts:

Leave a Comment