For years, I envied Americans because they had access to the commission-free stock trading Robinhood app. Canada might finally have the answer to Robinhood with Wealthsimple Trade.
Wealthsimple Trade is a platform where you can make commission-free trading for your stocks and ETFs. It made my list of one of the best trading platforms in Canada.
Note that I didn’t say “completely” free. It’s important to read the fine print as your trades could potentially still have some costs baked into them.
We’ll cover this and more in this Wealthsimple Trade review.
- Commission-free trades on both buy and sell-side
- For Canadian stocks and ETFs, all trades are free.
- Simple to sign up
- TFSA and RRSP available to use
- Easy to use and looks fantastic
- Can’t buy bonds, international equities, or GICs
- Not completely “free” if you trade U.S stocks or ETFs
- RESP, RRIF, and LIRA aren’t available to trade
- Only available on mobile and not desktop
Table of Contents
What is Wealthsimple Trade?
Wealthsimple Trade is one of the products that is offered by… yup, you guessed it, Wealthsimple.
In case you haven’t heard about Wealthsimple, it started out as an online investment management service in 2014 (popularly known as a “Robo-advisor”).
Wealthsimple has since added products where you can earn interest in a savings account, or even file your taxes. Today, Wealthsimple holds over $5 billion in assets for customers all across Canada.
Wealthsimple Trade is one of the products of Wealthsimple. The platform allows you to make commission-free stock and ETF trades on major Canadian and U.S exchanges. Thousands of stocks and ETFs are available for Canada and the U.S.
Is Wealthsimple Trade Safe and Legit?
Wealthsimple passes the legit test with flying colors. Here are a few of the security measures:
Your Wealthsimple Trade account will be held with a custodial broker called Canadian ShareOwner. You will be protected by CIPF on your deposits, and according to its website is $1 million for most accounts.
It offers encryption of all data and a two-factor authentication (2FA) protection option.
Wealthsimple has $265 million in investments from large institutional investors.
How Does Wealthsimple Trade Make Money?
You might be wondering to yourself, what’s the catch? How does Wealthsimple Trade make money if they don’t have any fees? Here’s how the company makes money on Wealthsimple Trade:
- For any U.S trades, each trade will cost you 1.5% commission. Most brokerages charge something similar, or more. For example, Questrade charges up to 2%, which they are a lot less transparent about. For this reason, I would stick to trading just Canadian stocks and ETFs as these foreign exchange commissions are huge for all platforms.
- Wealthsimple doesn’t advertise this, but I’m going to guess they also earn interest on any cash that you are holding in your Weatlhsimple Trade account, similar to Robinhood’s business model.
- By offering free trades, Wealthsimple will attract many new investors who will want to purchase its other products.
Wealthsimple Trade Login and Register
Wealthsimple has made it super simple to sign up for Wealthsimple Trade. Currently, you can only use Wealthsimple Trade on your mobile devices and not on desktop computers. Here are the steps to registering:
- Register for a Wealthsimple account
- Download the Wealthsimple Trade app on Android or IOS from the Play Store or Apple App Store.
- Sign in to the app
- Choose your TFSA, RRSP, or non-registered account
- Fund your account
- Start making $0 commission trades!
You can contact the Wealthsimple Client Success team at 1-855-255-9038 or by submitting a online request here.
Wealthsimple Trade TFSA and RRSP
You can use Wealthsimple Trade in your registered TFSA and RRSP accounts. Remember that it’s always wise to transfer in-kind for your TFSA if you’re funding the account from another institution. This will avoid you accidentally overcontributing and getting penalized.
Also note that even if you have a Wealthsimple TFSA already opened from your Wealthsimple Investing account, you’ll need to open another TFSA account specifically for Wealthsimple Trade.
Questrade vs Wealthsimple Trade
Here are the comparisons for Questrade vs Wealthsimple. As you can see, Questrade has a more robust platform for investors and is likely a better option for DIY investors.
If you’re sticking to ETFs and stocks, Wealthsimple Trade will be the cheaper solution with $0 commissions for both buying and selling. Wealthsimple Trade is also a newer platform, and will likely add features in the future.
|Account Types||TFSA, RRSP, RESP, LIRA, RIF, LIF, personal (non-registered), margin||TFSA, RRSP, personal (non-registered)|
|Minimum Balance to Invest||$1,000||$0|
|Types of Investments Available||ETF, Stocks, Bonds/GICs, International Equities, Precious Metals||ETFs, Stocks|
|ETF Fees||Buy $0 Sell: $4.95 – $9.99||Buy and Sell: $0|
|Stocks||Buy and sell: $4.95 – $9.99||Buy and Sell: $0|
Foreign Exchange Fees for U.S trades
Questrade is not as transparent about its foreign exchange fees for buying and selling U.S stocks, which I don’t like. Every time you buy or sell a U.S stock, Questrade charges you about 2%.
The company does not advertise this fact and it is difficult to find this information. Wealthsimple is much more transparent and charges 1.5% for the foreign exchange fee. Both are high, and the costs will eat into any returns you make on your U.S stock trades.
Wealthsimple for Day Trading Canada Stocks
I do not recommend day trading, however, it’s possible with the Wealthsimple Trade platform. As soon as you purchase or sell a stock, your balance is immediately updated, and you can use it again for another trade.
I discourage day trading, as it’s a profession that only a small fraction of people can be successful with. Be extremely cautious about pursuing this path!
Who Should use Wealthsimple Trade?
Use Wealthsimple Trade if:
- You only want to invest in stocks or ETFs as that is all you can trade.
- You are a new Do-It-Yourself (DIY) investor.
- You only have a small amount to invest since there are $0 minimum balance required.
Who Should not use Wealthsimple Trade?
Avoid Wealthsimple Trade if:
- You want a robust trading platform where you can invest in all investment products such as bonds and international equities.
- You want to invest in registered funds that are not your TFSA or RRSP.
It’s awesome to see some more fintech choices for Canadian consumers. Wealthsimple Trade is leading the charge to a more fair playing field for DIY stock investors.
I admire Wealthsimple’s commitment to its customers. The company genuinely seems to care about its customers and is aggressive in providing low-fee options for them. Unlike the big banks and mutual fund companies of Canada.
A similar company I feel it is comparable to is Vanguard. Both companies are doing their best at providing Canadians with better investing options.
It’s time to take the power back as consumers. Saving on fees is a great start.
Each $1 you save today in trading or investment fees should be worth multiple times more in the future.
Let me know if you try Wealthsimple in the comments below.