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 trading platform (a.k.a discount broker) where you can make commission-free trades when buying and selling your stocks and ETFs.
It made my list of one of the best trading platforms in Canada.
The $0 commission trading is only one of Wealthsimple Trade’s killer features. We’ll cover this and more in this Wealthsimple Trade review.
Trading Platform / Discount Broker
- Killer feature: $0 commission stock and ETF trades
- Fractional shares on select stocks
- Cryptocurrency trading available
- Commission-free trades when buying or selling stocks and ETFs
- Can buy fractional shares on select stocks such as Microsoft, Netflix, and Tesla
- Plus subscription available to access a USD account
- Can purchase cryptocurrencies
- Simple to sign up
- TFSA and RRSP
- Easy to use and looks fantastic
- Can’t buy bonds, international equities, mutual funds, or GICs
- High foreign exchange fees if you trade U.S stocks or ETFs without a Plus subscription
- RESP, RRIF, and LIRA, and other registered accounts aren’t available
What is Wealthsimple Trade?
Wealthsimple Trade is one of the products that is offered by… yup, you guessed it, Wealthsimple.
Wealthsimple started out as an online investment management service in 2014 (popularly known as a “Robo-advisor”).
Wealthsimple Trade is one of the main products of Wealthsimple and has over 1.5 million users so far.
The trading platform’s claim to fame allows you to make commission-free on major Canadian and U.S exchanges, with a selection of thousands of stock and ETFs. You can also purchase cryptocurrencies using the platform.
Today, Wealthsimple is one of the hottest fintech companies in Canada, with a recent valuation of $5 billion.
Wealthsimple has also added products where you can earn interest in a savings account, file your taxes, and trade stocks.
To me, Wealthsimple is a company that listens to its consumers. Its is one of the most innovative fintech companies in Canada when it comes to launching new financial products.
Wealthsimple Trade Features and Benefits
Here are the features that I feel that make Wealthsimple stand out from the crowded Canadian discount broker market:
1. Wealthsimple Fees
Wealthsimple fees are second to none in Canada. Let’s go over it here:
$0 Commission Free Trades
Fees are one of the most important factors in choosing a trading platform in Canada. I buy and sell stocks and ETFs on Wealthsimple Trade, and it’s always satisfying to see that $0 in commission.
Here’s a recent trade I did, a purchase of Vanguard VXC ETF, and the trade confirmation PDF confirms that it is indeed $0 in commission:
Depending on how much you trade, as compared to many other brokers in Canada, you can be looking at saving hundreds or even thousands of dollars per year.
Foreign Exchange Conversion Fees
The Wealthsimple basic plan does not have a USD account, so I don’t recommend you to buy and sell U.S stocks or ETFs unless you have the Plus subscription (see the section below). You’ll be hit with a 1.5% foreign exchange fee on each trade. Here’s an example that illustrates this:
Example: FX Fees With No USD Account
Jason wants to buy $1,000 CAD worth of shares from Company X.
– He converts the $1000 CAD to USD and buys the shares and incurs a 1.5% foreign exchange fee = $15 CAD fee
– He sells the shares in USD and it’s automatically converted to CAD a few days later and incurs a 1.5% foreign exchange fee (assuming it’s worth $1,000 CAD at that time)= $15 CAD fee
– He repeats this over the course of a year ten times, with $30 CAD in fees each time.
Total Fees = $300 CAD in foreign exchange fees in one year.
As you can see, not having a USD account and trading US stocks frequently can lead to some huge fees, which will put a large dent in your returns.
Wealthsimple has a plus subscription (see below), which will solve this problem.
This is a really neat feature introduced by Wealthsimple in 2021. If you’re low on funds but you still want to build a portfolio of big-name stocks, you can do it with fractional shares.
You can buy a piece of a stock, whether it’s 25% of a share, 10%, or even less. . Here is the full list of names available to purchase fractional shares through Wealthsimple, the tech stocks in America are particularly interesting to me:
- Toronto Dominion Bank
- Royal Bank of Canada
- Canadian National Railway Co.
Check out the Wealthsimple website to see an updated list of any available fractional share companies
3. Buy and Sell Cryptocurrencies
Wealthsimple Trade offers crypto trading on its platform. You can purchase dozens of cryptocurrencies, including big names ones such as Bitcoin, Ethereum, Doge, and Litecoin. Here’s a complete list of cryptocurrencies you can buy on the platform.
Its crypto trading fees aren’t exactly the lowest in Canada at 1.5% – 2% per transaction. But with all the fraudulent crypto exchange scams that have been popping up recently, a company’s reputation and backing might be worth paying this extra charge.
I would say the chances of Wealthsimple stealing your crypto assets are extremely low given its reputation, track history, and financial backing from large financial institutions. And this is a huge plus in the Wild West world of crypto investing.
Crypto assets bought on the platform are regulated by the Canadian Securities Administrators’ Regulatory Sandbox, but you should be aware that they will not be CDIC or CIPF insurance protected.
You can also create your own crypto watchlist on the platform, see mine here:
4. Wealthsimple Trade Plus Subscription: Trade U.S Stocks With No FX Fee
Wealthsimple will be launching the Wealthsimple Trade Plus subscription, at $10 a month soon. Here’s how it works:
Example: FX Fees With A USD Account
Jason wants to buy $1,000 CAD worth of shares from Company X.
– He converts the $1,000 CAD to USD, and incurs a 1.5% foreign exchange fee = $15 fee
– He buys stocks with USD in his USD account and incurs $0 in foreign exchange fees.
– He buys and sells within his USD account ten times throughout the year = $0 fee
– At the end of the year, he sells all his U.S stock and converts it from USD to CAD, and incurs a 1.5% foreign exchange fee (assuming it’s worth $1,000 CAD) = $15 CAD fee
Total Fees = $30 CAD in foreign exchange fees in one year
Since you have a USD account, you only have to pay FX fees when you buy or sell stocks or ETFs. Some other features of Wealthsimple Trade Plus are:
- Instant deposits of up to $5,000
- Price-change alerts (unlimited)
- Snap quotes for real-time, on-demand prices
See my full Wealthsimple Trade Plus subscription guide to learn more.
5. Instant Deposit
You can deposit up to $1,500 instantly into Wealthsimple Trade. Usually, it takes a few days for most brokers so this is a nice feature.
When Wealthsimple Trade Plus launches if you purchase a subscription you can instantly deposit up to $5,000.
Wealthsimple Trade Accounts Available
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.
The TFSA and RRSP are the only registered accounts available for Wealthsimple Trade at this time.
Wealthsimple Trade Non-Registered Account
You can use Wealthsimple Trade for your personal non-registered accounts.
Is Wealthsimple Trade Safe and Legit?
Wealthsimple passes the legit and safety standards 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?
A big part of the reason it’s able to offer $0 trading fees is that it has low overhead since it has no brick-and-mortar retail branches.
Trading fees are not a huge moneymaker for trading platforms anyways. It’s similar to how ATM withdrawal fees are not a big revenue stream for banks.
Some ways that Wealthsimple makes money are on its currency conversion fees, and bid-ask spreads for each trade.
Here’s how the company makes money on Wealthsimple Trade:
- For any U.S trades with the basic plan, each trade will cost you a 1.5% commission. Most brokerages charge something similar, or more.
- Wealthsimple doesn’t advertise this, but I’m going to guess they also earn interest on any cash that you are holding in your Wealthsimple Trade account, similar to Robinhood’s business model.
- Subscription fees from its Plus account
- By offering free trades, Wealthsimple will attract many new investors who will want to purchase its other products.
If you want to learn more about this, check out my in-depth write-up on how Wealthsimple makes money.
Wealthsimple Trade Login and Register
Wealthsimple has made it super simple to sign up for Wealthsimple Trade. You can use Wealthsimple Trade on both your mobile devices and desktop computers. Here are the steps to registering:
- Register for a Wealthsimple account and get a $50 signup bonus
- 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 an online request here.
Wealthsimple Trade Alternatives
Wealthsimple Trade vs Questrade
Here are the comparisons for Questrade vs Wealthsimple. 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 the 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|
|USD Account||Yes||Yes, with a Plus subscription.|
Both of these platforms are excellent and I’ve used each of them extensively. If you’re sticking to ETFs and stocks mostly, I would recommend Wealthsimple over Questrade.
However, if you need additional registered accounts outside of the TFSA and RRSP, Questrade will probably have you covered. To learn more, I do a full in-depth comparison on Questrade vs Wealthsimple here.
Wealthsimple Trade vs TD Direct Investing
Unless you already bank with TD Bank, I don’t see much of a reason why I would choose TD Direct Investing over Wealthsimple Trade. The fees with TD are quite high at between $7-$9.99 per trade, and with Wealthsimple it is $0. My clear pick would be Wealthsimple for this.
Wealthsimple Trade vs Wealthsimple Invest
A lot of people get confused about the difference between Wealthsimple Trade and Wealthsimple Invest. Wealthsimple Trade is the Do-It-Yourself (DIY) platform if you want to buy ETFs and stocks on your own. An advantage of this is that it is generally cheaper. Wealthsimple Invest is a robo-advisor that will construct a portfolio of ETFs for you.
Wealthsimple Trade 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!
Wealthsimple Trade Social Proof
Add stuff here, from Reddit, Google reviews, etc
Who Should use Wealthsimple Trade?
Use Wealthsimple Trade if:
- You mainly want to invest in stocks or ETFs traded on Canadian or American exchanges
- You are a new Do-It-Yourself (DIY) investor.
- You only have a small amount to invest since there are $0 minimum balance required.
- You want to invest as cheaply as possible
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.