The rise of online trading platforms has made it far easier for Canadians to begin investing. When deciding where and how to invest your money, conducting your due diligence is necessary to find the solution that works best for you.
Wealthsimple and TD are two very popular companies that you could consider using. The question is: Which trading platform is better?
This Wealthsimple Trade vs. TD Direct Investing comparison guide will give you a complete picture so you can make a well-informed decision about which platform to use when you start investing.
About Wealthsimple Trade
Wealthsimple Trade is one of the products offered by Wealthsimple, a fintech company that began as an online investment management service through its robo-advisor service in 2014.
Wealthsimple launched Wealthsimple Trade as its self-directed trading platform that allows you to trade a wide selection of Canadian and US stocks and (Exchange-Traded Funds) ETFs without paying any commissions.
You can also use the platform to purchase various cryptocurrencies. Wealthsimple is one of the most innovative fintech companies in Canada, and it has led the charge in launching new financial products in the country.
Wealthsimple Trade was the only commission-free trading platform when it launched. The low-cost platform is also popular because it doesn’t charge any membership fees, withdrawal fees, or account management fees.
Pros
- Offers commission-free trades for buying and selling stocks and ETFs
- Offers excellent promotions
- It is an intuitive platform that’s easy to use
- Offers excellent educational resources for new investors
Cons
- Limited investment types available with the platform
- Limited account types available with the platform
About TD Direct Investing
TD Direct Investing is one of the latest discount broker platforms in Canada. TD Direct Investing is the online discount broker arm of TD Bank, one of Canada’s largest financial institutions.
The Toronto-Dominion Bank is one of the world’s leading financial services firms, and TD Direct Investing is a broker offered by one of the most reputable banks in the country.
TD Bank’s discount broker might be new, but it was one of the first online brokers in Canada when it introduced WebBroker in 1996. TD Direct Investing is its latest offering in the space that it launched in 2011, allowing its clients to trade on a variety of platforms.
Pros
- Excellent app with free real-time stock info
- Wide range of account types available with the platform
- A broader number of securities available with the platform
- Boasts very good customer service
Cons
- Charges substantial account management fees
- No commission-free trades for stocks and ETFs
Wealthsimple Trade Vs. TD Direct Investing: What Do They Cost?
This section of my Wealthsimple vs TD Direct comparison will cover the different expenses you can expect to pay while using both platforms as a self-directed trader to help you determine which one is the more cost-effective option.
Wealthsimple Trade Fees
Wealthsimple Trade came along as Canada’s first commission-free trading platform and it has no competition regarding its fee structure primarily because it barely charges you for anything.
Commission-free trades mean that you do not need to pay Wealthsimple Trade any percentage of your trades as commission. There are no flat-rate charges for trades either.
Wealthsimple Trade does not come with any recurring membership fees, withdrawal fees, or other account-related expenses. Wealthsimple Trade also doesn’t come with a minimum amount you should have to begin trading using the platform.
However, it is not an entirely free platform. You can expect to face some charges using Wealthsimple Trade in particular situations. For instance, Wealthsimple offers US dollar accounts through Wealthsimple Plus, a subscription program that costs $10 per month.
You can also expect to pay $45 if you choose to work with a broker through its broker-assisted phone trade. Requesting any paper account statement will incur a $20 charge.
The Wealthsimple basic plan does not offer a US dollar account. It means that if you buy and sell US-listed stocks or ETFs through it, you will have to pay a 1.5% foreign currency exchange fee on each trade.
Wealthsimple Plus subscription lets you open a US dollar account that allows commission-free trades for US-listed securities.
TD Direct Investing Fees
TD Direct Investing is a popular platform because of its association with one of Canada’s largest financial institutions. Much like what you can expect with the traditional institutions, there is a slew of expenses you can expect to contend with while using TD Direct Investing, including:
Trading ETFs and Mutual Funds
TD Direct Investing does not offer commission-free trades for ETFs through the platform. It charges a flat rate of $9.99 per trade when you place an order to buy or sell ETFs through the platform, making it quite expensive to trade ETFs through the platform.
TD Direct Investing does not charge any commissions to help you buy, sell, or switch mutual fund products through the platform.
Stock Investing Commissions
TD Direct Investing does not offer commission-free trading for stocks through the platform either. Trading equity securities through TD Direct Investing comes with a $9.99 flat-rate charge for every trade.
Active traders who use their accounts to make over 150 trades per quarter get a discount and have to pay a flat rate of $7 per trade. This is a massive discount from TD Direct Investing’s previous $45 flat-rate fee, but considerably more expensive than other platforms.
Options Trading Commissions
TD Direct Investing also lets you trade options through the platform, a feature unavailable with Wealthsimple Trade. Options trading through TD Direct Investing also comes with a flat-rate charge of $9.99 per trade plus $1.25 per contract.
Active traders with over 150 trades per quarter have to pay $7 per trade plus $1.25 per contract.
Other Expenses With TD Direct Investing
TD Direct Investing comes with a host of various other expenses, including:
- Stock certificate delivery fee: $56.50
- Stock certificate processing fee: $500
- Broker-assisted trades: $43
- Fund withdrawal fee: $150
- Account fees: $25 per quarter (but it is waived for active traders)
Winner: Fees
A quick look through this section clearly indicates that Wealthsimple Trade is the winner when it comes to offering you a more cost-effective method to begin trading. The platform virtually charges you nothing compared to TD Direct Investing, which seems like it charges you something for everything.
The low-cost fee structure for Wealthsimple Trade is one of its biggest winning features because it helps you enjoy more of your investment returns by minimizing the amount you have to pay the platform.
TD Direct Investing offers plenty of features that make it a strong option to consider, but it comes at a much higher expense for every feature.
Wealthsimple Trade Vs. TD Direct Investing: Investment Options Available
This section of my Wealthsimple Trade vs. TD Direct Investing comparison guide will cover the various investment options available for you through the two platforms.
Investment Options Available With Wealthsimple Trade
Wealthsimple Trade’s primary claim to fame has been its commission-free trading. Another reason for its increasing popularity is the simplicity with which you can become a trader through the platform.
Wealthsimple Trade offers you the opportunity to purchase stocks, ETFs, and crypto through the platform. Many investors might find that adequate and straightforward, while others may consider that a drawback.
Investment Options Available With TD Direct Investing
TD Direct Investing is the discount brokerage arm of a large financial institution. Accordingly, the discount broker does not limit your options. TD Direct Investing offers a full range of investment options that include:
- Stocks
- ETFs
- Mutual funds
- Bonds
- Guaranteed Income Certificates (GICs)
- Options
- Money markets
- Initial Public Offerings (IPOs)
- T-Bills
TD Direct Investing does not offer the ability to purchase fractional shares as Wealthsimple Trade does. On Wealthsimple Trade, you can buy and sell fractional shares for certain eligible stocks, allowing you to invest with smaller amounts of money. TD Direct Investing, being a more traditional brokerage platform, requires investors to buy whole shares of stocks.
Winner: Investment Options
TD Direct Investing is the clear winner here. The discount broker offers far more investment options compared to Wealthsimple Trade.
Wealthsimple Trade Vs. TD Direct Investing: Investment Accounts Available
This section of my Wealthsimple Trade vs. TD Direct Investing comparison guide will cover the different accounts available through the platforms for you to trade.
Accounts Offered by Wealthsimple Trade
- Tax-Free Savings Account (TFSA)
- Registered Retirement Savings Plan (RRSP)
- Non-registered personal investment accounts
Accounts Offered by TD Direct Investing
- Margin Accounts
- Non-registered personal investment accounts
- Tax-Free Savings Account (TFSA)
- Registered Retirement Savings Plan (RRSP)
- Registered Educations Savings Plan (RESP)
- Locked-In Retirement Account (LIRA)
- Life Income Fund (LIF)
- Registered Disability Savings Plan (RDSP)
- Registered Retirement Income Fund (RRIF)
Winner: Investment Accounts
A quick look at this section clearly indicates that TD Direct Investing is the winner here. The traditional bank-based brokerage platform offers you far more variety in terms of the account type you can open.
Wealthsimple Trade keeps matters much simpler by offering you the three most popular types of accounts used by traders today: the TFSA, RRSP, and cash account.
Limited options make things similar for many investors, but it can be a problem if you want to open a specific type of account that the platform doesn’t offer.
Wealthsimple Trade Vs. TD Direct Investing: Safety & Security
One of the most crucial things you should consider when picking a trading platform to work with is its safety and security features. You will likely find yourself entrusting the platform you are using with a substantial amount, and you need to ensure that your funds are secure.
Fortunately, Wealthsimple Trade and TD Direct Investing offer top-notch security. The two brokerage platforms are regulated by the Investment Industry Regulatory Organization of Canada (IIROC), the Canadian regulatory organization that oversees all investment dealers and trading activity in Canada.
TD Direct and Wealthsimple Trade are also insured by the Canadian Investor Protection Fund (CIPF), which insures the amount in your account held by the firms for up to $1 million.
Winner: Security
Both trading platforms use high-level encryption and bank-standard security to protect our data. Wealthsimple Trade’s accounts are held in a trust at a Canada Deposit Insurance Corporation (CIDC) member institution to ensure safe storage for your funds held by the firm.
TD Direct Investing holds your account itself because TD Bank is itself a CIDC member institution.
You can essentially trust both trading platforms with your money and information.
Wealthsimple Trade Vs. TD Direct Investing: Customer Support
This section will cover the customer support you can expect to get through the platforms.
Wealthsimple Trade Customer Support
Wealthsimple has a reputation for offering fantastic customer support. The company’s website offers a comprehensive help center that works as a valuable resource for the platform’s users who need help regarding various services offered by Wealthsimple, including Wealthsimple Trade.
The help center consists of several articles divided into different categories that cover various aspects of using Wealthsimple Trade, including one dedicated to troubleshooting.
If you face any problems while using Wealthsimple Trade, simply going to the help center and searching for the problem you’re facing will redirect you to a relevant article that can help. You can also call their client success team that’s available on weekdays from 9 am to 5:30 pm EST or email them at any time.
My experience with Wealthsimple Trade has been fantastic for its customer service.
TD Direct Investing Customer Support
TD Direct Investing is a discount broker offered by one of the largest financial institutions in the country, and it upholds the high standards set for it by its parent firm.
Accordingly, TD Direct Investing boasts very strong customer support. The platform has a team of investment representatives who are available to answer any questions you might have around the clock.
The investment representatives can answer your questions to help you with your investment needs over the phone. However, there is no live chat feature for customer support available through TD Direct Investing.
The platform does make up for the lack of a live chat feature by ensuring the availability of its client success team through the phone to cater to your needs in multiple languages.
Winner: Customer Support
Between the resources available and the simplicity that you get with Wealthsimple Trade’s platform, I see Wealthsimple as the winner over TD for this category.
Conclusion
Considering the features, benefits, and drawbacks of both platforms, Wealthsimple Trade comes out as the clear winner vs. TD Direct Investing.
It offers commission-free trades, plenty of promotions and discounts, excellent customer support, and it doesn’t charge any account fees.
Of course, our top pick might not be suitable for everyone. TD Direct Investing could be a better choice if you prefer the features it offers that Wealthsimple Trade doesn’t. I will briefly discuss for whom both discount brokerage platforms would be ideal.
Use Wealthsimple Trade If:
- You want to enjoy commission-free trading
- You prefer to stick to investing in stocks and ETFs
- You do not want to pay account management fees
- You want excellent customer support
You can check out my detailed Wealthsimple Trade review here to learn more about one of Canada’s top discount brokers.
Use TD Direct Investing If:
- You prefer the backing of a traditional financial institution
- You want to trade mutual funds, bonds, GICs, and other securities besides stocks and ETFs
- You don’t mind paying trading fees and account management expenses
You can check out my detailed TD Direct Investing review here if you want to learn more about the discount broker backed by a large Canadian bank.
I prefer Wealthsimple Trade because of its commission-free trading, lack of account fees, and overall low cost to me as an investor through the platform. Some investors might view the limited accounts and investing options available through the platform as a disadvantage.
However, I look at it as Wealthsimple Trade simply making trading simple. It’s one of my top picks for the best trading platforms in Canada.
