Why Does Wealthsimple Need My SIN Number? (2024)

Over 53% of Canadians have been a victim of financial fraud, according to Equifax.

With these events continually increasing year after year, it is important to question who needs your SIN.

So why does Wealthsimple need your SIN number?

When setting up an account with Wealthsimple, they require your SIN to provide the appropriate tax reporting information to the Canadian Revenue Agency (CRA). In addition, your SIN will verify your identity if you’re opening a non-registered account.  

Reasons Wealthsimple Wants Your SIN

Registered accounts are recorded with the Canadian government and enjoy some form of tax benefits like tax deferrals or tax-sheltered status.

Investment accounts like Registered Retirement Savings Plans (RRSP), Tax-Free Savings Accounts (TFSA), and Registered Retirement Income Funds (RRIF) are all considered registered investment accounts. 

When you open one of the above accounts, a brokerage firm like Wealthsimple requires customers to provide their SIN number so the correct income tax information gets reported to the Canadian Revenue Agency. 

Non-Registered Accounts

On the other hand, non-registered accounts don’t follow the same rules or have the same tax benefits. With these types of accounts, you can invest in various assets but must pay taxes annually on any income generated.

For these accounts, a brokerage will need your SIN to verify your identity and secure your account. Wealthsimple uses it to verify identity with a third-party credit reporting agency. Any discrepancy between the two will require additional documentation or a double-check of your initial application.

Do Other Brokerages Ask for SINs?

Wealthsimple isn’t the only brokerage that will want your SIN. In fact, as discussed above, if you plan on investing money or executing stock trades, you’ll need to provide personal information to the broker, including your SIN.

That information will verify your identity and provide the appropriate tax reporting information to the CRA.

Here’s the personal information you can expect to provide:

  • Name and address
  • Date of birth
  • Occupation
  • Intended use of your account
  • Social Insurance Number (SIN)
  • Other accounts (used to determine your source of funding)
  • A signature

About Wealthsimple

Wealthsimple is a popular investing platform known for its low costs and user-friendly platform. You can invest in ETFs, stocks, bonds, and cryptocurrency. 

The company was formed in 2014 with the intent to give customers a way to make smart investing moves without the high fees and account minimums typical of other brokerages.

Wealthsimple offers more than just investing, although that’s a big part of its appeal. You can find a commission-free trading platform, high-interest savings, and a prepaid cash card.

Many customers use the Wealthsimple robo-advisor platform, meaning your portfolio management is based on your responses to various questions.

From there, investments get chosen based on an acceptable level of risk to maximize your returns.

Is Wealthsimple Safe?

Wealthsimple is a member of the Investment Industry Regulatory Organization of Canada (IIROC), which oversees investment traders and dealers, similar to financial institution oversight.

In addition, Wealthsimple puts a variety of security standards in place to ensure your accounts are protected. 

  • Clients must set up two-step verification every time they log into their accounts. This helps avoid unwanted logins by someone who may have your username and password.
  • A state-of-the-art encryption system protects all Wealthsimple data.
  • Wealthsimple employs a full-time security team that does everything from processing transactions to updating policies and procedures across the board to ensure all information is safe. 
  • Wealthsimple does not sell any client information to third parties.

Are Wealthsimple’s Assets Insured?

If you have any accounts held in a financial institution, you probably know about the Canadian Deposit Insurance Corporation (CDIC). This organization provides deposit insurance to customers in commercial banks and savings institutions. 

For customers that have accounts with Wealthsimple Cash, all balances are eligible for protection up to $100,000. 

What If Wealthsimple Goes Out of Business?

The Canadian Investor Protection Fund (CIPF) protects members if an eligible client becomes insolvent.

Because Wealthsimple is a part of CIPF, its investors are automatically covered up to specific amounts if the company goes out of business. Customers could move their money to any financial institution if insolvency occurs.

However, CIPF won’t help if a customer makes poor investment choices. As all investor should know, dabbling in the stock market or investing any money is a risky business that could result in money loss.

While CIPF won’t cover your losses due to poor choices, they are helpful if your brokerage becomes insolvent or falls into bankruptcy.

Is Wealthsimple Crypto Insured?

Is Wealthsimple Crypto Insured?

With Wealthsimple Crypto, you can buy, sell, and earn cryptocurrency on one of Canada’s first regulated platforms. 

In addition to the popular Bitcoin, Ethereum, and Dogecoin, there are over 50 other cryptocurrency coins to buy and sell. 

According to Wealthsimple’s website, cryptocurrency is not protected by the Canadian Investor Protection Fund or Canadian Deposit Insurance Corporation. 

While your investment isn’t federally protected, Wealthsimple partnered with Coincover to add a layer of security regarding hacking. In addition, each custodial partner has over $200 million in insurance coverage and is a regulated entity.

The Pros and Cons of Wealthsimple

Because Wealthsimple offers an array of financial products, it is a one-stop shop for those looking to invest and trade without hassle. 

First up, Wealthsimple offers platforms for investments, trading, cash accounts, cryptocurrency, and even tax services. The biggest benefit is that the website is geared toward beginner investors while providing various products to choose from. 

  • No account minimums meaning anyone can get started.
  • No added fees like annual charges or inactivity fees.
  • Large selection of financial products at your disposal, including investing, securities trading, cryptocurrency, cash accounts, and tax services.
  • Socially responsible investing options.
  • Other brokerages have lower management fees.
  • Those seeking a more detailed financial tool package might find Wealthsimple “too simple.” Their educational material, research options, and planning tools are significantly less than other investment brokerages. 
  • It can take a few days to deposit funds from an external bank account to a Wealthsimple account.

If you’re looking for more detailed information on Wealthsimple products, check out the in-depth review I did on Wealthsimple’s Trade and Savings accounts.

As with any brokerage firm, there are pros and cons to each. As a potential customer, it’s up to you to do your research and decide if Wealthsimple fits your financial needs. 

Final Thoughts

why does wealthsimple need my SIN number

When someone asks for your Social Insurance Number (SIN), it’s always a bit concerning. Most people are aware of identity fraud and how it can negatively impact their life, so it’s always a good thing to be overly cautious.

However, when opening an account with Wealthsimple, you must hand over that information. The brokerage will need it to verify your identity or send tax reporting information to Canada Revenue Agency.

Want to learn more about Wealthsimple and how to get started trading? Check out these tips for buying stocks on the platform.

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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.

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