Earn More Money, Investing, Save Your MoneyJanuary 25, 2021February 22, 2021

Why You Should Open A Wealthsimple Account

This article includes links for which we may receive compensation if you click. However, at no cost to you.

With the concept of investing becoming more popular, resources are becoming more accessible. However, since there is a multitude of apps and resources that are available, some are bound to be better than others. Therefore, we will take a look at which ones rise above the rest. While this may be subjective, some apps do have clear benefits. Therefore, the app and resources you use will most likely cater to your style of investing. For example, if you enjoy day trading and making multiple calls in a day, there are platforms that how low commission fees.

Therefore, you’ll lose less money on fees when making multiple trades. Let’s say that you like to purchase penny stocks/stocks with a relatively low value. There are certain platforms that don’t support buying and selling stocks if they do not meet certain requirements. If you’re looking to purchase a penny stock, you may want to look at certain other platforms.

With all that being said, this article specifically speaks on what Wealthsimple is as a trading platform. Therefore, we will go into what Wealthsimple is, what they offer, and the pros/cons of the platform as a whole.

What Is Wealthsimple?

Wealthsimple is a platform that allows its users to invest their money. However, it is different from a few other platforms as there are two sides to Wealthsimple. First is their asset management system. Similar to Mylo (recently named Moka), Wealthsimple asset management allows you to make deposits into your account. From there, financial advisors/Wealthsimple will have taken the money you’ve deposited and invested it for you. This may sound scary. However, there are a few things you need to do before your money gets invested. First, you need to fill out your profile. This includes name, address, salary, assets, liabilities, etc. However, the second part is what your risk profile is.

They do this by asking what your goals are and how they want your money to be invested. For example, if you want a little risk, you will have to deal with a smaller reward. However, many people prefer this type of investing. It’s very low risk, hands-off, and secures profits for the long run. Choosing this option will most likely put your money into bonds and other low-risk investments. However, many people prefer a higher return on investment. If you’re one of those people, you can expect that your money would be placed into various ETFs. The problem with this is that if there is an economic downturn much like what happened in March, you’ll be heavily affected.

If you’re looking for a more self-directed approach, Wealthsimple also has a trading app. However, we will get more into that later on in this article.

What Can You Do With Wealthsimple?

Wealthsimple has a ton of features. However, they’re still a relatively new company. Therefore, there will be a lot of features that are missing that would otherwise be in a trading platform. However, there are a lot of features that can be extremely useful. Therefore, we will go through a few of them in this section of the article. more specifically, the next section.

For now, we will briefly talk about how you can invest and what you can do with Wealthsimple. Once you create your account, you can choose where you want to invest in it. By this, I mean that you can invest your money into a TFSA or an RRSP. Both have their own respective benefits and purposes. However, if you’re looking to do self-directed investing, you should go with the TFSA. However, if you’re looking for forced savings where you can’t take out the money and it’ll be returned at your time of retirement, an RRSP is for you.

Some other features include live support, dividend reinvesting, and 3-day transfers. Now, we’ll go onto the pros and cons of Wealthsimple. This will outline more of the features that you can look forward to when you sign up for Wealthsimple.

Pros And Cons of Wealthsimple

Let’s start with the pros. When it comes to Wealthsimple, there are many advantages that’ll help you on your journey to building wealth. For starters, you can invest your money within a TFSA and RRSP, this was previously stated. Next, and what Wealthsimple is known for, specifically Wealthsimple Trade, is that they have commission-free trading. This means that you can purchase and sell as many shares as you like per day without a fee. This is a huge benefit for most people. Especially those who want to make multiple trades per day. Strategies like Scalping will benefit from this greatly.

Next, you have dividend reinvesting. Many people use this to grow their blue-chip stocks passively, increasing the value of their position. One factor that was really surprising that I personally didn’t know existed until Wealthsimple was Halal Investing. Halal Investing is the practice of allocating your money in places that align with your ethical Islamic views. This is similar to Green Investing where your money is investing in companies that are both environmentally friendly and are looking to make a change.

For another benefit, Wealthsimple has amazing support. You will have access to them over the phone and through chat support. Furthermore, if you have any questions, you can speak with financial advisors. Remember, financial advisors have a lot of experience and knowledge. Chances are, they’ll that the answer to any questions you have.

Both auto rebalancing and auto-deposit are available with Wealthsimple. Lastly, Wealthsimple has Socially Responsible Investing, which is the same as green investing. A method of investing where you allocate your money into companies that promote change both socially and environmentally.

Now, it’s time to talk about the cons. As great as Wealthsimple is, they aren’t without fault. Much like any company, there are some downsides to trading with Wealthsimple.

The first downside to trading with Wealthsimple is the fees. Yes, they are commission-free. However, what you don’t typically see on the ads is that it’s only free for Canadian investments. Therefore, purchasing American stocks and ETFs can be quite expensive. This amount makes day trading US stocks super difficult because unless you have a huge sum of money, you may get eaten alive by the fees. For example, I bought a few hundred shares of a company within the states and had to pay nearly $25 CAD all together in fees. Now, imagine if you’re purchasing a relatively low amount of shares, you would need to hold onto the shares for a long time in order to turn a profit. Furthermore, you can’t change the money in your account to USD in order to avoid these fees. However, Wealthsimple is looking to make this a possibility in the future.

Lastly, Wealthsimple does not display real-time data which is a major hindrance to many traders. Not having real-time data can cause you to miss out on critical purchasing moments. Although, you can enter your stop-loss limits. However, if you’re purchasing a stock that went down at a market price and you have a limited amount of money, you may not be able to purchase your shares. An example of this: say you want to purchase 10 shares of a company but only have $1,000 (stock price $100 ea). However, the price dropped a whole dollar within 10 minutes, you would not be able to purchase a market buy because the quotes will still be delayed. Therefore, the app is essentially saying that even though it went down a dollar, you will need an extra $100 to place the market order because the stock still reads $11 per share.

Regardless, Wealthsimple is a great company to use and has a lot of new and improved features coming it’s way in the future. Lastly, you can click any of the Wealthsimple hyperlinks in this article to sign up and you’ll receive $10 for free after your first $100 deposit.

Happy Investing!

Shameed Chris Khan

Shameed is just a man on a mission to help those around him gain financial success. Obsessed with writing about all things finance, this GTA native is constantly learning and sharing his experiences with others.