The mission statement of Wealthsimple USA can be understood to a large extent from their name alone: they intend to make investments with ETFs as simple as possible. In other words, they are taking something that is generally considered very complicated – and is sometimes misunderstood as being almost elitist – and making it available to the masses without needing a fortune or an economics degree to get a foothold. Or at least, that’s the goal.
In this Wealthsimple review, we’ll be assessing how well they achieve this goal, as well as how they stack up to the competition more generally, to see whether they are worth your while.
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We’re going to begin this Wealthsimple review exactly where we think that a lot of people’s interest in different investment management services do and that’s with new customer offers. You could argue that shouldn’t be the number one priority when it comes to our Wealthsimple review, but there’s little doubt it is often the window dressing that gets a lot of people into the store.
Before we get into this, do note that we will be using the example outlined on the site throughout our Wealthsimple review, including the currency given, because we don’t want to make any assumptions when it comes to how that would translate to other markets and currencies.
The offer here actually ties in well to their overall philosophy, which is their focus on advice and management in order to make investments approachable for non experts. With a Wealthsimple open account, you can get your first £5,000 of investment without fees, meaning that there’s a real boost of incentive to get started.
Perhaps this doesn’t seem like much compared to some other examples which have a more immediate financial impact, but we would say that is missing the big picture. What Wealthsimple are offering is the ability to utilise their expertise as well as their services, both of which are just as important as the other. So, if you find yourself uninterested in this offer – which provides that expertise for 12 months up to £5,000 for free – then perhaps you should consider whether their overall concept is for you.
For those who do find themselves interested, then it’s likely you will be interested in this site in general, where you don’t just invest in ETFs, but you do so on the back of expert advice. We really wouldn’t underestimate the value of this, as the ability to make smarter investments is not something to take lightly.
It’s a close to ideal opening gambit for a unique investment opportunity, and a great way for us to start our Wealthsimple review.
In this part of our Wealthsimple USA review, we’ll be taking you through the Wealthsimple open account process. This is all really easily laid out on the site, and that is something we always appreciate.
Firstly, you need to hit the ‘Get started’ button from the homepage and provide basic personal information, alongside things like any previous experience you may have had investing and investment objectives.
There’s also suitability to take into consideration. Here, they assess your information and provide personalised recommendations. You can use this information to choose the kind of Wealthsimple open account you want. A defining feature of Wealthsimple USA is already apparent here, as you can contact advisors at this early point if you need more advice.
With all this out the way, you’ll want to fund the account. We’ll go into more detail about the options later in this article. And that’s all there is to the Wealthsimple open account process: your funds, when they arrive, will be invested in two business days.
Naturally, a site like Wealthsimple USA bases its whole identity on ease of use, and we have to say that it’s about as smooth and as easy to use as we could possibly imagine. Firstly, there’s how well it actually explains itself. This is every bit as important as the functionality of the site itself because if the user cannot understand what they’re doing, how easily they can do it doesn’t matter all that much.
We enjoyed using Wealthsimple during our Wealthsimple review as the site really excels here. Not only is everything explained in really simple terms, but they also explain more general investment concepts and strategies. It’s almost like you’re getting an education along with an investment.
They’re just as impressive when it comes to functionality. During our Wealthsimple review, spending time on the operators platform, we didn’t notice anything in the way of slowdown, broken links or any technical hiccups. Bringing these two points together is how well it is structured. This makes finding everything you need – from information to the more practical features – really straightforward and intuitive.
In terms of its looks, it has been said that Wealthsimple USA is aimed at millennials, and its modern stylings certainly backs that up. Nonetheless, we can’t imagine many people taking issue with their spacious, stripped-back and easy on the eye style.
What all this really makes clear – just like the new customer offer – from the moment you utilise the Wealthsimple open account procedure to being many months into your journey, is that ease of use is paramount. It’s very much aimed at people who are beginners (to intermediate) at investment and makes little to no assumptions about what you know and how much help you need. Instead, it’s just all here if you do need it, and that all begins with Wealthsimple being brilliantly simplistic to use, but full of depth.
One of the core concepts behind everything Wealthsimple does is that they have different tiered services.
Obviously, they are far from the first operator to do this – we aren’t giving them points here in terms of originality in that regard – but we think how well these pan out really gives you an idea of what they are all about and most importantly, their range. Which Wealthsimple open account option is right for you depends on your personal needs and preferences.
The Basic package requires you to invest nothing, absolutely nothing. This is such a massive part of what makes Wealthsimple USA what it is. Obviously, if you invest nothing, you get nothing, but what this signifies is that you really can go as low as you want still utilise their services.
A quick rundown of some of the things you get with a Basic Wealthsimple open account includes a perfectly matched portfolio, automatic rebalancing, direct debit contributions and dividend reinvestment. Most important of all, you get access to investment advice at this level. That’s right, you can quite literally get the advice and help you need for nothing before deciding what investments are right for you.
In a little more detail, automatic rebalancing is a rebalance of your portfolio, with no extra effort, as the market changes. Dividend reinvestment is where your stock dividends are instantly and automatically put back to work, so you never miss out. We’re going to go into more detail and the product offered specifically later in this Wealthsimple review, but this is an astoundingly good bottom level. The only downside is the 0.7% fee.
The next tier is the Black level. This requires deposits of over £100k. Here, you get all those basic features but your 0.7% fee goes down to a 0.5%. You also get investment planning. If you choose a Wealthsimple open account at the Generation level – which requires deposits of over £500k – you get a dedicated investment adviser, ongoing portfolio monitoring and portfolio and pension Wealthsimple reviews.
Truthfully, it’s pretty clear that Wealthsimple wanted to put as much into the basic level as possible, not discounting the benefits of the additional two. Honestly, we don’t see why not. The higher tiers don’t lose anything by so much being available to those who are investing less.
We suppose you could argue that those extras could be used as an incentive, but there are additional incentives anyway and really good investments should always be the key driving force – that’s what they are all about. We respect the choices made by Wealthsimple here, and think they will help a lot of people.
It’s clear they want to target a more mainstream, broader audience than most, and that means they won’t appeal to everyone. These tiers are the perfect example of that, but we think of it as a positive. There’s plenty of places to invest and having one which gives so much without needing to spend fortunes or have intricate knowledge of markets means that investment is open to more people. For those it is right for, that Basic package will be a revelation, and for those that want more, the extras are nothing to turn your nose up at.
We’ve discussed ease of use generally in this Wealthsimple review and have been very impressed in that regard. For that reason, it should come as little surprise that Wealthsimple has quality software to back this up.
The software itself, as far as we can tell, comes from their own team of software developers and experts. Obviously, we can’t tell you their credentials, as we would if they used a well known third-party to craft the technical side of things. All we can say is that we found everything smooth and easy to use without any notable hiccups or slowdown.
The mobile app is every bit as good as well, with a clean design and a very straightforward set up. The user experience and accessibility is once again paramount, and it shows here. You can even sign up through the app, which is a really nice touch.
There are four key ways of funding your Wealthsimple USA account, and just like everything else, it’s made nice and simple.
The first is a debit card. This has the obvious benefit of being very simple to use and familiar to a lot of people. However, if the contributions you are making look to be rather large, then you may encounter some issues with the payment failing, depending on your account and your bank.
If that is the case, you may want to consider using a bank account instead. This can be done by logging into your account, hitting that ‘Funding’ tab and selecting ‘One off bank transfer’. This is ideal for depositing large amounts.
If you want to make more regular payments, you can set up a direct debit, and these can be utilised monthly, bi-weekly or however often you would like. On a similar note, you can transfer accounts that you hold in other institutions, like pensions, either partially or fully.
One of the things that makes Wealthsimple USA really interesting is the use of robo-advisors. In other words, your portfolio investments are automated. However, what is really important is that these are based on the expertise of human financial advisers.
One of the key selling points is access to these advisors regardless of your investment level. They are available via phone and email, with the former being ideal if you want to talk things through in person. After all, some things are easier to articulate that way, with the latter being better for any complicated issues you want a carefully considered and detailed response to.
There’s no live chat here, which may disappoint people but we think that’s just the reality of getting this kind of quality. You can’t expect to have experts ready to respond at a moment’s notice like some ordinary customer service team, so sometimes a small wait for an email is the price you pay.
Obviously, any site dealing with actual money needs to be beyond reproach when it comes to security. Happily, Wealthsimple USA has a page about protecting users on their Help centre: another example of how much effort they go to with regards to making everything as clear and easy to understand as possible.
All information is encrypted, using state-of-the-art technology. They have a 256-bit SSL certificate and information is backed up throughout the day, every day. They also ensure that behind the scenes, they have policies across the entire organisation aimed at creating as secure an environment as possible. You can also report security issues and they will respond within 24 hours.
In another part of their Help section, they explain that if they went out of business, they have insurance from the Securities Investor Protection Corp which covers up to $500,000 in securities and $250,000 in cash. Their excess covers an additional $150 million across all clients.
You may also be asked to provide KYC identification. This protects them from fraud and ensures you are who you say you are, and you may be asked to provide things like a passport to prove that fact. This may seem like more of a security precaution for themselves but really if they weren’t making those kinds of checks, it would really call into question their integrity.
Wealthsimple is a Canadian firm primarily owned by Power Corporation, who trade on the Toronto Stock Exchange. The company does not have a banking license, but instead works with two major Canadian banks to deliver accounts. They have also won several awards, including being placed on the FinTech 100, along with a Webby Awards for their website.
Finally, although it’s not the focus of our analysis, their Wealthsimple Cash product does not have a license but instead uses two major Canadian banks to provide its accounts. It is not yet available to US players, but could potentially be in the future.
You can think of this as an extension of the welcome offer. Not only do you get £5,000 worth of assets managed for free when you join, but you also get an additional 12 months when you refer a friend. We’ve gone into detail about what we think of this offer earlier so we don’t wish to repeat ourselves here, but we will reiterate that we think it is an excellent promotion, and one befitting of the site’s philosophy.
We suppose some people would prefer something a little bit different here because it is so similar to that welcome offer, but it undoubtedly provides good value. In order to utilise this offer, you can either tap the ‘Earn rewards’ button on your phone or head over to the ‘Invite’ area on desktop. Talking of rewards, we’d also suggest a look at our SogoTrade review for traders looking for a generous trading offer.
It’s important to note that, at the time of writing, Wealthsimple USA only offers stocks and ETFs – also known as exchange-traded funds – with a large focus on the latter. ETFs are really ideal for a company that’s all about keeping investment as simple as possible because they allow for a diverse selection of mutual funds with the potential to choose both low-risk and low-cost investment options.
You can even search for specific ETFs using the magnifying glass symbol in the top-right hand corner of your dashboard. You can either search for a company name or symbol, and it should appear as long as it’s available on the following supported stock and ETF exchanges; Toronto Stock Exchange, TSX Venture Exchange, NASDAQ and the New York Stock Exchange.
An ETF is very similar to stocks and in fact, stocks can comprise part of the investment fund. They are traded on the stock exchanges and comprise things like bonds, commodities and, yes, stocks.
ETFs are available at a discount because they have lower fees: generally in the range of 0.05% to 0.25%, while mutual funds generally have fees of more than 2% a year. There is also no minimum to invest, and as they trade in the stock market, they are as simple as buying a share in a company. Similarly, they are bought and sold during market hours and the market price of the ETF is determined by both the usual supply and demand factors, as well as the value of the underlying portfolio.
Part of what makes Wealthsimple so interesting is its use of algorithms to essentially provide you with a portfolio based on automatic advice. If this is something which makes you uncomfortable, remember that these are backed up by real life expertise, and advice from actual financial experts is available at every level. This is a huge selling point and a big thumbs up in our Wealthesimple review.
During the signup process, there is a questionnaire and this is used to create a portfolio based on what you want. The most vital of these is whether you want a low, high or medium risk. The higher the risk, the higher the reward. They actually have some really great articles on investment risk that go into a lot more detail and can really help a non-expert get a great understanding of what’s best for them. Alongside the advice given by the site, this is a huge selling point and something which makes Wealthsimple stand out from the pack.
You can also choose investments based on social responsibility and they even offer things like halal-compliant options so anyone can use this service in a way which reflects their morals and ethics. The key selling point here is that you get all of this while still being a passive investor. In other words, this is based on a simple questionnaire and the experts do the rest.
You can learn as much as you want at Wealthsimple – it’s one of the things which makes the site great. But if you don’t have that kind of time, it’s all taken care of for you. It’s the key selling point you should consider when comparing it to the likes of those found in our Zacks Trade review, ATC Brokers review, CitiFX Pro and Etoro, to give but a few examples of their competition.
Other things which really help Wealthsimple stand out include the roundup feature, which automatically uses your spare change for things paid for by credit or debit card to round up your purchases. This is a great way of showing that even small amounts can be effective and it’s also available on the mobile app.
Another similar example of making every little thing count is that Wealthsimple buys fractional shares of ETFs, which will remain in place until there is enough money to purchase a full share.
There’s also the option to use the site to save, as the Wealthsimple cash account can be used to save as well as spend. It replaced the smart savings account, so you could do more in one single place.
We’ve discussed the fees from ETFs themselves already in our Wealthsimple review but here we’re going to talk about the fees from Wealthsimple. This has been discussed when talking about the different account options, but we are going to be going into more detail here so things are made absolutely clear, alongside our analysis of the value provided.
The basics are that they charge a 0.7% management fee alongside additional fees that, according to the site, average around 0.20%, including a market spread fee. These are similar to the buy and sell fees you get between currencies at foreign exchange shops and spreads how businesses are involved with converting one asset for another.
If you are wondering if this is worthwhile, remember that you get much greater liquidity, as well as a secure settlement process, In other words, it’s a guarantee that your money will be exchanged for the agreed amount. So essentially, yes, they are worth the money.
Other than the management fee, the only other fee actually charged by Wealthsimple is a 0.0035% fee if there is a need to convert any currencies. These fees already include VAT. The fees also, as mentioned earlier, can be reduced via the promotions and the higher account options we have already discussed, but this is what you can typically expect.
So, is it worthwhile? Honestly, we would say considering the quality they offer, they are an absolute bargain. Sure, you can pay less but you’re paying for a service and expertise here and considering all that, we think you’re getting an excellent price. For a fair comparison, head over to our Etoro review.
We can hardly imagine utilising exchange traded funds to be made much easier than this. Don’t get us wrong, it does come at a price in terms of management fees, but we think what is asked – especially considering that can be lowered in several circumstances – will make this service more than worth it for a lot of people.
If you’re not an expert on ETFs or trading in general, that help and advice is worth much more than what they are asking for in return. When you combine this with great options in terms of what you can invest in, you have an ideal way for beginners to get into this market.
Our conclusion for our Wealthsimple review USA must acknowledge that Wealthsimple won’t be for everyone. People will have their own Wealthsimple opinions, and that’s ok. It has a specific target market and makes no apologies for going after them in the most uncompromising way possible. Because of this, we don’t think it is necessarily fair to negatively rate Wealthsimple for who they aren’t targeting, but instead you should rate them on how well they meet the needs of their demographic. A demographic that nowadays has many options. If this is you, then take a peek at our Stash review, and our SoFi Invest review for a couple of popular alternatives.
In that sense, we view them as pretty close to flawless in our Wealthsimple review. They’ve made something complicated accessible while still maintaining a level of depth that not only teaches beginners how to utilise their finances better as they go along, but also ensures they have all the tools they need to hit the ground running. This includes fantastic customer service, an amazing intuitive design and an attention to detail that few, if any, are capable of matching.
Trading financial products carries a high risk to your capital, especially trading leverage products such as CFDs. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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