What is your opinion on Wealthsimple

Wealthsimple Review 2018-2021 - INVEST

Wealthsimple is a new name in the automated investment management space in the US, but it is certainly not a beginner. The company was founded as Canada's largest robo-consultant even before crossing the border in January 2016.

Wealthsimple offers American investors robust, socially responsible investment offerings as well as halal investment products that comply with Islamic law. Free tax loss harvest, ideal for investors with large taxable accounts; clear pricing; reduced, beginner-friendly customer experience (deserve the "easy" in the name of Wealthsimple); and full access to financial planners.

All of the good things come at a price, however: the company's rating in Investmentmatome's robo-advisor reviews has suffered from 0.4% to 0.5% (depending on account balance) due to its advisory fee, placing it on the the more expensive side of the competition. (For more information on the competition, see our Top Picks for the Best Robo-Advisor.) For value-minded investors, however, the extra cash can be well worth it.

Investmentmatome is a free tool to help you find the best credit cards, CD rates, savings, checking accounts, scholarships, healthcare, and airlines. Start here to maximize your rewards or minimize your interest rates. Dayana Yochim

4.5 investment matome rating

Wealth simply

Fast facts

  • Management fee: 0.4% - 0.5%
  • Minimum account: € 0
  • Up to $ 1,000 cash bonus with a qualifying deposit
Get started on Wealthsimple's secure site

Wealthsimple is best for:

  • Socially Responsible Investors
  • Those looking for halal choices to comply with Islamic law
  • Beginning Investors
  • Automatic rebalancing
  • Tax harvest
  • Access to financial planners

Wealth at a glance

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A total of

Minimum account

$ 0 for Wealthsimple Basic; $ 100,000 for Wealthsimple Black
Consultation fee

  • 0% for the first year at $ 0-5,000
  • 0.5% for balances of $ 100,000 and less
  • 0.4% on balances over $ 100,000
Investment cost ratios

  • Weighted average of 0.1% for regular wealth simple portfolios
  • Weighted average of the SRI portfolios from 0.24% to 0.28%
Account fees (annually, transfer, closure)

$ 0 maintenance or transfer fees. Wealthsimple will reimburse all transfer fees charged by an external institution with a minimum transfer of $ 5,000.
Portfolio mix

ETFs from 16 asset classes as well as individual stocks for the Halal portfolio
Supported Accounts

Taxable Personal / Joint Accounts, Traditional IRA, Roth IRA, SEP IRA, Trusts
Tax strategy

Free income tax losses for Wealthsimple Black customers; free of charge for Wealthsimple Basic customers on request
Automatic rebalancing

Free daily adjustment for all accounts
Customer support options

Live phone support: Monday through Friday from 8 a.m. to 8 p.m. Easter time; 24/7 email. Customer support calls can be scheduled with a financial planner.
promotion

  • $ 50 bonus when you deposit $ 1,000
  • $ 100 bonus when you deposit $ 10,000
  • $ 200 bonus on a $ 50,000 deposit
  • $ 400 bonus when you deposit $ 100,000
  • $ 1,000 bonus on a $ 250,000 deposit

Where prosperity seems easy

Low account minimum and no additional fees: Wealthsimple has made its value proposition appealing. Before you even sign up, the company provides a free portfolio overview of savings, debt, and of course investments (diversification, fees, and tax burden).

The minimum of $ 0 for the Wealthsimple Basic offer is a small hurdle to get started. This service includes free automated deposits, automatic rebalancing and dividend reinvestment. Wealthsimple doesn't charge any fees for transfers, trading, and tax receipts (this is a big issue we'll address below).

Maintaining a minimum amount of USD 100,000 qualifies customers for the Wealthsimple Black service, which offers the same features as the basic account at a lower management fee (0.4% versus 0.5%) as well as a free membership for the VIP Priority Pass, which offers the Customers plus a travel companion offers unlimited access to 1,000+ airline lounges in 400 cities around the world. (The company believes travel is one of the top cost-saving goals for customers.)

A Smart Savings account was added in early 2018. The 1% interest rate (subject to change) is higher than most traditional banks. The unlimited free transfers and no minimum make it a convenient place to store the money you need on short notice or as a parking space for an emergency cash register - far enough away from the daily cash outlets that you are not tempted to spend it.

Socially Responsible Investment Opportunities: One of Wealthsimple's choices is socially responsible investing. The company states that 35% of its customers have at least one of their accounts in one of the company's three risk-weighted SRI portfolios.

The SRI portfolios relate to six publicly traded funds that focus on companies that are involved in companies, e.g. B. Innovations related to clean technologies in developing countries, efforts to reduce carbon emissions and the support of gender diversity in leadership positions. The portfolio may also include municipal bonds that support local investment and government-issued mortgage-backed securities that promote affordable housing.

Sharia compliant portfolio: A halal-investing portfolio - one that complies with Islamic law - is another standout offering, containing around 50 individual stocks (not ETFs) that are scrutinized by a third-party committee of Sharia scholars. Businesses that benefit from gambling, alcohol, firearms, tobacco, or other restricted industries and do not generate significant income from loan interest are permitted.

The risk profile of the Halal investment portfolio is in line with Wealthsimple's growth offerings as it is 100% invested in stocks and designed to track the performance of the broader market. Customers with a lower risk tolerance are advised to keep a certain percentage of their portfolio in cash as Islamic law does not allow investments in interest-bearing assets (e.g. bonds).

Investing in Fractional Shares: As with other robo-advisors, at Wealthsimple every client ETF portfolio - the exact mix of growth, international investments, fixed income investments, cash and other asset classes - is based on answers to questions about financial goals, investment experience, financial situation and risk appetite. However, the company has a bonus feature for customers who can add small amounts to their account over time: Wealthsimple buys fractions of ETFs. That means your entire deposit can be fully invested instead of holding out in low-interest cash - it is enough to purchase a full stake.

Access to financial planners: Automation makes robo-advisor money management fees accessible to the average investor. But sometimes human touch is required. In addition to standard email, chat, and phone support from Wealthsimple, its Basic customers get a 15-minute call to explain the fundamentals of financial planning and ask questions, including how much to save and what kind to choose from account (IRA vs. non-retirement) and how their investments will be taxed. Wealthsimple Black customers receive a more formal financial plan - a document that provides an overview of their financial situation and addresses key concerns, such as: For example, whether they have enough time to retire, what accounts to withdraw from, and how to fill any gaps in their plan.

Most robo-advisory services limit the amount and type of hands-on help they offer clients (e.g. just email or one meeting per year) or only offer to Premium Account Holders who have a high account balance, Access to one-on-one consultations. Wealthsimple offers all customers the option to have a phone call with one of the company's certified financial planners or an approved investment manager.

Free tax loss harvest: Tax-loss harvesting is a strategy for lowering an investor's taxes on capital gains or other income by offsetting it with any investment losses. Often it is a chargeable additional service or is only available for wealthy customers. Any Wealthsimple client with a taxable account can have a portfolio analyst review their accounts (including those outside of Wealthsimple) for tax losses, although the strategy is usually of the greatest value to those with larger investments and high salaries.

Educational focus: You don't have to be a Wealthsimple customer to benefit from its services. Upload the latest statement from one of your current investment accounts. A Wealthsimple analyst will review your investment allocation, account maintenance fees and tax efficiency based on your goals and time horizon and discuss the results with you - free of charge and without an account registration.

Human contact with potential customers is also the idea behind the company's “Lunch and Learn” program, in which Wealthsimple holds a face-to-face meeting at your company where you teach the fundamentals of investing and answer questions about financial planning. (Lunch is included. And we're talking about the food, not the usual packed lunch with a side of chips.)

Where wealth is easy

Account management fees: Both customer and provider funds are made and broken in account management. Wealthsimple's 0.5 percent management fee for account balances between $ 5,000 and $ 100,000 and 0.4% for accounts over $ 100,000 is higher than that charged by any of the other companies on our best robo-advisor list on our website.

In comparison, Wealthfront and Betterment charge an administration fee of 0.25%. Even well-known brokers such as Charles Schwab Intelligent Advisory (0.28% management fee), TD Ameritrade Essential Portfolios (0.3%), Vanguard Personal Advisor Services (0.3%) and Fidelity Go (0.35%) outperformed the Wealthsimple Area clearly.

Management fees of the SRI fund: Management fees (including expense ratios) for socially responsible investments (funds and ETFs) are known to be higher than average ETF fees. This is not a problem specific to wealth - you pay these fees everywhere. Remember, however, that these expense ratios are taken directly from an investor's earnings. While Wealthsimple offers the cheapest SRI options, it's good to know that the weighted average of the SRI portfolios is between 0.24% and 0.28%, compared to the weighted average expense ratio of 0.1% for the Wealthsimple's non-SRI portfolios.

Lack of personal financial instruments:Those looking for a more in-depth financial advisory experience - calculators, planning tools, training materials, and a central finance hub - will find Wealthsimple's purposely streamlined websites and apps sparse compared to other providers. There can be beauty in simplicity: The The website, the app and the whole approach contain just enough information to explain the important concepts of saving and investing and to keep customers updated on what's going on in their accounts. It's great for savers who want to set it up and forget about it ... but perhaps less so if you want to play with retirement planning scenarios.

Is Wealthsimple Right For You?

Wealthsimple is a clear winner in the value-based investment category due to its strong range of SRI and Halal portfolios. Other benefits - like free premium features (tax loss harvesting, access to certified financial planners), a minimum amount of $ 0 (great for those just getting started) - put them in the same class as other robo-advisors with one higher brand name recognition.

The biggest tick in the “Disadvantages” column is Wealthsimple's account management fees of 0.4% to 0.5%. Given the impact management fees can have on long-term investment returns, this is an important consideration, especially for investors with account balances that are not eligible for Wealthsimple's lower rate of advisory fees.

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