You heard correctly: you can now buy and sell from among thousands of stocks and exchange-traded funds (ETFs) listed on Canadian and U.S. exchanges without paying any fees. That’s pretty newsworthy given that most of the country’s online brokerage firms typically charge anywhere from $9.99 and up every single time you want to buy or sell a stock. There’s also no minimum account amount required (you can start with just $1) and users are allowed to make an unlimited number of trades. So whether you make one or fifty trades a day, you pay the same amount: zero dollars.
About Wealthsimple Trade
Wealthsimple Trade is offered by the company behind Canada’s leading robo advisor, Wealthsimple. The Canadian-born FinTech company has made a name for itself by creating personalized, passively traded, ETF portfolios for clients based on their investment needs and risk tolerance. Based on their competitive fees and excellent services, Wealthsimple has consistently been our top choice for the best robo advisor in Canada.
Now, the company has branched out and made trading super simple. Rather than let automated investment algorithms do the investing, Wealthsimple Trade users can create their own portfolio and then decide exactly what kind of investments they want to add or delete from their holdings. This is especially appealing for newbie or casual investors who want to personalize their own portfolios, but who don’t need a lot of bells and whistles or up-to-the-second stock quotes. Overall, it’s pretty exciting news, opening up a whole new trading platform for Canadian investors.
How Does Wealthsimple Trade Work?
In many ways, Wealthsimple Trade works a lot like any other online brokerage. Rather than walking into a bricks-and-mortar building and speaking to a real-life financial advisor, you buy and sell stocks or ETFs with a few clicks of a keyboard.
However, in the case of Wealthsimple Trade, that keyboard is the one on your mobile phone and not the keyboard you use at home with your PC or laptop. That’s because Wealthsimple Trade is currently only available as a stock-trading mobile app and it’s completely separate from your Wealthsimple account (e.g. you can’t access your trade account from the Wealthsimple account and vice versa).
Yes, it can be a little confusing at first. Even if you already have a Wealthsimple account, you will still need to download a separate app, but you can log in with the same credentials and your profile will be already set up. It also means that your two accounts—Wealthsimple and Wealthsimple Trade—are not linked. After signing up for Wealthsimple Trade and using the app to buy stocks, it took me awhile to get used to not seeing my Trade account when I would log into my Wealthsimple account on my PC. But really, this isn’t a deal-breaker. The sign-up process and linking a bank account are as fast and easy a process as with Wealthsimple, and you’ll get used to it quickly.
Once you find a stock you’re interested in, you can add it to the app’s watchlist feature. When you’re ready to buy, the stock is yours with just a couple of taps on your phone. Selling a stock is just as straightforward. One thing to note: if there’s a hot stock (like an IPO about to be released) you might want to buy, just make sure you have enough money in your trading account, as it can take up to three days to transfer money from your linked bank account to your Wealthsimple Trade account.
Pros and Cons
- There are no commission fees. None. Zero.
- The Wealthsimple Trade app is intuitive and easy to use.
- You can choose from thousands of stocks and ETFs from Canadian and U.S. exchanges.
- As with Wealthsimple accounts, Trade accounts are CIPF-protected for up to $1,000,000.
- Security is top-notch: the app requires a PIN and it’s fully encrypted to keep your data safe.
- A great trading platform for new investors who want to experiment with DIY online investing without worrying about fees.
- Clients are limited to opening TFSAs and RRSPs and non-registered accounts.
- You can only use the app on your phone.
- As a no-frills platform, there’s not a lot of in-depth stock information available, and no way to set up things like automatic sales and buys of stock.
- Wealthsimple Trade stock quotes are not updated in real time. There is a 15-minute delay (not a big issue for most investors but a potential problem for serious day traders).
Is Wealthsimple Trade Safe?
Yes! Wealthsimple Trade takes security seriously. Every time you access the app you have to enter a PIN number to open it. It’s fully encrypted and relies on two-factor authentication protection to keep your data safe.
How to Sign Up
The sign-up process is pretty intuitive if you’re comfortable using apps. The Wealthsimple Trade app is available for Android and iOS, so just download it and follow the instructions to link up a bank account to get started. Expect an average of three days for the money transfer from your bank to take place before you can start making trades.
Just remember: if you’re already an existing client of Wealthsimple, you still have to download the app and sign-up for a new, separate Wealthsimple Trade account — they are two wholly separate accounts.
The Verdict: Should I Get Wealthsimple Trade?
Absolutely! The no-commission structure makes Wealthsimple Trade a fairly risk-free, enticing option for any level of investor, but it’s especially ideal for someone who is just gaining the confidence to try their hand at investing. Wealthsimple Trade is ideal for dollar-cost averaging, as investors can make small, frequent contributions without any fees. It’s also nice to be able to buy and sell stocks without getting hit with fees that would curtail your freedom to experiment a little.
Our verdict? Wealthsimple Trade is a straightforward, no-frills trading app that’s easy to use and because there are no commission fees. There are really no major drawbacks to using it, as long as you exercise the same due diligence and caution you would with any stock-trading platform. If you’re just learning how to invest, Wealthsimple Trade is for you.
However, if your investment philosophy is “ignorance is bliss,” and you really don’t know much about stocks and ETFs (and have no interest in learning), then you’re likely better off sticking with the passive, automated investing offered by Wealthsimple. To help you decide, read our full Wealthsimple review.
Finally, if you’re a more experienced investor and are looking for a wider range of accounts, such as an RESP, LIRA, or a Corporate account, then go with Questrade, our top-ranking discount broker in Canada. Wondering about the differences between Questrade and Wealthsimple Trade? Read our in-depth comparison of Wealthsimple Trade vs. Questrade.
Disclaimer: Young & Thrifty has entered into a referral and advertising arrangement with Wealthsimple US, LTD and receives compensation when you open an account or for certain qualifying activity which may include clicking links. You will not be charged a fee for this referral and Wealthsimple and Young and Thrifty are not related entities. It is a requirement to disclose that we earn these fees and also provide you with the latest Wealthsimple ADV brochure so you can learn more about them before opening an account.