which on-line investing service is best for you?

Photograph by Christin Hume from Unsplash

Perhaps you need to attempt on-line investing or change on-line brokers or robo-advisors. Both means you’ve landed right here since you narrowed down your selections to Wealthsimple or Questrade. Each are good choices for Canadians that would assist you develop your investments.

Whereas the 2 fintech platforms have comparable services—for instance, the 2 do provide self-directed and managed funding companies—they aren’t equivalent. The platform that’s best for you will rely in your scenario and preferences, together with whether or not you favor to handle your individual investments or would slightly let a robo-advisor construct your portfolio and handle your investments for you.

So, let’s get into the variations between Questrade and Wealthsimple so you possibly can resolve on the most effective investing platform for you.

Questrade and Wealthsimple are Canadian funding platforms, and each provide helpful investing services. However the branding for each will be complicated.
Questrade is each the title of the corporate and the brokerage service, but its robo-advisor known as Questwealth Portfolios.
Wealthsimple used to have a separate app for DIY investing referred to as Wealthsimple Commerce) and its managed funding robo-advisor was referred to as Wealthsimple Make investments. Now, although, all its funding merchandise—shares, ETFs, crypto, choices, and the robo-advisor—can be found on one complete app, aptly and easily referred to as Wealthsimple.

Now that we’re clear on the names, let’s dive in and examine the 2 firms and their companies.

What’s Questrade? How does it work for Canadian traders?

Questrade* first gained recognition as a low-cost supplier of brokerage companies in 1999, lengthy earlier than the time period “fintech” grew to become the factor to do. As we speak, it presents virtually each sort of funding—together with shares, bonds, exchange-traded funds (ETFs), mutual funds, assured funding certificates (GICs), choices, preliminary public choices (IPOs) and treasured metals—with reasonably priced buying and selling charges, in comparison with that of conventional brokerages, banks or different monetary establishments. (Learn our full  Questrade evaluation for much more info on the platform.)
Wealthsimple, alternatively, entered the brokerage market extra not too long ago, in 2019 with its cell app Wealthsimple Commerce. It made a splash with its zero-commission trades on ETFs and shares listed on the NYSE, NASDAQ, TSX or TSX-V exchanges.

For Wealthsimple customers, the trade-off of no charges, nevertheless, was the comparatively restricted funding merchandise. As a substitute of buying and selling commissions, Wealthsimple made its cash via a 1.5% forex conversion charge utilized to Canadian-to-U.S. greenback conversions (and vice-versa). That is vital, as a result of ordinarily Wealthsimple Commerce holdings—together with U.S. shares—are in Canadian {dollars}. So, the forex conversion charges can shortly add up for traders fascinated with U.S. shares and ETFs. And on high of that, if an asset is a dual-listed safety, that means it’s listed on a U.S. alternate and a Canadian alternate, solely the Canadian-listed asset is accessible. (Learn much more in our Wealthsimple evaluation).

Though, initially solely obtainable as a smartphone app, Wealthsimple’s buying and selling companies at the moment are obtainable for browser as properly. And it has expanded its funding choices to incorporate ETFs and shares on further exchanges CBOE Canada, CSE, and restricted securities on BATS). It additionally presents near 60 cryptocurrencies (bitcoin, ethereum, dogecoin and others); and was the primary Canadian platform to supply buying and selling in fractional shares of a restricted variety of U.S. and Canadian firms (Shopify, Google, Amazon, Tesla). However Wealthsimple nonetheless doesn’t provide worldwide (non-U.S.) equities or different funding belongings that one can discover on Questrade.

As for account varieties, Wealthsimple presents private (non-registered) accounts, TFSAs and RRSPs—and that’s it. Cryptocurrency will be held in non-registered accounts solely—nevertheless, crypto ETFs will be held in registered accounts. Know, although, that Questrade’s presents many alternative registered accounts, together with RRSPs, TFSAs, registered schooling financial savings plans (RESPs), locked-in retirement account (LIRA), retirement revenue fund (RIF), life revenue fund (LIF) and first residence financial savings account (FHSA). Questrade was the primary monetary instiution to supply FHSAs, really. It additionally presents taxable non-registered accounts (margin and overseas alternate market accounts). Nonetheless, Questrade doesn’t but provide crypto buying and selling.

One other massive distinction between Questrade and Wealthsimple? Entry to market knowledge and analysis instruments. Questrade presents free real-time market knowledge, whereas Wealthsimple has as much as a 15-minute delay on quotes. This implies the value for an funding you see displayed in your display screen will not be what you really pay/get once you execute your commerce. Questrade additionally presents a set of free and paid knowledge packages for mutual funds, IPOs, intraday buying and selling and stuck revenue merchandise.

However an enormous similarity is that Questrade and Wealthsimple additionally adividend reinvestment plans (DRIPs), which robotically reinvests your dividend funds. Moreover Questrade presents free Elite Membership to the Passiv app, which helps you to automate deposits and purchases of shares and ETFs.

Each Questrade and Wealthsimple Commerce have immediate deposit options that permit traders to make trades instantly after depositing funds, as much as sure limits. Questrade presents immediate deposits of as much as $10,000. (Our in-depth evaluation of Wealthsimple Commerce right here.)

How do Questrade and Wealthsimple examine?

Right here’s an in depth breakdown of how the 2 on-line brokerages examine:

Backside line: Ought to DIY traders select Questrade* or Wealthsimple Commerce*?

For cost-conscious traders in Canada, the draw of commission-free trades could also be motive sufficient to signing up for Wealthsimple. Add to {that a} user-friendly and intuitive platform, the power to commerce cryptocurrencies and a innovative money/financial savings account (with spending card) that seamlessly integrates together with your investing accounts, then Wealthsimple can appear to be the apparent alternative. Nonetheless, Questrade would be the higher choice for self-directed traders who:

• Wish to commerce U.S. shares and ETFs. Wealthsimple’s 1.5% forex conversion charge makes investing in U.S. shares and ETFs expensive. Whereas, technically, Questrade additionally expenses a forex conversion charge, it doesn’t apply so long as you retain these investments in U.S.-dollar belongings indefinitely. Wealthsimple, alternatively, requires all belongings to be held in Canadian {dollars} (except you pay $10 per 30 days for a U.S. greenback account), which suggests you incur the forex conversion charge with each relevant commerce. (Learn this, for a deeper dive on Questrade’s charges when it launched its app.)
• Are retired or have younger kids/grandchildren. These traders might wish to open retirement revenue funds (RIFs/LIFs) or RESPs, which aren’t but provided via Wealthsimple.
• Desire a wider alternative of investments. As talked about above, Wealthsimple inventory and ETF choices are restricted, and it doesn’t provide different belongings that Questrade does, equivalent to mutual funds, bonds, GICs, worldwide equities or treasured metals. Questrade’s sturdy funding and account choices make it the dealer of alternative for traders who desire a full slate of choices obtainable to them.
• Want to arrange automated companies. Questrade’s free Passiv membership permits traders to take a comparatively hands-off method to their DIY investments—successfully permitting them to imitate a robo-advisor service for his or her investments.
• Need actual time granular knowledge. When you’re an lively commerce or an intermediate to superior investor who loves sifting via knowledge and funding analysis, Questrade’s knowledge and evaluation instruments may make the platform much more engaging to you.

Examine the most effective on-line brokerages in Canada>

Robo-advisor comparability: Wealthsimple vs. Questwealth Portfolios

Wealthsimple launched its a robo-advisor, which is its managed investing service in 2014 (it then referred to as Wealthsimple Make investments). That was the identical yr Questrade added its personal providing of “pre-fab” portfolios for traders, referred to as Questwealth Portfolios. Purchasers for both spend a couple of minutes on-line, submitting solutions to questions on their age, funding targets and threat urge for food. Primarily based on the solutions, the algorithm recommends the portfolio of diversified low-fee ETFs it deems to be probably the most appropriate.
One main distinction between the 2 robo-advisor choices is that, whereas Wealthsimple presents three core portfolio choices (progress, balanced and conservative), Questrade presents 5—aggressive, progress, balanced, revenue and conservative. Each companies additionally provide socially accountable funding (SRI) variations of every portfolio. These portfolios are meant for belongings in firms that prioritize environmental and social issues and have a optimistic file on human rights and corruption. As well as, Wealthsimple presents Halal portfolios, for individuals who want to adhere to Islamic regulation with their investments. (Learn our article on Halal investing in Canada.)

The distinction between every portfolio is the ratio between higher-risk investments, equivalent to Canadian, U.S. and worldwide fairness ETFs, and lower-risk fixed-income ETFs, equivalent to bonds and GICs. An aggressive portfolio can be weighted towards riskier investments (which additionally provide the potential for better returns), whereas a conservative one will embrace extra low-risk investments. That can assist you keep that strategic asset allocation, each companies periodically rebalance the portfolios for you.

Each provide the gamut of account varieties for his or her robo-advisor companies.

Thus far, it’s same-same, proper? There are, nevertheless, just a few main variations between Wealthsimple and Questwealth Portfolios:

• Not like Wealthsimple, which depends 100% on algorithms and automation to observe and rebalance your portfolio when needed, Questwealth has precise human consultants who handle your portfolio for you, with out the excessive charges that almost all portfolio managers cost for this service. This can be thought-about or a nasty factor, relying in your standpoint. Whereas some might admire the human contact, others might want purely passive investing, the place funding choices are automated based mostly on an algorithm with none human intervention.
• Financial savings instruments are one other level of distinction. Wealthsimple has a few high quality companies which can be free and will be useful for these struggling to avoid wasting. The primary enables you to robotically make investments the 1% rewards out of your Wealthsimple Mastercard. And, in case you deposit your paycheque into your Wealthsimple money account, you possibly can arrange automated investments from there.
• Lastly, let’s take a look at their charges. To grasp how a lot every service prices, you will need to take a look at each the general administration charge (which is a share of the entire amount of cash you’ve invested) in addition to administration expense ratios (MERs), that are decided and charged on every particular person ETF by the ETF supplier—not by the robo-advisor.

• Comparability chart of Wealthsimple and Questwealth Portfolios charges

Right here’s how the charges break down, together with just a few different similarities/variations:

Must you use Wealthsimple or Questrade?

The 2 robo-advisors are good choices for Canadians who wish to outsource lively determination making for his or her funding portfolio.
When you have not less than $1,000 to take a position it’s possible you’ll wish to take into account Questwealth Portfolios as a result of offers you extra portfolio and account sort choices of the 2.
However for individuals who don’t have $1,000 available, Wealthsimple is an effective, easy, easy-to-use choice . And, whereas each provide SRI variations of their portfolios, for individuals who desire a Halal choices, it must be Wealthsimple.

Examine the most effective robo-advisors in Canada >

Comparability of different companies: Wealthsimple Money, Wealthsimple Tax, QuestMortgage

Wealthsimple Money

Wealthsimple Money launched in January 2020, providing shoppers the comfort of an unlimited-transaction, no-fee chequing account, a rewards Mastercard mixed with the advantages of a high-interest financial savings account.

The distinctive proposition of this service is the power to robotically funding the 1% money again you obtain on spending with the Mastercard—in shares, ETFs or crypto. Additionally engaging is the no-fee facet of the money account: There’s no minimal deposit required, no month-to-month account charge, and you may ship and obtain cash without spending a dime with out the necessity for any safety questions. You’ll be able to even obtain your paycheque in and pay your payments out of your money account and Wealthsimple Money can be the primary Canadian product Twitter has built-in with its Tip Jar, a function that lets customers of the social media app ship cash to one another. (Try our article on the right way to generate income on social media, even in case you’re not a “creator.”)

Different options which can be deliberate for Wealthsimple Money haven’t but come to market because of the pandemic. These embrace:

• Invoice funds
• Digital card
• Direct deposits
• Pre-authorized debit
• Apple/Google Pay
• No FX charges on purchases
• Money card
• ATM money withdrawals

Deposits in a Wealthsimple Money account are protected for as much as $300,000 by the Canadian Insurance coverage Deposit Company (CDIC)—that is 3 times the standard deposit insurance coverage protection. Wealthsimple is ready to provide this to its clients as a result of they maintain the money in belief with as much as three distinction banks—every of which offers you as much as $100,000.

Deposits in a Wealthsimple Money account are protected by the Canadian Insurance coverage Deposit Company ().

Questrade doesn’t presently have a comparable service.

Wealthsimple Tax

In early 2021, Wealthsimple launched a free tax prep and submitting service referred to as Wealthsimple Tax after buying software program maker Easy Tax. You don’t must be an current Wealthsimple shopper to make use of the service.
If you want, you possibly can pay $30 to “improve” your return, which entitles you to precedence e mail responses from Wealthsimple’s help crew and extra help if the CRA elects to audit your return. (For extra info, see our full Wealthsimple Tax evaluation.)

Questrade doesn’t presently have a comparable service.

QuestMortgage

Questrade now presents current shoppers mortgage companies supplied by Neighborhood Belief Firm. Launched in March 2021, QuestMortgage boasts low charges (4.89% to five.85% as of mid-June 2023) and beneficiant prepayment privileges (lump sum funds of as much as 20% of the unique stability yearly; and doubling up on mortgage funds at any time).
The appliance course of for a brand new or refinanced mortgage is finished solely on-line, with a crew of mortgage advisors obtainable to assist.
Wealthsimple doesn’t presently have a comparable service.

About Aditya Nain

Aditya Nain is an creator, speaker and educator who writes about Canadian investments, private finance and crypto. He has co-authored two books and taught at universities for 12 years.