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Wealthsimple Trade review: Canada’s only Zero-commission trading platform

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Wealthsimple Trade is Canada’s first and only zero-commission trading platform. In this Wealthsimple Trade review I’ll explain how you can buy AND sell from among the thousands of stocks and ETFs listed on North American exchanges without paying any fees.

I first heard about Wealthsimple Trade in 2018 when it was announced as a new self-directed investing platform that lets investors buy and sell stocks and ETFs with no trading commissions. They invited users to join a wait list and, once they attained a critical mass (130,000 participants), rolled out a beta version for users to test the platform and offer feedback.

Wealthsimple Trade officially launched in March 2019 and at that time only supported non-registered trading accounts. Later that year, the platform added RRSP and TFSA account types to its lineup. That’s when I became interested in the platform for my own self-directed investing needs.

Get a $10 cash bonus and commission-free trades when you open a Wealthsimple Trade account and deposit and trade at least $100 worth of stock.

Why I switched to Wealthsimple Trade

I’ve held my investments at TD Direct Investing since 2009. It was out of convenience, more than anything, since I had banked with TD since I was a teenager. Back then trades disgustingly cost $29 per transaction. Today, they’re still a painful $9.99 per trade. I had enough when I noticed I paid a total of $190 in trading commissions with TD last year. No more.

I opened a Wealthsimple Trade account on January 13 2020, with the goal to bring my trading commissions down to zero. That same day, I initiated the transfer of my entire RRSP and TFSA account balances. Both of these accounts were invested in Vanguard’s all-equity balanced portfolio – VEQT – and so I requested an in-kind transfer which simply transferred the shares from TD to Wealthsimple Trade without first having to sell them.

An email from Wealthsimple suggested an expected wait time of up to five weeks to complete a transfer request with TD. But to my surprise I noticed the funds in my Wealthsimple Trade account on January 21 2020: just seven business days later.

Now that you have the back story, let’s take a look at the platform.

About Wealthsimple Trade

As mentioned, Wealthsimple Trade launched in March 2019 as Canada’s first and only zero-commission trading platform. It’s a separate, yet complementary service to Wealthsimple’s main business as Canada’s top robo advisor. With offices in Canada, the U.S., and the U.K., Wealthsimple manages more than $5 billion in assets worldwide.

Related: How to transfer your RRSP to Wealthsimple

Automated investing through a robo-advisor isn’t for everyone. Some investors want to take the reins themselves, build their own custom portfolio, and make trades in their own self-directed account. Enter Wealthsimple Trade.

While most online brokerages charge $9.99 per trade, Wealthsimple Trade doesn’t charge anything to buy and sell stocks or ETFs. It doesn’t charge account fees or have any account minimums to get started.

To get the costs down to the bare minimum (zero) the platform strips out all of the expensive bells and whistles. You won’t find cutting edge research or real-time quotes (there’s a 15-minute lag). Wealthsimple Trade also started out as a mobile app – on your smart-phone or tablet – with no desktop platform access. That, thankfully, has changed and Wealthsimple Trade now offers desktop access (January 2021):

But for self-directed investors who want to build a simple low-cost portfolio of index ETFs, and who want to contribute frequently without getting dinged each time they buy or sell, Wealthsimple Trade is the perfect platform.

Signing up and opening an account

How do you open an account? Easy. Download the Wealthsimple Trade app on your Apple or Android device and select ‘Get Started’. From there, follow the prompts to enter your information and agree to your account documents.

Note that even though the Wealthsimple Trade app is NOT connected at all to the Wealthsimple robo advisor platform: existing Wealthsimple clients can skip some of the preliminary questions.

Here’s what you’ll need to get started:

  • Full Name, Email, Mailing Address, Phone number, Date of Birth
  • Social Insurance Number
  • Employment information

There are no account minimums or fees associated with opening the account. To fund it, though, you’ll need to link a chequing or savings account.

Transferring investments to Wealthsimple Trade

Transferring my existing investments to Wealthsimple Trade couldn’t have been easier. As mentioned, I initiated the transfer on January 13, 2020. I entered a few details about the accounts I was transferring, selected the institution (TD) from a list of choices, and snapped a picture of my account statements.

WS Trade covers transfer fees

WS Trade Uploading your Account Statement

Next, I indicated how I wanted the transfer to take place. Typically, you can choose to transfer funds in cash, meaning your institution sells your current holdings and then moves the money. If you go this route, you may incur DSC or trading fees. Note that your contribution room or taxes won’t be affected when you transfer a non-taxable account like an RRSP or TFSA.

Instead, I chose to transfer my account in-kind or “as-is.” This means your institution transfers your entire account. Note that Wealthsimple Trade only accepts the transfer of stocks and ETFs. You’ll have the option to sell non-eligible assets like mutual funds, bonds, or options, or leave them with your institution.

As I said earlier, the entire transfer process took just seven business days. Your mileage may vary.

Using Wealthsimple Trade

Wealthsimple Trade works like any other online brokerage, with the exception that it’s a mobile-only platform. There’s no desktop support. Continue Reading…

The great thing about managing Other People’s Money

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By Michael J. Wiener

Special to the Financial Independence Hub

 

The great thing about managing other people’s money is that you can dip into it to pay yourself.  This might sound unethical or illegal, but it’s perfectly legal if the owners of the money agree to it.

I use the word “agree” in a technical sense here; you really just have to get people to sign a document that points to other documents that bury the details of how you pay yourself from their investments.  You might think that once people notice some of their money is missing, they would become wise to your scheme, but most people don’t notice.  You might think that once such schemes are exposed in the media, people will see that they’ve been had, but most people who read essays like this one just don’t believe it applies to them.  The sad truth is that millions of Canadians allow others to take their money this way.

How to consume 25 to 50% of your savings over a quarter century

Average Canadians invest much of their savings in mutual funds, segregated funds, and pooled funds offered by banks, insurance companies, and independent mutual fund companies.  The bulk of these savings are invested in funds whose managers dip into the funds to pay themselves and their helpers at a rate that will consume between one-quarter and half of investors’ savings and investment returns over 25 years.  This fact seems so incredible that most people will feel sure that it is wrong or at least that it doesn’t apply to them.  But this draining of Canadians’ savings is real.

There are laws that require sellers of funds to disclose how much they take out of people’s savings each year.  For example, when you first bought into a fund, you might remember receiving a large document called a prospectus that you found to be incomprehensible.  Don’t feel bad; it’s designed to be incomprehensible because it contains news you wouldn’t like that might stop you from buying the fund.  At least once a year your account statements have to include information about fees that get deducted from your savings, but these disclosures are often confusing, and they don’t have to include everything you pay. Continue Reading…

The MoneySense ETF All Stars 2021

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MoneySense has just published the 9th edition of the ETF All Stars, 2021 edition. As you can read in the  overview, this amounts to the Pandemic Recovery edition. The full package is available online here. Below we summarize the main picks by category: click on the highlighted headline [in red] for each category to go to the full MoneySense commentary as well as the accompanying charts showing ETF names, ticker symbols, fees and general description.

We again had eight panelists: the same as last year, except that regular Hub contributor Mark Seed of My Own Advisor replaced departing Dave Nugent. The format consists of the eight experts “voting” on which funds to retain and which to replace, with five out of eight votes carrying the day. (I get involved only if there is a 4-4 tie.)

Since our philosophy is to retain as many earlier picks as possible — provided they still meet our criteria of broad diversification and low cost — we ended up with 52 picks this year, just two more than in 2020: 44 selections were agreed-upon winners, plus there were 8 Desert Island picks (see below).

However, there were more new additions than that might suggest, since we also dropped a few ETFs from last year, notably in the ESG and Low Volatility categories.

Canadian Equities

All five Canadian equity ETFs return: VCN, XIC, HXT, ZCN and ZLB (see the chart at MoneySense for full ETF names). However, no new funds were added: We considered adding five new names but none attracted the five-vote majority necessary.

Remember that Canadian stocks are also amply represented in the One-Decision Asset Allocation ETFs discussed below.

US equities

The panel opted to retain all seven of our 2020 U.S.-equity ETF picks, while (finally!) adding two technology ETFs and a Vanguard all-cap total market fund (VUN), for a total of ten. That makes for a crowded category but after all the US is the biggest single geographic market in the world and investors have certainly been rewarded for being there in recent years: especially in 2020.

Returning picks are XUU, iShares’ US Total Market ETF; and three low-cost plays on the S&P500 index: VFV and VSP from Vanguard, and BMO’s ZSP. There was also the returning Desert Island pick from PWL’s Cameron Passmore: Avantis US Small Cap Value ETF [AVUV.]

International and Global equities

The panel retained six of the eight international or global ETF All-stars from 2020: two from iShares (XAW and XEF), three from Vanguard (VXC, VEE and VIU) and BMO’s low-volatility pick ZLI. Two other new picks introduced in the 2020 edition didn’t make the cut this time: iShares Edge MSCI Min Vol Global Index ETF (XMW, 0.48%), and CI First Asset MSCI World Low Risk Weighted ETF (Unhedged, ticker: RWW/B).  There was also a new international Desert Island pick from PWL’s Ben Felix: Avantis International Small Cap Index Fund (AVDV).

Fixed Income

While our panel as a whole continues to take a “stay with the program” approach to its fixed-income All-Star picks, we did cut back slightly on the number of Bond ETFs this year.  Only six of the eight previous fixed-income All-star picks returned: ZAG, VAB, VSB, ZDB, XSB and VGAB. One added last year, TLT, did not return, and long-time pick BXF also did not make the cut in 2021. Continue Reading…

Book Shop Remix: Where would you shelve Retirement?

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By Mark Venning, ChangeRangers.com

Special to the Financial Independence Hub

 

If you slid into your virtual bookshop to look for a book on the subject of Retirement, where would you begin? A keyword search would likely begin with the phrase “books on retirement” and …

Kaboom! An explosion of titles appear. Depending on your mindset, where your thinking was at a given moment, what triggering event gave rise to a conversation, you would gravitate to where? Titles such as The New Retirementality – Redefining Retirement: New Realities for Boomer Women– How to Retire Happy, Wild, and Free – Purposeful Retirement – What Retirees Want. Only a slice of texts on an almost endless bookshelf, which began to expand after 2004.

In the year 2001, while working as a consultant at a career services firm, (aka Career Transition/Outplacement), a managing partner asked me to deliver a Retirement program. For the first time since the late 1980’s, a corporate client suddenly requested a set of workshops for their employees approaching what they prescribed as retirement age. When I looked through the thick Retirement binder with its referenced reading resources, I ached in the head after what I read.

Sparing the colourful expletives, my response to the managing partner the next day was that I needed to re-design the whole thing before I dared to set foot inside that corporate boardroom. We needed to not only be contemporary, but we also had to be futuristic, to constantly respond to changing attitudes on what I then described as later life journeys as opposed to Retirement. The trouble was it would all seem too cryptic, too ethereal in concept unless I spoke of Retirement.

In prep for the Retirement re-design, I scoured bookshelves to see what new thinking was prevailing at the time and, to my disappointment, there wasn’t much that ground breaking. Much of the material was from the mid to late 1990’s. When you walked into a bookshop, you would find these “Retirement” books in the Business section, likely under the sub shelf “Financial Planning.” The issue with many of these was that specific references became quickly time stamped “out of date.”

Scouting out the extravaganza of Retirement books

While still shelving Retirement books in the Business section, they are usually broken into two categories – Financial Planning and Lifestyle Planning, you may wander into the Careers section – Retire Retirement: Career Strategies for the Boomer Generation for example. With luck, visit Self Help (DIY retirement is a thing). One recommended book I found sits in the Christian Living section. Try fiction! Yes, there are those too; and no doubt, somewhere out there is a Boomer Retirement book club discussing the latest find.

Over my twenty years of scouting out the extravaganza of Retirement books there have been a few peaks in inspired writing and in some cases the writing, aimed at a corporate audience, advised on how organizations should be prepared to “survive the graying of the workforce” and be ready for the “looming wave of Boomer retirements.” Yet there is a trip wire here.

A funny thing happened on the road to Retirement. Where I live, in Ontario Canada, even with the provincial government prohibition of mandatory retirement (with the odd exception) in 2006 there continue to be sinister ways Retirement conversations with employees occur in the workplace. Continue Reading…

What about the Bond Market?

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By John De Goey, CFP, CIM

(Special to the Financial Independence Hub)

Over the past several months, much has been said about the stock market, and for good reason.  What can be lost in the shuffle is what has been going on concurrently in the bond market.  It’s at least as bad. Therefore, if you’re worried about stock valuations, you should probably be really, really worried about bond valuations.  There are, in my view, a lot of borderline reckless income ‘investors’ out there who hold bonds simply because of industry dogma.  Bullshift applies to bonds, too.

Some observers fear inflationary pressure on the horizon.  I’m less convinced, but still, real yields have moved higher due to both an improved growth outlook and additional expected fiscal stimulus.  Today, many people seem comfortable in referring to the environment as the ‘end of the bull market’ in bonds.  The obvious next question is: ‘does that mean we are at the beginning of a bear market in bonds?’.  To me, this is a distinct possibility.

After 40 years, interest rates can’t go much lower

For nearly 40 years, interest rates have been dropping throughout the western world.  Now, we’re at the point where, as a practical matter, they can’t really go lower.  We’re also at a point where, policy guidance from central bankers notwithstanding, rates might have to rise sooner than we thought if the inflationary pressure some expect begins to materialize. Continue Reading…