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Thanks to the continuing growth of robo-advisors and self-directed discount brokerages, the last few years have been an opportune period for Canadians looking to expand their investment portfolios, while taking advantage of shrinking fees. Two of the standout online discount investment services in Canada are Questrade and Wealthsimple Trade.
Questrade came onto the investment scene in Canada in 1999 as the first real low-cost alternative to traditional, high-fee investment platforms. It remains the largest discount brokerage service in the country and also offers a robo-advisor service called Questwealth Portfolios. Wealthsimple began in 2014 as a robo-advisor, and in 2019 introduced Wealthsimple Trade for Canadians seeking a more self-directed approach to investing. This launch was met with a great deal of interest and excitement as it was (and still is) the only investment platform in the country with no trading fees. It has also since launched more services including Wealthsimple Cash (a hybrid high-interest savings account) and Wealthsimple Crypto, which allows you to buy and sell Bitcoin and Ethereum instantly, through the Wealthsimple Trade app.
While Questrade and Wealthsimple Trade are both online-only, low-cost brokers, they have a number of distinguishing features that will appeal to different types of traders. We’ve broken down some of the key differences to help readers decide the best platform for their portfolio.
Pros and Cons of Wealthsimple Trade and Questrade
|Wealthsimple Trade||No commission fees||Does not support USD accounts|
|No minimum investment||Foreign currency conversion fee of 1.5%|
|No inactivity fees||Minimal asset information and investing resources provided|
|Accessible via computer, phone or tablet||Limited investing assets and account types available|
|Questrade||Supports USD accounts||Charges fees for almost every type of trade|
|Detailed asset and market info||Foreign currency conversion fee of 2%|
|Large selection of investing products and account types||$1000 minimum investment|
|No inactivity fees|
|Accessible via computer, phone or tablet|
Account types are of significant concern to traders because many will want to hold investments (rather than just straight cash) in specialized and tax-favourable, registered accounts like RRSPs and TFSAs.
Wealthsimple Trade currently allows you to hold your assets inside only a few types of accounts, such as a TFSA, RRSP or a personal investment account. Wealthsimple Trade also does not allow margin accounts. The website notes, however, that the company is working on increasing its account types.
Questrade clients can hold investments within a very impressive range of accounts like an RRSP, RESP, margin account, corporate investment accounts, LIRA, LIF and TFSA.
Who Does It Better: Questrade’s wide range of accounts beats Wealthsimple’s quite limited selection.
When it comes to what kind of assets you can purchase through your trading account there are significant differences between Wealthsimple Trade and Questrade. Questrade offers a much larger spectrum of products, much more like the offerings you would be able to buy in a non-discount, traditional brokerage. Questrade users can buy and sell investment products like mutual funds, options, bonds and GICs, OTC assets, IPOs, international equities (aside from just the US) and even precious metals.
Wealthsimple Trade’s platform has much less choice, offering access only to U.S. and Canada-listed stocks and ETFs.
Who Does It Better: With its incredible variety of ETFs, stocks and assets like precious metals, Questrade wins in the investment product department.
Wealthsimple Trade is the only investing platform in Canada that doesn’t charge commission fees for buying and selling stocks and ETFs. Furthermore, there is no minimum investment needed to open a Wealthsimple Trade account, and Wealthsimple Trade will reimburse an outgoing administrative transfer fee up to $150 on investment account transfers valued at more than $5,000. In addition, they’re offering new account holders a the following Welcome Offer: For a limited time, get a $50 cash bonus when you open a Wealthsimple Trade or Crypto account and deposit and trade at least $150. Sign-up today to take advantage of this exclusive offer!
It’s important to note that although Wealthsimple Trade does not charge commission fees, it does of course need to make its money somewhere: Wealthsimple Trade charges a foreign currency conversion fee of 1.5%, and because it does not support USD accounts, this effectively means you will be charged every time you buy or sell a US-listed security.
Questrade charges a range of fees depending on what kind of investment you want to buy or sell. With stocks, accountholders are charged 1 cent per share and a minimum of $4.95 per trade, up to a max of $9.95 each trade. Precious metals are US$19.95 per trade. There is no charge for buying IPOs or ETFs. Questrade requires a minimum deposit of $1000 to open an account, but no longer charges inactivity fees.
It’s also worth noting that while Questrade allows margin account holders to borrow funds to invest, you will have to pay interest. Currently the interest rates are 2.45% for Canadian funds and 3.25% for US funds. Note that interest rates can change so check the website to be sure of the rate.
Questrade differs from Wealthsimple Trade in that, although it does charge a foreign currency conversion fee of 2%, it supports USD accounts. So those with USD can trade American securities to their hearts content. Like Wealthsimple Trade, Questrade covers transfer out fees up to a max of $150 per account.
Who Does It Better: Wealthsimple Trade wins when it comes to fees. The lack of USD account support is annoying, but you can’t beat free Canadian trades, and the no-fee structure also makes it easier for newbie investors with less capital to give trading a try.
Wealthsimple is well known for its attractive, easily-navigable website, and this crosses over to the user experience for Wealthsimple Trade. It’s a quick, simple system for buying and selling stocks. That said, much of this ease of use and streamlined simplicity comes at a cost. Analysis tools are limited, users will have to go elsewhere to get in-depth information about a stock, and you can’t set automatic trades.
Because of its information-heavy approach, Questrade’s platform is much less streamlined than Wealthsimple Trade’s. Questrade’s website is loaded with charts and sidebars that allow users to access info on news reports, alerts and data. While this information is handy, it can be intimidating and overwhelming for someone who is new to investing. Because of all the additional information, the website can appear overly busy and complicated for less experienced investors.
Who Does It Better: Tie. While Wealthsimple Trade’s platform is easier to navigate and cleaner, Questrade’s has more complete analysis tools.
Unlike passive investors who prefer a more hands-off approach like you would get using a robo advisor, active investors often enjoy following the market and staying on top of all the latest stock info and trading stats. Therefore, any added features that give users access to extra info and research are much appreciated. Questrade provides users with the latest stock research, market updates, news releases, important statistics and lots of in-depth analysis on stock markets and trading activity from around the world. It also features real time quotes so users get factual, up-to-the-second data.
Wealthsimple Trade is much more pared down, with very few of Questrade’s bells and whistles. Within your Wealthsimple Trade account you can add a stock to a personalized Watch List, and see some basic info about the stock like specific opening and closing stock prices, as well as the highs and lows of an equity over a 52-week period. For any kind of additional stock analysis or business news concerning an asset, you’ll have to go outside the platform and do your own research. Furthermore, Wealthsimple Trade does not support real time quotes; quotes are delayed by 15 minutes. While this lag may not seem like much, for a serious trader it would be considered a major weakness because, in the investing world, a lot can happen in 15 minutes!
One nice extra offered by both brokerages is a special welcome offer for new accounts: Wealthsimple Trade gives a $50 cash bonus for new accountholders who deposit and trade at least $150; Questrade gives $50 in free trades for new accounts opened with at least a $1,000 balance.
Who Does It Better: For the sheer volume of extra information, news updates, market analysis and extensive data, Questrade beats Wealthsimple Trade.
Head to Head Comparison of Wealthsimple Trade and Questrade
|Trade Commission Fees||None||$4.95–$9.95 per trade|
|Foreign Currency Conversion Fee||1.5%; cannot hold USD accounts||2%; but you can hold a USD account|
|Account Types||TFSA, RRSP and personal||TFSA, RRSP, RESP, LIRA, RIF, LIF, personal|
|Investment Products||US and Canadian ETFs and stocks only||ETFs, stocks, international equities, precious metals and more|
|Supported Platforms||Desktop and mobile||Desktop and mobile|
|Reimburse Transfer Fees||Yes, for accounts over $5000 (up to $150 in fees)||Yes, up to $150 in fees|
Who Comes Out on Top?
Overall Winner: Questrade
Wealthsimple Trade and Questrade clearly have their own very distinct attributes and imperfections. But Questrade is my favourite overall. Though it does charge fees, they’re not unreasonable, and serious DIY investors will appreciate the sophisticated tools and plethora of products and account types Questrade offers.
On the other hand, I don’t dismiss Wealthsimple Trade’s relevance, particularly for those who are getting their feet wet with self-directed trading. The streamlined, easy-on-the-eyes app makes it approachable for those who might be easily overwhelmed by a data and research-heavy platform. The no-fee trades are also an incredible perk.
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