Wealthsimple Trade: Zero Commission Stock and ETF Trading in Canada

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by Enoch Omololu

Updated

Advertiser Disclosure

Wealthsimple is one of the most popular robo-advisors around the world, with operations in Canada, the U.S. and U.K.

When it launched its robo-advisory services in Canada in 2014, it ushered in an era of low-cost investing that has made it easier for everyday investors to access low-cost exchange-traded funds (ETFs).

Wealthsimple Trade is one of the company’s latest product offerings. Its other recent product lines include Wealthsimple Crypto and Wealthsimple Tax.

Much has been said about the true impact of high management fees on mutual fund investing. With average fees as high as 1.98% for equity mutual funds, Canada has consistently received the award for some of the highest investment fees among developed nations.

What high and unrelenting fees do is dampen the overall returns that mutual fund investors make in the long run. And, it doesn’t help that mutual fund managers rarely beat their index benchmarks.

What is Wealthsimple Trade?

On August 16, 2018, Wealthsimple teased DIY investors in Canada with something exciting –  a $0 commission, no account minimum, unlimited FREE trades brokerage service.

This trading service is now fully launched and gives you access to more than 8,000 popular stocks and ETFs listed on major Canadian and U.S. brokerages.

In general, when you want to buy and sell individual stocks and ETFs using a self-directed discount brokerage account, you pay up to $9.99 per trade. As such, a zero trading commission for both “buy” and “sell” transactions is a first in Canada.

Users of Wealthsimple Trade have access to a top-notch mobile app that ensures they can trade on the go and they can also trade using their tablet or laptop.

You can open non-registered personal investment accounts, RRSP and TFSA accounts.

How To Open a Wealthsimple Trade Account?

New users can get started with trading in as little as 5 minutes and the Wealthsimple Trade app is available on both iOS and Android. Sign up here to get a $25 cash bonus.

The app offers the following benefits:

  • Unlimited commission-free trades
  • Buy and sell thousands of stocks and ETFs
  • No account minimum – start trading with as little as $1
  • Minimal paperwork requirement
  • Search and track stocks easily
  • Top-notch encryption to protect your account
  • CIPF protection up to $1 million

In order to be eligible to open an account and trade, you will need to be:

  • A resident of Canada
  • At least 18 years old
  • Have a Canadian SIN and address

Wealthsimple Trade Zero Fees: How Does It Make Money?

Since Wealthsimple Trade will charge $0 trading commissions, it begs the question: “How will they make money?” Businesses exist to make a profit, eh?

As per their website, they will make money on “currency exchange for U.S. trades,” and on other premium offerings that are going to be introduced in the future.

If you are wondering what fees are like when you buy and sell stocks and ETFs at other brokerages in Canada, here is a summary:

Wealthsimple Trade
Source: Wealthsimple

Wealthsimple vs. Wealthsimple Trade

Wealthsimple Invest is the robo-advisor service that offers automated low-fee investing to investors who want a hands-free approach to their portfolio at the lowest fees possible using ETFs. Account-holders receive automatic re-balancing of their portfolio and free financial advice.

You can open different kinds of accounts on Wealthsimple Invest including RRSP, TFSA, RESP, RRIF and LIRA (Canada), or Traditional IRA, Roth and SEP IRA’s (United States), and ISA and JISA Individual Savings Accounts (United Kingdom).

It also provides non-registered investment accounts in all three countries.

Wealthsimple currently has hundreds of thousands of clients and over $8.4 billion in assets under management.

You can get a $75 bonus when you sign up here for a new Wealthsimple Invest account.

Wealthsimple Trade provides a trading service to self-directed investors who want a hands-on approach to their investing and who would like to purchase individual stocks and ETFs to make up their investment portfolio.

You can trade with as little as $1 and there are no trading fees.

Client accounts (Canadian) with both Wealthsimple Invest and Wealthsimple Trade are protected by the Canadian Investor Protection Fund (CIPF) up to $1 million.

GET WEALTHSIMPLE TRADE

Related reading:

Conclusion

The prospect of getting to buy and sell ETFs and stocks at zero fees is compelling. While a hands-on investment approach is not for everyone, self-directed investors will be glad to save even more money on their investments.

The absence of a minimum balance also means you do not need thousands of dollars to try out DIY investing.

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Author

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Enoch Omololu

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. His writing has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, Financial Post, Toronto Star, Credit Canada, MSN Money, National Post, CIBC, and many other personal finance publications.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

12 thoughts on “Wealthsimple Trade: Zero Commission Stock and ETF Trading in Canada”

  1. The only caveat is that only Android 6 and higher are supported. Bummer there. Cannot install it on my phone and tablet as they are running 6.0.1 version.

  2. Any chance of a demo account…try before you buy type thing. Hearing there is a 15min+ delay on quotes so not ideal for day trading.

    • I don’t believe there is a demo account functionality. And, yes, it’s not ideal for day trading.

  3. Can you open a joint non-registered account w/spouse and if so, how?

    • As per Wealthsimple’s website:

      “Currently Wealthsimple Trade only supports individual, non-registered cash accounts. That being said, we do hope to support other account types (such as RRSPs and TFSAs) in the future! Unfortunately we do not yet have a timeline on when these additional accounts will be supported, but we appreciate your patience in the meantime!

      Account types not currently supported:
      TFSA
      RRSP
      Joint
      Corporate
      Margin”

      However, you can open a joint account with your spouse for investments and savings. The option becomes available after your initial onboarding.

      • TFSA accounts are now supported.

  4. I’m trying to figure out what fees I incur if I only buy and sell in US stocks, and if it’s worth it? Is this where Questrade has the edge in your opinion?

    Thanks

    • @Bash: All brokerages charge for transactions that include foreign currencies. Where Questrade may have an advantage is likely to be with their wider range of trading tools and the universe of stocks, ETFs, mutual funds, options etc. you can trade.

  5. Is there any possibility that corporate accounts would be allowed to open?

    • @Manu: Not currently, but hopefully in the future, similar to Questrade. RRSP and TFSA accounts are now available, and they keep adding features.

  6. Can I trade OTC (Over The Counter) shares without phoning in the order?

    • @Guy: Wealthsimple Trade does not currently support securities that trade OTC.

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