One of the best ways to build over time is to invest. However, it can seem like a daunting task to get started. Many of us have a fear of investing and worry that we’ll do it “wrong” and lose all our money.

This is where a service like Wealthsimple comes in. This is a company that can help you build a balanced, diversified portfolio so that you can begin building wealth for the future. Thanks to the rise of robo-advisors, it’s easier than ever to get started and take advantage of passive investing.

My Wealthsimple review will help you understand the ins and outs of this service so that you can decide if it’s right for you.

What is Wealthsimple?

Wealthsimple is a robo-advisor that helps you create a long-term investing portfolio. Like many robo-advisors, Wealthsimple uses the idea of asset allocation based on your risk profile to put together a portfolio.

In order to get started, you are asked questions about when you plan to retire, and ability to handle risk. Using this information, Wealthsimple can put together a portfolio for you, based on different asset classes. As with most robo-advisors, Wealthsimple works best when you plan for the long term, with a goal like retirement. Use dollar cost averaging to add a set amount of money each month, and Wealthsimple will automatically invest it on your behalf.

The idea is to use low-cost ETFs to limit your fees. This means that more of your money is building your long-term wealth, rather than going toward fees. Wealthsimple uses asset-based (a diversified mix of stocks and bonds) management to passively handle your portfolio. With the help of an algorithm, it adjusts as needed as you approach retirement.

Wealthsimple has a board of directors and investment team made up of long-time Silicon Valley folks and well-known and successful investment professionals. One of the members of the investment team is Eric Kirzner, the designer of the first ETF in North America, and a Professor of Finance at the Rotman School of Management.

It’s a simple strategy, but it’s one that’s been shown to work well for most people over time. It’s boring, but you’re more likely to see good long-term results when you use a company like Wealthsimple.

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Is Wealthsimple Safe?

One of the most important things to consider in a Wealthsimple review is the question, “Is Wealthsimple safe?”

Looking to start investing? My Wealthsimple review will help you understand the ins and outs of this robo-advisor so you can decide if it's right for you.The good news is that Wealthsimple is considered one of the best financial services websites in the world.  The company won the Webby for the best financial services website. Not only that, but it is the largest robo-advisor in Canada and has the highest count of assets under management, evidence of a large client base.

Wealthsimple is a big deal in Canada already, and it is also beginning to make waves in the United States. In 2017, the company is expected to open shop in London. It’s no surprise that Wealthsimple is one of the top 100 global fintech companies.

The next thing to consider when you try to figure out is Wealthsimple safe is what happens if the company goes out of business. It’s probably not likely to go out of business, but Wealthsimple is insured. Wealthsimple has a custodial broker, ShareOwner. This company is regulated closely by the IIROC. Plus, it’s also insured by the Canadian Insurance Protection Fund. This means that your account is insured for up to $1 million against insolvency or bankruptcy. If things do go bad

If things do go bad, your assets remain yours, and can choose to keep the money with ShareOwner, or move it elsewhere. It’s important to understand this for your peace of mind.

Types of Wealthsimple Accounts

What is Wealthsimple accounts offered? The most common account is the RRSP. Many Canadians like to use this account to save for retirement. However, you can also use Wealthsimple for other accounts, including:

  • TFSA
  • Personal taxable account
  • RRIF
  • LIRA

It’s also possible to open joint accounts. You can even open a corporate account and take advantage of lower corporate income tax rates.

Plus, if you transfer an account from another broker, Wealthsimple will pay the transfer fees.

Wealthsimple Fees

In any Wealthsimple review, people want to know the fees associated with the account. What is Wealthsimple fee structure? It’s very straightforward. Wealthsimple will manage the first $5,000 in your account for free ($10,000 for MapleMoney readers).

From there, up until you reach $100,000 in your account, your fee is 0.5% of your account value annually. Once you reach $100,000, your fee drops to 0.4% annually. This is a fraction of actively managed funds. Some actively managed accounts can charge 2% annually or more.

You do need to be aware that there is a 20 basis point fee on currency conversions. If you need to buy or sell in U.S. dollars, that conversion will be charged. Additionally, expense ratios charged by ETFs aren’t included in the fee, so that will be extra. However, Wealthsimple makes an effort to use low-cost ETFs so that your fees are kept under control. Even with these fees, you are still likely to come out ahead.

Also, for a limited time, you can get free management on your first $10,000 when you sign up through the partnership with MapleMoney. As my reader, you get access to this special deal, which can save you a lot of money to get started. Sign up from this page to take advantage of this opportunity.

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Finally, you do have to be aware of the taxes associated with paying the fees. Just like you’re charged GST on your regular purchases, you are required to pay taxes on the fees you pay with Wealthsimple.

When you have under $100,000, you get automatic rebalancing for your account, to make sure that your asset allocation remains ideal. Not only that, but any dividends you receive are automatically reinvested. You can also get help from money experts to get an idea of what to do with your portfolio next.

Wealthsimple Black

Once your account balance reaches $100,000, you get a few extra perks with Wealthsimple. Your fee includes tax-loss harvesting, which can help you make the most of your tax situation during tax time. On top of that, you get a full financial planning session regularly to be sure that you are on the right track. Finally, an account balance with at least $100,000 gets you VIP access at airport lounges in 400 cities around the world. That’s not too shabby.

Wealthsimple Returns

As with all investing, returns depend on market conditions and what you’re invested in. You should also be aware that Wealthsimple returns aren’t going to be particularly exciting.

Wealthsimple is built on the ideas of Modern Portfolio Theory, the Noble-prize winning theory that holds that your asset allocation matters more than the individual stocks you hold. The rise of indexing and ETFs in the last few decades has only made it easier to apply principles of asset allocation and Modern Portfolio Theory to the portfolios of ordinary investors.

Over time, your returns will compound to grow into a nest egg that can help contribute to a comfortable retirement. It’s worth noting that studies indicate that indexing outperforms stock-picking over time. Additionally, many passively managed index funds outperform managed funds over the long haul.

Wealthsimple performance has been in line with market performance, as the company uses a diversified mix of ETFs to help ensure that you have a degree of protection and risk that is appropriate for your age and your goals. No, you won’t see anything sexy with Wealthsimple. But you are more likely to see solid returns over time and build your wealth.

Socially Responsible Investing

If you’re interested in socially responsible investing (SRI), Wealthsimple has options for you. More people want to put their money into funds that reflect their values. Wealthsimple can help you do that with its SRI ETFs. These ETFs include low carbon, cleantech, affordable housing bonds, and more. The idea is to invest in companies that promote your social values.

You can feel better about the way you make money with the help of SRI through Wealthsimple.

Wealthsimple for Work

This Wealthsimple review wouldn’t be complete without mentioning the cool benefits of Wealthsimple for Work. If you own a business, you can get help managing your Group RRSP. That’s great, because it takes some of the hassle and difficulty off your plate. If you want to offer a benefit to your employees, this can be a good way to do it.

If you sign up for Wealthsimple for Work, you don’t have to worry about administrations fees. You just pay your matching contribution, and that goes right to your employees.

Wealthsimple Review: Bottom Line

What is Wealthsimple? It’s one of the best robo-advisors in the world. It’s a great way for just about anyone to get started with long-term investing. If you aren’t interested in stock picking, but you know that investing needs to be part of your plan, Wealthsimple can be the way to go.

With its adherence to time-tested princples, and your ability to use dollar cost averaging to your advantage, it makes sense to consider Wealthsimple for building wealth long-term.

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About Tom Drake

Tom Drake is the owner and head writer of the award-winning MapleMoney. With a career as a Financial Analyst and over nine years writing about personal finance, Tom has the knowledge to help you get control of your money and make it work for you.