After extensive research and due diligence on my end, I decided to invest my hard-earned dollars with Wealthsimple. Besides their approach to invest like Warren Buffet – one of the greatest investors of all time, they’re clearly a leap ahead of ‘traditional advisors’ by making client investment experiences better. Here’s why:

 

Wealthsimple’s investment approach is backed by Nobel Prize-winning research.

Wealthsimple’s portfolios are built from exchange traded funds (ETFs) passively invested based on the Modern Portfolio Theory, which studies have shown, beats active investing (stock picking) over 90% of the time in the long run. In other words, don’t fix it if it ain’t broke! Is gambling your retirement savings worth the risk by following “hot stock” media hype? 

 

The online and app experience are so easy, a child could use it (and that’s hard to achieve).

I don’t have time to go through a confusing online sign up process, only to be told I have to meet with a branch advisor for a sales pitch for other financial products. The Wealthsimple  sign up process is a breeze and checking the performance of your portfolio or locating financial statements for tax purposes couldn’t be more simple (no pun intended).

 

Do you know what traditional advisors and big banks charge in fees? (they may prefer you look the other way).

Ah, the infamous Mutual Funds! A term we’re all familiar with, but didn’t realize they’re financial products designed to make the parent fund companies rich, while investors remain naive to fees gnawing away at their wealth. MERs, Sales Fees, Trailer Fees, Front-end Loads, Back-end Loads, No-Load Funds…confused yet? These are just fancy terms for “we’re going to nickel and dime you with fees.” Sure you don’t receive a bill, but did you think your advisor works for free? Over the course of decades and factoring in compound interest, just 1 percent saved in fees could easily pay for a down payment on a house or be enough to retire a year early. Still think fees don’t matter?

Here’s how it really works. Parent fund companies take your local investment firms/advisors out to sporting events or concerts, while they wine and dine them like it’s Valentine’s Day. After playing footsie for a while, your investment firm may decide to include their fund as part of your investment portfolio. If they’re getting rich from fancy fees, then what motivation do they have to maximize the performance of the fund? It’s no wonder over 80% of all active funds under-performed their market benchmarks (some would argue even higher).

What does Wealthsimple charge? A fraction of what the Big Banks charge! To create and maintain an intelligent, personalized portfolio: 0.5% if you invest $100,000 or less; 0.4% if you invest over $100,000. There’s no rebalancing fees, no account transfer fees and no trading fees. Sign up through my solowealth referral and get $10,000 in assets managed FREE for 12 months. Get an additional $10,000 managed FREE for 12 months, for every person you do the favour of introducing to Wealthsimple. End result? More money in your pocket. Anything confusing about that?

 

Traditional advisors may require account minimums to invest with them. Wealthsimple? Get started with the change under your couch. 

This is a game-changer! Many people (particularly young) don’t even start investing because of barriers they face with ‘account size minimums’ required by many traditional advisors. Since advisors are compensated by fees based on the size of ‘assets under management,’ they may not bother with you unless you approach them with a briefcase full of cash. It kinda reminds me of walking into a luxury brand store and getting that “buy something or get out” look from the snobby sales associate.

The solowealth financial plan suggests saving at least 20% of every paycheck and then live off the remaining 80%.  With that 20% you set aside,  place 15% in a Wealthsimple investment account of your choice and save 5% for unexpected emergencies, ie. a vehicle or home repair. You should never touch your emergency savings fund, unless it’s a ‘true’ emergency. Shopping for new shoes or paying for pizza delivery doesn’t qualify to tap into your emergency fund. My suggestion is to set up auto-deposits [pre-authorized contributions], otherwise you’ll just spend what you have before you get the chance to invest it.

 

Invest with a clear conscience.

For those of you prefer to invest in companies that align with your values of social responsibility, considering such factors as greenhouse gas emissions, gender diversity or affordable housing, Wealthsimple offers the SRI portfolio – Socially Responsible Investing. And yes, it’s possible to invest in a better world without sacrificing performance. Much respect to you (and Wealthsimple) for acknowledging this investment option.

 

Wealthsimple seems refreshingly new compared to traditional financial companies. But is it stable and established?

Facts:

• Over 100,000 clients trust them to manage over $3 billion and counting
• Up to $500,000 SIPC protection
• State-of-the-art security with encryption
• Backed by the Power Financial Group, one of the world’s largest financial holding companies
• Webby Award winner for World’s Best Financial Website (it’s like the Oscars for nerds)

 

Technology + Human Advisors. You get the best of both worlds.

It’s nice to have an efficient, automated experience without having to contact an associate for every little thing. But it gives me peace of mind knowing I can communicate with an expert advisor when questions come up such as a portfolio review, goal setting or tax minimization. Call, text or email them anytime you need money advice. If that’s not enough, you’ll also have access to informative articles to expand your financial knowledge, each written in a format that’s a pleasure to read.

My goal isn’t to convince you to invest with Wealthsimple but to consider reasons why you wouldn’t. If you find a better solution, please feel free to contact me and I’ll immediately look into it and delete this post if necessary. I refuse to share a service with fellow solowealthers I wouldn’t use myself. Otherwise, if you’re ready to build wealth while having fun doing it, you can get started here.

Happy Investing!

Varinder,

Co-Director,

Comments are closed.