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    • Wealthsimple Review 2023: Best Robo-Advisor in Canada?

    In this Wealthsimple Canada review, we will delve into the platform’s functionalities, advantages, drawbacks, its legitimacy and safety, strategies for securing a sign-up bonus, and important fee considerations.

    Wealth simple, often touted as Canada’s premier digital wealth management platform, has amassed over $15 billion in assets under management. It offers a streamlined approach to managing your investments, reducing fees, and growing your wealth. In addition to its robo-advisor platform, Wealth simple presents several financial products catering to the needs of more than 1.5 million clients.

    Pros:

    1. Top Robo-Advisor in Canada
    2. Automatic Portfolio Rebalancing
    3. Dividend Reinvestment
    4. Secure Platform
    5. Tax-Loss Harvesting
    6. Free Financial Advisory Services

    Cons:

    1. Management Fee of 0.50%, not the lowest in Canada
    2. Limited Account Funding Options (only bank transfer/EFT)
    3. Deposits may take several days to reflect in your balance

    How Wealthsimple Works

    Wealthsimple’s approach aligns with passive investing strategies, which aim to achieve market returns by holding a diversified portfolio at lower costs, rather than actively trying to outperform the market. This strategy has gained prominence for its ability to minimize fees, maximize returns, and eliminate the often mediocre results associated with active fund managers.

    Wealthsimple Invest, their flagship service, utilizes technology and a diversified portfolio of low-cost ETFs, following the Modern Portfolio Theory by Nobel Laureate Harry Markowitz. These funds are diversified across global markets and industries, reducing risk, minimizing costs, and optimizing returns.

    Investors can utilize Wealthsimple’s web interface or their mobile app to invest seamlessly.

    Wealthsimple Investment Accounts in Canada:

    Wealthsimple caters to various financial needs through a range of account types, including:

    • Tax-Free Savings Account (TFSA)
    • Registered Retirement Savings Plan (RRSP)
    • Registered Retirement Income Fund (RRIF)
    • Locked-in Retirement Account (LIRA)
    • Registered Education Savings Plan (RESP)
    • Non-registered investment accounts (personal and joint)
    • Corporate investment accounts

    Opening a Wealthsimple Account

    Creating an account with Wealth simple is straightforward:

    1. Visit Wealth simple through our exclusive link (which includes a cash bonus).
    2. Fill in your details and complete a questionnaire to determine your investment profile. You’ll receive a personalized plan and asset allocation based on your risk tolerance.
    3. Choose your desired account type, such as RRSP, TFSA, RESP, or transfer an existing account from another provider.
    4. Opt for automated contributions if you prefer.
      5. With this, you’re all set to begin your investment journey. Wealth simple also offers easy access to financial experts and advisors via phone, email, or Skype if you have questions.

    Wealthsimple Portfolios and Investment Products:

    Wealthsimple offers three primary portfolio types:

    1. Conservative: 30% stocks/70% bonds
    2. Balanced: 50% stocks/50% bonds
    3. Growth: 75-90% stocks/10-25% bonds
    Each portfolio comprises a selection of index ETFs, ensuring diversification and cost-efficiency.

    Benefits of Wealthsimple Invest:

    All Wealthsimple account types come with several benefits, including:

    • Automatic Rebalancing: Your portfolio stays on track with automatic rebalancing.
    • Personalization: Customized portfolios tailored to your financial needs and risk tolerance.
    • Free Financial Advice: Access to in-house financial advisors for guidance.
    • Automatic Deposits: Schedule automatic contributions to simplify investing.
    • Dividend Reinvestment: Dividends are reinvested automatically.
    • Security: Wealth simple is insured by the Canadian Investor Protection Fund (CIPF), offering protection of up to $1 million in case of insolvency. Rigorous encryption safeguards your personal and financial data.

    Wealth simple Black and Wealth simple Generation accounts also offer:

    • Tax-Loss Harvesting: Assistance with tax optimization.
    • Full-Service Financial Planning: Comprehensive financial planning sessions with experts.

    Downsides of Wealthsimple:

    While Wealth simple offers numerous advantages, there are a few drawbacks to consider:

    1. The management fee of 0.50% is not the lowest among Canadian robo-advisors.
    2. Limited access to financial tools and reporting on your account dashboard.
    3. Limited account funding options (only bank transfer/EFT).
    4. Deposits may take some time to reflect in your balance.

    Wealth simple Account Fees:

    fee structure varies based on your account type:
    • Wealth simple Basic accounts (under $100,000): 0.50% management fee per year
    • Wealth simple Black accounts ($100,000 to $500,000): 0.40% management fee per year
    • Wealth simple Generation (over $500,000): 0.40% management fee per year
    Additional fees may apply, such as MERs charged by ETF managers, approximately 0.20%.

    To emphasize the significance of fees

    To emphasize the significance of fees, robo-advisors offer a cost-effective alternative to traditional mutual fund managers. For instance:
    • Wealthsimple Basic: On a $50,000 portfolio, fees amount to $350 per year.
    • Mutual Funds (average fees on equity mutual funds): On the same $50,000 portfolio, fees can exceed $1,100 per year.
    • Savings with robo-advisor: Approximately $750 saved in fees annually.
    Wealthsimple also covers transfer fees for accounts valued over $5,000, making it easier to switch to their platform.

    Wealth simple – Socially Responsible Investing:

    Wealthsimple caters to socially responsible investing (SRI) preferences with portfolios that align with companies supporting social and environmental impact, such as those promoting low-carbon emissions, gender diversity, affordable housing, and human rights.

    Wealth simple Returns and Performance:

    Returns from Wealth simple portfolios depend on various factors, including risk level, diversification, and fees. While past performance can offer insights, the unpredictable nature of the financial market makes it impossible to reliably predict future returns.

    Wealth simple maintains transparency by showcasing portfolio returns on its website.

    Is Wealth simple Safe and Legit?

    Wealthsimple offers a level of safety and legitimacy equivalent to traditional banks. Your invested funds are held with ShareOwner Investments Inc., a custodial broker regulated by IIROC and a member of CIPF. In case of insolvency or bankruptcy, your investments are protected up to CAD 1,000,000.

    Wealth simple employs 256-bit encryption and 2-factor authentication to enhance account and data security. It is backed by financial giants like Power Financial Corporation and Allianz.

    Other Wealthsimple Products:

    Wealthsimple extends its offerings beyond robo-advising:

    1. Wealthsimple Trade: A no-fee online brokerage for buying and selling stocks and ETFs.
    2. Wealthsimple Crypto: Allows trading in cryptocurrencies, including Bitcoin and Ethereum.
    3. Wealthsimple Cash: Offers peer-to-peer money transfers and high-interest savings.
    4. Wealthsimple Tax: Provides tax preparation software for Canadians.
    5. Wealthsimple For Work: A solution for businesses managing employee pensions.
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