A review of the recently released Wealthsimple Trade App
By using my referral link when signing up, you’ll receive $10 automatically applied to your account after successful completion of your first $100 deposit. Use the link:
https://my.wealthsimple.com/app/public/trade-referral-signup?code=UENGZA
Not many Canadians have heard of Robinhood, but for those that have, they’ve long awaited it’s expansion to our humble Canadian home. Now, I’m not referring to the folklore hero, but rather the platform allowing our neighbours to the south the ability to trades stocks and ETF’s commission free.
But it seems that Wealthsimple Trade has beaten them to the punch.
The long awaited Wealthsimple Trade App has finally been released upon the masses, knocking down a long standing financial obstacle for many Canadian’s. This app allows Canadian Investors with little capital, such as myself, the means of participating in the stock market.
Key Feature
The Wealthsimple Trade app allows you to trade Canadian Securities listed on the Toronto Stock Exchange for free. That’s right, you heard me, completely free! As of right now, they are the only brokerage in Canada that has done away with commission fees on trades. This enticing feature allows investors to exchange small quantities of securities, while avoiding any stipend penalties.
It’s also important to note that the Wealthsimple Trade app allows you to trade securities listed on the New York Stock Exchange and The Nasdaq Stock Market, commission free. However, you will be charged a Currency Exchange Fee of 1.5% for each transaction (Buy, Sell or Dividend Payment). Now many investors may be worried that this small deduction will eat into potential profits, but it is good to note that the average Canadian Brokerage Competitor charges a 2% Currency Exchange Fee on-top of their hefty commission.
Thus, Wealthsimple Trade is an obvious choice for Canadians looking to maximize profits while reducing commission fees associated with any other Canadian Brokerage.
Account Types
At launch, the Wealthsimple Trade App only allowed the exchanging of securities within a taxable Personal Account, but as of July 17, 2019 they have recently announced the opening of their new TFSA accounts. Thus allowing Canadians the means to trade securities tax free!
Two Key Points About Tax-Free Savings Accounts
It’s important to note that Day Trading within a TFSA is not advisable. If the CRA (Canadian Revenue Agency) suspects you of Day Trading within your TFSA account, they will flag it and your earnings will be taxed as business income.
It is also important to note that a TFSA is not a recognizable tax shelter in the United States of America. Therefore, if you hold any US Stocks or ETF’s within your Wealthsimple Trade TFSA, you will be charged a 15% foreign withholding tax for each dividend paid to you.
Drawbacks
There are a few hiccups you might face while navigating their current app, but that can be said about any new technology. These limitations may make it inconvenient to day trade, but these “growing pains” will be ironed out with time.
One disadvantage any avid trader may note is the 15 minute delay on price quotes, but this is easily solvable by using a realtime stock quoting app such as WeBull, alongside the Wealthsimple Trade App.
A second disadvantage that plagues the brokerage industry as a whole, is the delayed availability of your funds. When Depositing funds from your linked bank account to your Wealthsimple Trade account, it can take up to three business days before your funds become available to trade. A newbie investor might scoff at this remark, but it’s important to keep this limitation in mind while planning future trades; always have a static amount of available funds so you can instantly buy on stock dips.
A third disadvantage, that I’d rather refer to as an annoyance, is the fact that the Wealthsimple Trade app lacks a wealth of information for each stock; something avid day traders rely upon to make informed decisions. It’s minimalistic design and layout is tailored towards up-and-comers, who might be deterred by the complexity of a spread. This of notion of “keeping things simple and straightforward” is perfectly suited for those newbies in particular, but avid traders who require such depth and detail will have to rely on other sources and platforms in conjunction with the Wealthsimple Platform.
Support
Any concerns regarding your portfolio or general inquires about their platform as a whole, can be directed to their Support Email at trade@wealthsimple.com. Their support team is detailed in their response and not to mention timely. Specifically in my case, I was able to garner a responses within as little as two hours!
Overall, it is fair to say that the Wealthsimple Trade app is the long-awaited Robinhood Equivalent. It’s many drawbacks might scare away first adopters, but it’s Zero Commission Fee trade platform will ensure it’s place in our Financial Market.
You can follow my Wealthsimple invesmet journey on my Medium blog Young Canadian Investor and track my portfolio growth as I aspire for Financial Independence, but tend to suffer the latter.
