One dilemma that Canadian investors face is which stockbroker to choose because there’re various platforms in the country. You can classify all the firms into two broad classes: discount brokers and full-service brokers.
If you decide to settle for the first category, you will still have several options at hand, but Questrade and Wealthsimple will get your attention.
The two Canadian online brokerages remain at the top of the food chain; however, this article will help you settle for one. So, which between Questrade and Wealthsimple is the better discount broker?
Questrade review 2021
Questrade is an online broker in Canada. It began its services in 1999, intending to give Canadians an opportunity to trade in local and US markets. The corporation is managing assets worth over $5 billion.
You must be a resident of Canada because the company does not offer services to non-residents. The discount broker will give you a platform to trade stocks, bonds, options, initial public offerings (IPO), exchange-traded funds (ETF), GICs, mutual funds, and precious metals.
Although they don’t charge an annual fee like traditional brokers, you will pay a small commission for your trades unless they’re ETFs. The plan you choose will determine the costs.
The trading platform offers two price plans: Questrade advantage and Questrade democratic. The first one is for active traders, while the second is the default plan.
Questrade pros and cons
Pros
- Low fees for stocks and ETFs
- 24/7 live chat. The discount broker is famous for excellent customer care.
- Excellent Web and APP platforms
- It is a reputable brand.
Cons
- It does not benefit non-Canadians
- Few base currencies
Wealthsimple review 2021
In 2014, Michael Katchen established a Canadian stock market App that would help millennials trade from the comfort of their homes. So far, the company is managing over $8 billion in assets.
In early May 2021, the Canadian fintech raised $750 million at a $4 billion valuation, thus boosting investor confidence.
You can trade ETFs and stocks on NYSE, NASDAQ, TSX, and the TSX-V through this discount broker. Wealthsimple uses high-tech Robo advisors and market experts to help clients navigate local and international markets.
Wealthsimple pros and cons
Pros
- You only need ten minutes to open an account. You answer a simple questionnaire, and they set you up with a portfolio that matches your investment goals and risk tolerance.
- They charge a small commission of 0.4%-0.5% to manage your profile, and there is no minimum deposit. For ETF MERs, you pay as low as 0.2%.
- They offer Halal investing for Muslims that complies with Sharia laws.
- The robo advisor monitors your portfolio and automatically.
- Dividend reinvesting
- The website and the APP are user-friendly.
- Access to socially responsible funds
Cons
- You have few investment options to choose from
- High MER for SRIs
- No physical address
Questrade vs. Wealthsimple: Which is the Better Discount Broker
Now, let us look at the similarities and differences of the two giant online Canadian stock brokers so you can choose the one that pleases you most. Kindly know that both have an excellent reputation locally and internationally.
- When you buy ETFs on Questrade, you’ll not pay any commission, but you will pay $4.95 per trade when selling them. However, Wealthsimple does not charge any commission on ETFs and stocks unless you’re buying equities in the U.S. market.
- Questrade gives you a buffet of accounts. RESPs, RRSP, TFSA, LIRA, LIF, foreign exchange, and margins, while Weathsimple only offers RRSP, non-registered accounts and TFSA
- Wealthsimple does not give their clients a platform to transfer RRSPs from other finance corporations or other accounts within the company. It also does not support RRSP withdrawal.
- Although Wealthsimple has no minimum amount to invest, Questrade has a minimum of $1000.
- Wealthsimple is more of a digital app, so it only supports iOS and Android. Questrade has iOS, Web, and Android platforms. Nevertheless, the user interface at Wealthsimple is better.
- You need at least $5000 to buy bonds and GICs on Questrade, but Wealthsimple does not offer the two products.
- If you want US ETFs and stocks, Questrade will not charge you provided you don’t change them into Canadian dollars.
- Wealthsimple doesn’t have products that favor retirees. That is, RIFs, LIFs and RESps.
- If you invest $100,000, your annual fee at Wealthsimple will be between $600-800, but in Questrade, you will pay $400-550.
Similarities between Wealthsimple and Questrade discount brokers
- Both brokerage firms offer socially responsible investment, but Wealthsimple added Halal portfolio to their SRI. Wealthsimple charges between 0.2 to 0.4 for SRIs while Questrade charges 0.2 to 0.35 for the same.
- Both let their customers buy ETFs at no commission.
- Both offer low-risk, conservative investment portfolios.
- The two do not charge to open an account.
- The two brokers give their clients good research material through their blogs and FAQ sections.
The Verdict
Questrade vs. Wealthsimple: Which is the Better Discount Broker?
- If it’s your first time trading equities, go for Wealthsimple. The platform is excellent for beginners. However, if you’re a pro trader, Questrade is the better option.
- If you like passive investing, go for Wealthsimple, but if you enjoy the adrenaline of trading with multiple options, Questrade is what you need.
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