Up until two years ago, investors looking to cut their investment fees to a minimum could choose to go with Questrade if they wanted an online discount brokerage and Wealthsimple if they wanted the ultimate in cheap, hands-off automated investing via Canada’s best robo advisor.
Recently though, we’ve seen Questwealth Portfolios emerge as Questrade’s pseudo robo-advisor, and we’ve seen Wealthsimple Trade become the ultimate way to pursue a FREE DIY investing strategy via online discount brokerage.
Here’s our best stab at answering that question.
Questrade Vs Wealthsimple Compared
No one to ask for help. You are effectively on your own.
As complicated as you want to make it. One-off index buy or a daily rebalance/trading - up to you.
The easiest way to turn a part of your paycheque into an excellent investment portfolio. Simply setup an automatic contribution to your robo account, and then focus on your leisure time.
RRSP + TFSA + RESP
For additional comparison options, I recommend checking out our Qtrade vs Wealthsimple article.
Questrade vs Wealthsimple Summary
Please read on to see the details of our Questwealth Portfolios vs Wealthsimple Invest comparison in our Battle of the Robo Advisors and/or the details of our Wealthsimple Trade vs Questrade Brokerage comparison in our Duel of the Discount Brokerages.
If you’re the TL;DR type, then here’s our conclusion.
1) Go with Wealthsimple’s Robo Advisors if you like the idea of a super easy way to invest, and the ability to email/online chat/call someone for help on your investment journey. This is the way I recommend 90% of my friends invest their money. Questwealth Portfolios is a worthy competitor, but ultimately I’m scared of the “Active Management” investing style, and their perks/platform just doesn’t provide the nice cherry on top that Wealthsimple does.
2) If you want the cheapest way to invest your money in Canada using DIY techniques, then you’re looking for a discount brokerage account. See our full guide to Canada’s online brokers for more information on how Wealthsimple Trade, Questrade, and Qtrade all compare.
3) If you like to do a little research on the stocks you want to buy and/or need the maximum amount of investor options, BUT still want to pay very low fees, then Questrade keeps its title as our most recommended overall discount brokerage.
Many brokerages upped their game substantially in 2020 and the shift to online investing has only accelerated in 2021. While Wealthsimple has proven to be incredibly innovative in areas such as Wealthsimple Tax or Wealthsimple Crypto, they have simply fallen short when it comes to their Wealthsimple Trade platform.
The extensive platforms and much wider array of options that Qtrade and Questrade provide just make them a much better choice if you chose to go the DIY-broker route. Hopefully Wealthsimple will sprinkle some of their magic innovation dust on their trading platform sooner rather than later.
Signing up with Wealthsimple or Questrade:
- Wealthsimple Robo Advisor ($50 promotion on a $500+ deposit)
- Wealthsimple Trade
- Questrade ($50 free promo)
- Qtrade (Best Canadian Broker)
Discount Brokerages vs Robo Advisors
Before we begin comparing apples-to-apples when it comes to new offerings from Wealthsimple and Questrade, we should probably take a look at the difference between the two major ways to invest online. It’s important to note that this comparison is a generalized look at the two different types of investing.
If you’re looking for the easiest way to get started with an instantly diversified RRSP or TFSA, and realize the benefits of index investing, then a robo advisor is your best bet. The extra help, tax loss harvesting services, and perks, are potentially valuable benefits depending on your investing comfort level.
If you want to cut costs to the absolute bone, and are willing to do some of your own reading on topics like TFSA contribution room or RRSP rules, and the math on how many shares you can buy with your limit order, then a discount brokerage account is probably the way to go. It’s also by far the best option for investors looking to actively trade exotic investment products like commodities or options, and who need advanced data on which to base their trades.
Questwealth Portfolios vs Wealthsimple Invest – Battle of Robo Advisors
The way that Questwealth Portfolios invests your money vs how Wealthsimple Invest puts your money to work, is the single biggest difference between these two automated investing services.
- Questwealth Portfolios = Active Investing
- Wealthsimple Invest = Passive Investing
What this active vs passive argument boils down to is that when a company actively invests your money, it means that they are trying to pick and choose which investments will create the highest investment returns. A passive investing strategy is when an investor or company simply seeks to own a small piece of every company or bond in a given market. In the case of a Wealthsimple portfolio, this means owning small pieces of thousands of companies from all around the world, as well as hundreds of bonds.
The investments in your Questwealth Portfolio are actively managed by a company named One Capital Management, based in Los Angeles, California.
Getting “experts” to pick the best investments to put in a portfolio might sound good in theory. The problem is that most of the time “experts” are really bad at actually selecting the best investments for their clients. There are many reasons for this fact, but what it comes down to is that it’s really, really hard to get an edge on everyone else in the stock or bond market. This shouldn’t be a surprise considering who is involved in trying to outdo each other in these markets.
Remember that for every share or bond you sell, there is someone on the other end who thinks they got the better deal.
These companies compete against each other every day using brilliant brains from Ivy League schools, supercomputers that should probably be used at NASA, insider information gleaned from their paid “consultants” who are former politicians or staffers, etc. As soon as one of these money managers or companies gain an edge, it is often quickly copied by the others. Consequently, to be “above average” at picking the best investments is quite difficult, and the people who can do it usually run relatively small hedge funds for the world’s wealthy – not investments aimed at the average retail investor.
Study after study has shown that passive investment’s strategy of “owning the entire market” and guaranteeing yourself the average overall return is far and away a better strategy than hiring someone to “beat the market” for you!
If you want more insights on why passive investing has fared much better than active investing, please read these articles (or just trust that I read them).
1) Here’s why Warren Buffett (one of the world’s best stock pickers) says that you should passively invest your money.
2) Here’s an example of Buffett actually winning a $1 Million bet that an index fund would beat an elite hedge fund.
3) Here’s another example of how active management has lost for the last 9+ years.
Both Questwealth Portfolios and Wealthsimple Invest also include Socially Responsible Investing (SRI) options, but only Wealthismple has Halal Investing options for Islamic investors.
Additionally, in 2020 Wealthsimple launched their own socially responsible investing funds rather than relying on third party responsible investing ETFs which they have been doing since 2016.
Wealthsimple noticed that investors were showing an increased interest in having their investments match their values and, on June 16th, 2020, two new Wealthsimple funds hit the Toronto Stock Exchange.
The first is Wealthsimple North America Socially Responsible Index ETF which invests primarily in Canadian and US equity services (management fee is 0.2%). The second is Wealthsimple Developed Markets ex-North American Social Responsible Index ETF and focuses on European, Asian, and Australian equity services (management fee is 0.25%)
As mentioned earlier, Questrade also has SRI with similar fees (0.25% for under $99,999 and 0.2% above $100,000), however, the fact that Wealthsimple is taking the steps to become more invested in socially responsible investing will give them a step up in the eyes of many Canadian investors.
Big Winner: Wealthsimple Invest
If you want to see what a robo advisor is all about, or are just getting started with investing, then Wealthsimple has a fantastic promotional offer which includes getting a $50 bonus on a $500 or more deposit.
Questwealth Portfolio has no such introductory offer at this time. However, there is no denying the long-term edge that Questwealth Portfolios have when it comes to a pure comparison of MER. For smaller portfolios (less than $100,000) Questwealth Portfolios charge .25% MER + the cost of the underlying ETFs. Wealthsimple Invest charges .50% MER + the cost of underlying ETFs. For larger portfolios, the costs come down to .20% MER vs .40% MER respectively.
That said, I remain very skeptical that this relatively small difference in fees (.2% MER comes out to about $16 per month on a $100,000 portfolio) is enough to justify the shortcomings of active management.
Winner: Smaller Portfolios = Wealthsimple, Larger Portfolios = Questwealth
As Canada’s largest robo advisor (by far) and with the bankroll of Canadian financial giant Power Financial funding innovation, this is where Wealthsimple really shines versus many of its competitors.
Both automated investing options include all the normal Canadian accounts (TFSA, RRSP, Non-registered, Corporate, etc), both will pay your transfer fees to switch over, include tax loss harvesting services, and some degree of personalized help via chat, email, or phone. Both Wealthsimple Invest and Questwealth Portfolios offer investors a super quick way to diversify their investment portfolio through automatic dividend reinvestment.
On top of those features, here’s a few other highlights unique to Wealthsimple
At its two higher tiers (Wealthsimple Black and Wealthsimple Generation) Wealthsimple Invest treats investors to VIP airport lounge access, personalized financial planning, personalized financial reports, and 50% off Medcan health plan.
2) All investors can make use of a partnership between Wealthsimple and SimpleTax that allows clients to quickly and easily file their own tax returns for FREE each year. Fully integrated with your Wealthsimple accounts, this will save Canadians substantial time and money.
3) A neat little feature called “round up” that allows you to hook up your credit card and debit card to your account, and then automatically invest “your change” whenever you make a purchase.
4) Access to Wealthsimple Save, which is an excellent High Interest Savings Account option. Canadians could open up an EQ Bank Account outside of their Questwealth Portfolios account and get access to the same features, but it’s nice to have all of your banking/investing needs met in one place.
5) In January of 2021 Wealthsimple introduced a new product called Wealthsimple Cash. This feature could allow Wealthsimple to provide a full suite of banking services to Canadians in the future, including a basic chequing account. The business names “Wealthsimple Payments, and “Wealthsimple Digital Assets” were also reserved by Wealthsimple, leading to speculation about eventual products that the innovative company will soon be coming out with.
6) The other ground-breaking area that Wealthsimple has staked out within the Canadian market is Wealthsimple Crypto. Personally I’m not a big fan of cryptocurrencies, but I’m quickly becoming a minority on that front I guess! As of right now, Wealthsimple Crypto only allows trading in Bitcoin and Ethereum, but they have already stated that more options are on the way. It makes sense that Canada’s leading Fintech company would be on the cutting edge of allowing people trade in their Canadian Dollars for BTC.
Questwealth Portfolios does not offer any of these perks and services from everything that I’ve read. Instead, they rely on their low fees to attract investors. But with over $8 Billion in assets under management, and more than 1.5 Million customers (not to mention Power Financial’s deep pockets) I’m betting that Wealthsimple will continue to innovate and add to their overall suite of products that make investing and money easier for Canadians.
It also has to be noted that Wealthsimple’s mobile app and online platform are brilliantly designed and have won several international awards (including a Webby Award in 2021). I know that when it comes to managing money, having a pretty-looking app isn’t the most important factor, but there is no denying the refined ease-of-use that Wealthsimple has created as it has expanded across multiple international markets in addition to its Canadian home base.
Clear Winner: Wealthsimple
Conclusion: Wealthsimple is Canada’s Top Robo Advisor
Despite giving up a couple of MER points in fees, the combination of unsurpassed features, superior passive investing strategy, and award-winning user experience, leave Wealthsimple standing alone atop the mountain in the Questrade Portfolios vs Wealthsimple Invest robo advisor battle.
Questrade Brokerage vs Wealthsimple Trade – Duel of the Discount Brokerages
In some ways, the Questrade discount brokerage product vs the Wealthsimple Trade online brokerage platform are the mirror image of the robo advisor battle. Here we see that it is Wealthsimple that has cut fees to the absolute bone. It’s literally FREE to invest with Wealthsimple Trade.
However – you are getting the absolute minimum product with that $0 cost structure. Wealthsimple Trade is not currently connected to the other Wealthsimple platforms and can only be used from their mobile app. Wealthsimple has stated that they are quickly working to connect this product with the rest of their suite, and working to quickly build out other features. All of that said, the Questrade discount brokerage platform still dominates in the features department.
It can’t be overstated how cool and potentially revolutionary $0 trades are in Canada. For any share or ETF, you pay $0 to either buy or sell the equity. If you’re wondering if this is too good to be true, remember how pared down this platform is AND keep in mind that Wealthsimple may simply be using this as a loss leader in order to bring you into their overall ecosystem, which now includes tax preparation, robo advisor services, high interest savings accounts, and chequing accounts. With Charles Schwab introducing $0 trading costs in the USA, I have little doubt that Wealthsimple has again done it’s homework on this product and is again, ahead of the curve.
Questrade on the other hand continues to solidly clip along with their extremely low per-trade fee of $5.00 plus ECN fees. For more on what this means, check out our Questrade Review. It is also worth mentioning that Questrade offers free purchases of most ETFs. However, the $5 + ECN fees are still in play when it comes to selling those ETFs.
The bottom line is that Questrade has long been the fee leader when it comes to discount brokerage investing in Canada. Their fees are still very low, but there is no denying the math that FREE beats “low fee” any day. That said, the MDJ editorial team has been really disappointed in the lack of innovation that Wealthsimple has produced when it comes to their brokerage accounts relative to other areas of their business.
Here’s what you get with Wealthsimple Trade:
- $0 TRADES without any restrictions or exceptions
- Basic RRSP, TFSA, and non-registered accounts
- $0 Monthly or annual fees
- Simple mobile app
You can quickly see that Wealthsimple Trade is building its case on a sheer value basis.
Here’s what the Questrade Discount Brokerage brings to the table:
- Stock trades and ETF sales for $5.00 + ECN fees (which are usually minimal)
- Excellent initial promo offer – Click here to get $50 in Free Trades
- ETF purchases for $0
- Almost any type of account you can imagine (RRSP, TFSA, RESP, Non-Registered – which they call a margin account, LIRA, RIF, LIF, Joint Accounts, and Corporate Accounts)
- $1,000 Account Minimum
- **check on monthly/yearly fees
- Ability to hold USD
- Access to elite data platforms for active traders, watchlists, news, and various types of investor information services
- Access to stock exchanges other than the Toronto Stock Exchange (TSX) and New York Stock Exchange (NYSE)
Questrade and Qtrade have been the gold standard for Canadian online discount brokerage options for a long time now – and it’s clear to see why. Their newly-improved desktop platform and mobile app are excellent, their fees are very low, and they provide unparalleled features at this price point.
Plus, we can’t forget about the outstanding promotional offer shown below.
Winner: Questrade Discount Brokerage
Wealthsimple vs Questrade: What’s Right for YOU
Ultimately there are too many variables to determine a clear winner when it comes to the Questrade vs Wealthsimple battle for your investment dollar.
Before you decide on Questrade vs Wealthsimple (or any of Canada’s other discount brokerages & robo advisors) you should first decide on whether the DIY discount brokerage model or the more hands-off model is more your style. After making that decision, THEN you can compare apples-to-apples when it comes to Questrade Discount Brokerage vs Wealthsimple Trade, or Questrade Portfolios vs Wealthsimple Invest robo advisor.
If you’re asking which of the four platforms that I recommend most often to my friends and family, the answer is unquestionably Wealthsimple Invest robo advisor. You can sign up today and get $10,000 managed for free, and it’s hands down the easiest way to turn a chunk of your paycheque into an incredibly diversified portfolio automatically each month. That’s the #1 consideration for most people. The fees are much lower than traditional investing methods in Canada, the platform is beautifully designed & easy to use, and the investing strategy is ideal from all of the reading that I’ve done.
If you’re asking which of the four platforms I personally use, then my answer has actually evolved from 2020 to 2021. Heading into 2020 I felt that the Questrade online broker overall package was the best option in Canada. However, after countless MDJ readers contacted us (and commented on our articles), we were forced to admit that the serious deficit in customer service affected the overall effectiveness of the platform.
When we combined all of those data points with the steady innovation and commitment to excellence over at Qtrade, we had to admit that the Heavyweight Title of discount brokerages had changed hands. Read our full Qtrade vs Questrade comparison for more details on how they stack up..
It’s definitely worth keeping track of Wealthsimple Trade though! You would have lost a lot of money betting against the innovative folks over at Wealthsimple the last few years. I have every reason to believe that the Wealthsimple Trade platform will continue to get more diverse, and be able to connect with the rest of the Wealthsimple Universe in the near future. (We’ll obviously keep this article updated to reflect any future developments.) If they can even approach the functionality of Questrade or Qtrade, the combination of $0 fees and the new low-fee all in one ETFs is potentially game-changing..
If you’re interested in listening to more information from Canada’s leading experts when it comes to deciding between investing with a discount brokerage account and a robo advisor account, or more details on what Wealthsimple vs Questrade looks like, check out our exclusive interviews below.
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