The Showdown: Questrade & Questwealth vs Wealthsimple Invest & Wealthsimple Trade

Up until last year, 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 a 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.

After recently posting a Wealthsimple Review (which included Wealthsimple Trade) and Questwealth Portfolios Review, the #1 question we got was:

“So how does this new product compare to the old #1 option?  When it comes to Questrade vs Wealthsimple, is there a clear victor, or at least a ‘best fit’ for specific situations?”

Here’s our best stab at answering that question.

TABLE OF CONTENTS

Questrade vs Wealthsimple Summary

Discount Brokerages vs Robo Advisors

Questwealth Portfolios vs Wealthsimple Invest

Questrade Brokerage vs Wealthsimple Trade

Wealthsimple vs Questrade: What’s Right for YOU (the bottom line)

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 absolute lowest cost way to invest your money – and don’t need any special information because you’re just buying the same all-in-one ETF over and over again in an RRSP or TFSA, then Wealthsimple Trade is your best bet.

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

Signing up:

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.

  Robo Advisors Companies Discount Brokerages
Fees Charged as a percentage of your investment portfolio.  In the .35% to .8% range once the underlying investments (ETFs) are taken into consideration. Charged per transaction.  In the $5-$10 range per trade (a trade is buying or selling a share).  ETF transaction fees can be even less. Per month fees for access to elite trading platforms.
Style Hands off.  You decide on a strategy (with the help of an automated survey and an advisor) and then simply send your money.  Your investments will be re-balanced according to passive index investing principles. See our Wealthsimple Review for more information. Hands on.  You’re in the driver’s seat.  You want to buy individual stocks?  Great. You want to buy an all-in-one ETF that mimics the exact investment strategy of a robo advisor for half the price?  You can do that too.
Services General non-biased (no extra commissions) advice from knowledgeable people in regards to common questions such as: “Should I invest in a TFSA or RRSP this year?”   No one to ask for help.  You are effectively on your own.  
Some robo advisors offer much more detailed financial planning services at certain portfolio size tiers.
Tax loss harvesting to save money at tax time.
No need to worry about limit or no-limit orders, leftover cash, partial shares, or any other DIY stuff.  It’s all automated in a very advantageous way.
Some robos offer really cool perks that I haven’t seen from any discount brokerage once your portfolio hits a certain size.
User Friendliness 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. As complicated as you want to make it.  A lot of folks log into their accounts four times per year and re-buy the same ETFs or a relatively small group of dividend stocks in a rinse-and-repeat fashion.  Other people make dozens of trades per day. To use a discount brokerage you will need to remember to login to your online banking and send money from your daily account to your brokerage account.
RRSP + TFSA + RESP YES!   YES!

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

Investing Style

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.

Big Winner: Wealthsimple Invest

Fees 

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 your first $10,000 managed for free.

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

Features

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 

1) 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) It was just reported (first week of January 2020) that Wealthsimple will soon be introducing a new product called Wealthsimple Cash.  It is widely speculated that this feature will effectively allow Wealthsimple to provide a full suite of banking services to Canadians, 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.

Questwealth Portfolios does not offer many of these perks and services from everything that I’ve read.  Instead, they rely on their low fees to attract investors. But with over $6 Billion in assets under management, and more than 175,000 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.  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

Fees

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.

Winner: Wealthsimple Trade

Features

Here’s what you get with Wealthsimple Trade:

  • $0 TRADES without any restrictions or exceptions
  • Basic RRSP, TFSA, and non-registered accounts
  • No inactivity fees
  • Start your account with $0 
  • $0 Monthly or annual fees
  • Simple, user-friendly mobile app

You can quickly see that Wealthsimple Trade is building its case on a sheer value basis.  If you are a super simple investor that just wants to purchase the same all in one ETF over and over again, this is the cheapest way to do it.  Any cheaper, and Wealthsimple would be paying you invest with them!

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 has 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 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 that I personally use, then for now, the answer is still Questrade discount brokerage.  Read our full 2020 Questrade Review to find out why I still like my trusty old friend best when it comes to online brokerages in Canada.  

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, 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.

 
If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).

3 Comments

  1. Charles in Toronto on January 12, 2020 at 12:54 pm

    The fee comparison between Questrade and Wealthsimple Trade is unfair without also noting WT’s policy on US dollars. You cannot hold US dollars. All USD equities are traded in CAD with a 1.5% fee. That means if you want to trade any significant amount at all of any USD listed ETF, you will probably pay more in FX commissions to trade it than you’d ever spend in total commissions at Questrade. So that’s a no from me.

    • Kyle Prevost on January 13, 2020 at 1:04 pm

      Absolutely true – Good point Charles. If you’re going to hold US-listed ETFs, than Questrade wins hands down. I would think most Canadians will probably opt for the small withholding tax hit and go with a Canadian-listed ETF for their international exposure these days though eh?

  2. Grant on January 13, 2020 at 7:20 pm

    That Questrade uses actively managed portfolios is a deal breaker for me. The active vs passive debate was settled a long time ago. It doesn’t make any sense for them to do that.

Leave a Comment





This site uses Akismet to reduce spam. Learn how your comment data is processed.