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Wealthsimple review
Wealthsimple offers "investing on autopilot" for those looking to open an investment account with a robo-advisor.
If you’re fairly new to investing but want to dip your toe in, then Wealthsimple’s ready-made portfolios may suit you – they invest your money on your behalf, letting you keep track in-app without really lifting a finger. Wealthsimple aims to cut the jargon and make investing straightforward. We’ve reviewed the features and fees, and set out its pros and cons.
What is Wealthsimple?
Wealthsimple is a Canadian online investment management firm that was founded in 2014. One of the so-called “robo-advisors”, Wealthsimple is geared towards millennials or inexperienced investors, and offers risk-based portfolios, low fees and socially responsible investing options.
It invests your money in a range of exchange-traded funds (ETFs), using both technology and human investment advisers and offers three types of portfolio, each with a different level of risk.
How does Wealthsimple work?
You can sign up for a Wealthsimple account online in a couple of minutes. Once you’re signed up, it asks you a few questions about your financial goals and how you feel about risk, which helps it match you to one of its profiles.
After this, you can begin making deposits. There is no minimum investment deposit, but the amount you invest will determine what account tier you are eligible for – more on this later.
Your portfolio will be automatically rebalanced over time, and your dividends can also be reinvested to increase your potential returns. You can manage and track your portfolio online or by using the slick Wealthsimple app.
What can you invest in with Wealthsimple?
Wealthsimple has pre-made portfolios that you can choose between, based on how you feel about risk. These portfolios are made up of the same range of investments, all with different weightings to suit different types of investments.
Here’s the portfolios available:
Wealthsimple tiers
There are three tiers of Wealthsimple based on the amount you deposit into your account. Each type of account has different fees and benefits. With a Wealthsimple basic account, you get access to investment advice, automatic rebalancing of your portfolio and dividend reinvestment.
In addition to the benefits of a basic account, a Wealthsimple Black account also offers investment planning and VIP airport lounge access. The Wealthsimple Generation account offers all the features of a Black and Basic account, along with a dedicated investment adviser, customised budgeting and cash flow planning, as well as ongoing portfolio monitoring.
| Basic | Black | Generation | |
|---|---|---|---|
| Investment amount | 0 – £100k | £100k + | £500k + |
| Fee | 0.7% + avg. 0.18% fund fee | 0.5% + avg. 0.18% fund fee | 0.5% + avg. 0.18% fund fee |
| Automatic rebalancing | |||
| Direct debit contribution | |||
| Dividend reinvestment | |||
| Financial Advice | |||
| Investment Planning | |||
| Dedicated adviser | |||
| Ongoing portfolio monitoring | |||
| Portfolio and pension reviews |
What products does Wealthsimple offer?
Wealthsimple has 4 accounts. The one you choose will depend on whether you have an ISA already, who you’re saving for and when you want to withdraw.
To put it simply: if you’re investing for a child, check out the JISA; if it’s for you and you haven’t used your ISA allowance this year, check out the ISA; if you’re saving for retirement, check out the pension; and if you’re saving for yourself and you have used your allowance, check out the general investment account.
The products that Wealthsimple offers are:
- General investment account
- Individual savings account (ISA)
- Junior ISA
- Pension
Personal account
If you’re looking to open a regular investment account, you can use a Wealthsimple personal portfolio to begin investing. There is no upper limit on how much you can invest, but any gains will likely be subject to capital gains or income tax, depending on your current tax status.
Capital gains tax is payable on profits over £6,000 in each tax year. If you don’t want to pay tax on your profits and haven’t used your annual ISA allowance yet then you can invest in an ISA.
Wealthsimple ISA
The Wealthsimple ISA lets you invest up to your annual allowance in each tax year without having to pay tax on your profits.
The allowance for the 2023/2024 tax year is £20,000. This means that you can invest up to £20,000 in your ISA each year without paying tax on what you make.
You can only pay into one of each type of ISA in each tax year, and you can invest in the same types of investments as with the other accounts.
Wealthsimple JISA
A junior ISA, or JISA, is an ISA for under 18s. It can be set up by a parent or legal guardian, or the child themselves if they’re at least 16 years old. The annual JISA allowance for 2023/2024 is £9,000 per year. This means that you can save up to £9,000 in each tax year without the profits being taxable.
Once the child turns 18 they’ll be able to access the money and do whatever they want with it.
Wealthsimple pension
Wealthsimple offers a self-invested personal pension (SIPP), which is then managed by the Wealthsimple investment team. It’s a separate account to your workplace pension and your state pension.
You can start a new pension account with Wealthsimple, or, if you have existing pensions from previous jobs or other SIPPs, you can transfer your existing pension to your Wealthsimple account.
How much does Wealthsimple cost?
Like many robo-advisors, Wealthsimple charges an adviser fee on its accounts. This is either 0.5% or 0.7%, depending on the size of your investment (it goes from 0.7% to 0.5% once you invest more than £100,000. You’ll also pay a small fund fee, which averages around 0.18%.
Is Wealthsimple safe?
Wealthsimple is authorised by the Financial Conduct Authority (FCA) and also covered by the Financial Services Compensation Scheme, meaning your investments are protected up to £85,000 if the company folds. Your account and data are also protected by encryption and two-factor authentication.
Like any investment, your capital is at risk when you use Wealthsimple, and you may end up with less than you initially invested. Your investments will be based on your risk profile, but there’s no guarantee of returns on any portfolio.
Wealthsimple customer reviews
Wealthsimple’s customer reviews on the reviews platform Trustpilot are mixed, and it gets 3.5 out of 5 stars. (Last updated April 2021.)
Finder surveyed Wealthsimple customers in December 2020. Its users said that it’s really easy to use.
Pros and cons of Wealthsimple
Pros
- Easy-to-use app
- No account minimums
- SRI and halal-compliant investing options
- Risk-based portfolios
- Junior ISA option
Cons
- Only invests in ETFs
- Relatively high advisory fee
- Need to invest £100,000+ to get lower rate
- Limited portfolio options compared to competitors
Our verdict: Is Wealthsimple any good?
Wealthsimple is a really simple app that lets you invest in ready-made portfolios, suitable for beginner investors who want to dip their toe in and understand a bit on how investing works. If you want to create your own portfolio and choose your own investments then this may not be the provider for you.
You have to invest quite a lot of money to get the lower adviser fee, which is quite a lot for beginner investors. It’s also nice to have options for younger investors and ethical investing.
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All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
Frequently asked questions
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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