Lately, many readers who are at the beginning of their investment journey have asked me about my choice of discount broker. To be more specific: Questrade vs. Wealthsimple Trade, which one is the better choice? Mrs. T and I use both discount brokers and think both are fantastic for DIY investing. But do we prefer one over the other? Given that we use both Questrade and Wealthsimple Trade, I figure I’d write a real user review to compare the two. Here’s my honest and a real user review of Questrade vs. Wealthsimple Trade.
In case you’re wondering, we use Questrade for our RRSPs, TFSAs, RESPs, and taxable accounts. We opened accounts with Questrade back in 2011 when we had our financial epiphany. Back then, Questrade was the leader in online discount brokers.
I was very curious about Wealthsimple Trade when launched in March 2019, but never considered opening an account with them. About half a year ago, our kids wanted to invest their birthday money and other various gift money, so we opened a Wealthsimple Trade account. Since the kids aren’t eligible to open a taxable account, the account is under Mrs. T’s name.
Unlike other Questrade vs. Wealthsimple Trade reviews, my aim for this article is to provide some real life usage analysis and determine which discount broker is the best for DIY investing.
Questrade has been one of the leading discount brokers in Canada since 1999. Headquartered in Toronto, Questrade allows Canadians to manage their own investment portfolio by providing low-cost trading and commission free ETF purchasing. In over two decades, Questrade has grown to manage over $9 billion in assets.
For trading, Questrade offers two different options: self-directed investing and active traders. The commission cost structure is different for each option. For this review, I am going to examine Questrade’s self-directed investing only.
Founded in 2014, Wealthsimple started off as an online wealth management service, or robo-advisor. The company also operates in the US, and UK.
Wealthsimple Trade was introduced in March 2019 when the company decided to expand beyond the robo-advisor service, allowing Canadians to buy and sell stocks and ETFs on major Canadian and US exchanges without having to pay any commissions.
Needless to say, the $0 commission stock trading was a game changer and Wealthsimple Trade quickly became one of the leading trading platforms in Canada.
Just recently, Wealthsimple Trade introduced fractional shares, making them the only Canadian trading platform to offer fractional shares of US and Canadian companies. Although not every single stock is available for fractional share, this is another game changer for Canadian DIY investors.
With services like Wealthsimple Cash, Wealthsimple Crypto, and the purchases of the likes of ShareOwner and SimpleTax, Wealthsimple has been expanding its services. One interesting fact about Wealthsimple is that Power Corporation of Canada owns 70.1% of Wealthsimple. So if you’re an investor that believes in Wealthsimple products and want to invest in the parent company, take a look at POW.TO.
Questrade vs. Wealthsimple Trade – Features
Let’s look at some key features that I like about each discount broker and some features that I do not like.
Key Features I like about Questrade
After using Questrade for almost ten years, there are a lot of features I like about Questrade:
- You can open many different account types with Questrade, including RRSPs, TFSAs, taxable (i.e. margin), RESPs, LIRAs, RIFs, LIFs, corporate accounts, investment club accounts, informal trusts, etc.
- Questrade offers different trading platforms – Questrade Trading, Questrade app, Questrade IQ Edge, and Questrade Global. I usually use Questrade Trading and have only used the Questrade app a few times. I haven’t used Questrade IQ Edge and Questrade Global. I do like the simple, intuitive designs that Questrade Trading and Questrade app offer to allow me to easily buy and sell stocks and ETFs.
- With Questrade, you can buy and sell stocks, ETFs, options, and international equities. You can also participate in IPOs. (Note, I have not traded options, international equities, or IPOs). So if you’re looking for a one stop discount online broker, Questrade can do that.
- I really like that you can purchase ETFs for free. This allows me to buy a few shares of ETFs whenever we have some cash lying around.
- The biggest advantage Questrade has is that you can hold both USD and CAD inside registered accounts like TFSAs and RRSPs. This means you can trade in USD and leave dividends and proceeds in USD rather than converting everything back to CAD and paying the conversion fee each time. You can also perform Norbert’s Gambit to effectively convert CAD to USD and leave the USD cash in your account for future transactions.
- Questrade Trading and Questrade app show one click real time market data. If you need Questrade’s streaming real-time data, you can pay $19.95 to $89.95 per month for access. For most investors, the free one click real time data that Questrade provides is more than sufficient.
- As of October 1, 2020, Questrade removed the quarterly inactivity fee. There’s no longer inactivity fees to any Questrade account type.
- No annual RRSP or TFSA account fees. The brokers through Canadian banks typically charge a quarterly account maintenance fee.
- Funding a Questrade account is super easy. To fund a Questrade account, we simply “make a payment” to the account via our bank’s online banking system.
- Funds show up pretty quickly. It usually takes one business day for funds to show up in our Questrade accounts.
- You can enroll in a dividend reinvestment plan (DRIP) by filling out the DRIP form with Questrade. One thing to note is that Questrade only supports synthetic DRIP, so dividends must be enough to purchase full shares. Another thing to note is that Questrade does not honour DRIP discounts. DRIP shares are purchased at the market price on the day of the DRIP.
- Questrade will reimburse transfer fees up to $150 per account.
What I don’t like about Questrade
As much as I like Questrade, there are a few things I don’t particularly like:
- Trading cost used to be $4.95 flat but now it’s minimum $4.95 to max $9.95.
- Need to pay exchange fees like ECNs (Electronic Communication Networks) and ATSs (Alternative Trading Systems). The ECNs apply to US listed securities while ATSs apply to Canadian securities. There are ways to avoid paying these exchange fees (by not removing liquidity) but they’re just plain annoying!
- While there’s no minimum to open an account, you need a minimum of $1,000 in your account to start trading.
- Although you can hold money in USD and CAD, Questrade charges 1.5% to 2.0% in currency conversion fees if you buy US listed stocks with your CAD. This can be quite costly.
Key Features I like about Wealthsimple Trade
After using Wealthsimple Trade for our kids’ investment account, there are a few features I really like about Wealthsimple Trade:
- $0 commission trading. This means you can buy and sell stocks and ETFs for free. This is the biggest advantage to Wealthsimple Trade.
- Fractional shares. You’re able to trade fractional shares for the likes of SHOP, RY, TD, and CNR in Canada and AMZN, GOOGL, APPL, MSFT, FB, NFLX, TSLA, ABNB, COIN, NVDA in the US.
- Everything is done via the mobile app. Opening an account is super simple and straightforward. You just download the Wealthsimple Trade app on your phone and get started that way.
- Unlike Questrade, there’s no account minimum. You can start trading with $1.
- You can open RRSPs, TFSAs, and taxable accounts with Wealthsimple Trade.
- The Wealthsimple Trade app is very very well designed and very minimalistic. You can do everything from funding, opening another account, and checking transaction history from the app.
- When you look up a stock or ETF, the app gives you a brief summary of what the company or ETF is about.
- Wealthsimple Trade will reimburse fees on transfers of more than $5,000.
What I don’t like about Wealthsimple Trade
Wealthsimple Trade is quite good but there are several things that can improve to make Wealthsimple Trade the “perfect” online discount broker in Canada:
- Only limited to stocks and ETFs that are traded on Canadian and US stock exchanges. You cannot trade options and preferred shares, for example. For the most part, this limitation is fine for most DIY investors.
- The book value isn’t shown (i.e. adjusted cost basis). Instead, only total price is shown. This shouldn’t be an issue for most people since you should be using a spreadsheet to track your portfolio.
- Stock and ETF quotes have a 15 minute delay (i.e. not real time). This can be problematic if you’re trying to place market orders.
- You have to pay $3 per month to get premium features on Wealthsimple Trade that gives you real-time, on-demand quotes, and deposit up to $1,000 in seconds with no holds.
- When you place a market order, Wealthsimple Trade app gives you a warning about applying a 5% ceiling to market buy orders (i.e. Wealthsimple provides a 5% collateral to protect you against sudden last-minute price changes)
- Wealthsimple Trade currently does not support DRIP. This is a bummer if you want to reinvest dividends received. In other words, it may require more manual work for dividend growth investors (i.e. you need to manually buy shares each time you get dividends). However, given Wealthsimple acquired ShareOwner in 2015, I am optimistic that DRIP will be available on Wealthsimple Trade soon. (It’d be a big win for Wealthsimple Trade if fractional share DRIP can be supported).
- Unlike Questrade, you can only hold money in CAD. You can still buy and sell US assets using CAD. Wealthsimple Trade will do the exchange rate conversion for you plus the 1.5% currency conversion fee whenever you buy and sell US stocks or ETFs. But the 1.5% currency conversion fees can quickly add up. In other words, you can’t utilize Norbert’s Gambit with Wealthsimple Trade to convert CAD to USD cheaply.
- Deposits less than $250 will show up immediately. But deposits greater than $250 will take 3 business days to process. Also you can’t automate recurring deposits. Funding must be done manually.
- You can only open taxable, TFSA, and RRSP accounts with Wealthsimple Trade. However, for most DIY investors, this shouldn’t be an issue.
Features I’d really like to see at Questrade and Wealthsimple Trade
As you can see, there are pros and cons for Questrade and Wealthsimple Trade. If these two discount brokers can somehow merge together and provide the best of the both features, that’d be a major win for Canadian DIY investors. Some features that I would absolutely love to see:
- Truly $0 commission at Questrade – This is a total dream though, since Questrade needs to make money somehow.
- No account minimum to start trading at Questrade – This would allow investors with a small investment portfolio to get started.
- Support DRIP at Wealthsimple Trade – For us to seriously consider moving from Questrade to Wealthsimple Trade, DRIP needs to be supported.
- A Wealthsimple desktop app for all account management – Although I’m a millennial, I prefer doing things on a desktop rather than on my phone.
- The ability to hold USD and CAD in the same account for Wealthsimple Trade – Given that the 1.5% conversion fee is one of the ways Wealthsimple makes money, this may never happen.
- One business day fund deposit – taking three business days to process funds over $250 for Wealthsimple Trade is a bit ridiculous. Come on people, last time I checked, we’re in the 21st century.
Questrade vs. Wealthsimple Trade – Summary Comparison
Here is a quick head-to-head comparison between Questrade and Wealthsimple Trade.
|Fees||$4.95 to $9.99.ETF purchases are free.ECNs/ATSs are applicable.||$0 to buy and sell stocks and ETFs.|
|Accounts Available||TFSA, RRSP, taxable accounts, RESP, LIRA, RIF, LIF, corporate accounts, trusts, etc.||TFSA, RRSP, taxable accounts|
|Minimum investment to trade||$1,000||$1|
|Transfer fees reimbursement||Up to $150||For transfers over $5,000|
|Hold USD & CAD cash||Available in registered accounts||Not available|
|Norbert’s Gambit||Supported||Not supported|
|Trading platform||Web, iOS, and Android||iOS and AndroidLimited functions for web|
|Stock exchanges supported||TSX, TSXV, NYSE, NASDAQ, MX, PINK, BATS, CNSX, etc||TSX, TSXV, NYSE, NASDAQ|
|Market data||Real time||15 minute delay|
|DRIP||Available, synthetic DRIP (no DRIP discounts).||Not available|
|Fractional Shares||Not supported||Supported|
|Currency Conversion fee||1.5%-2%||1.5%|
|Promotions||Get up to a $250 cash bonus, depending on the amount deposited.||Get a $10 credit bonus when depositing at least $100.|
|Funding time||Typical 1 business day||Instant for =<$250. 3 business days for >$250|
Questrade vs. Wealthsimple Trade – Fees Winner
When we only use trading fees as the only parameter to evaluate these two online discount brokers, it is easy to declare Wealthsimple Trade as the winner. Wealthsimple Trade is the best discount online broker for selling and buying US and Canadian listed stocks and ETFs. You simply can’t beat $0 commission trading for stocks and ETFs.
There’s no doubt that Wealthsimple Trade take the win here. The ability to buy fractional shares offers Canadian DIY investors opportunity to own a fraction of some stocks that are trading a very high prices. Since the purchased of ShareOwner and phasing out ShareOwner, I am extremely pleased that Wealthsimple Trade is finally introducing fractional share purchases. While the list of stocks available for fractional shares is limited, it is definitely a good start.
Questrade vs. Wealthsimple Trade – Features Winner
Although Questrade and Wealthsimple Trade both offer outstanding and unique features, if I evaluate the overall features, one stands out over the other. Trading fees aside, Questrade offers far more features that provide benefits to DIY investors.
If you make sure that the commission fee is less than 1% of the overall commission cost whenever you make a trade, I think Questrade is the better broker for Canadian DIY investors.
Who should use Questrade
Questrade is well suited for most DIY investors. If you are looking for more features like real-time data, opening accounts like LIRA and corporate accounts, the ability to trade stocks not listed on TSX, TSXV, NYSE, and NASDAQ, enroll in dividend reinvestment plans, and the ability to hold USD and CAD in registered accounts, Questrade is the choice for you.
Having used Questrade since 2011, I am pretty happy with Questrade. Whenever I need help from Questrade, I can contact them via email or online chat. Depending on the number of users, the online chat can take some time before you reach a representative.
You can open an account with Questrade using my referral code and get up to $250 bonus cash.
Who should use Wealthsimple Trade
Wealthsimple Trade is perfect for investors looking for a no frill discount online broker that offers zero dollar commission trades. This is especially true if you only invest in RRSPs, TFSAs, and/or taxable accounts.
I think Wealthsimple Trade is perfect for investors who are starting out and want to invest their contributions of a few hundred dollars every other week. In other words, if you are only buying a few shares of a stock each time, Wealthsimple Trade is perfect because you don’t have to pay any trading commissions. Furthermore, Wealthsimple Trade also allows you to purchase fractional shares on certain stocks, allowing Canadian DIY investors to slowly build up their portfolio over time.
Also, if you’re comfortable trading on your smartphone and don’t need features like real-time data and enroll in DRIP, then I’d highly recommend Wealthsimple Trade.
Wealthsimple Trade has a very comprehensive Help Centre if you have questions. If you need to talk to a person, you have to either email them or phone them. I haven’t needed to contact Wealthsimple Trade representatives, so I am not sure how responsive they are.
You can open an account with Wealthsimple Trade using Mrs. T’s referral code and get a $10 credit bonus.
Questrade vs. Wealthsimple Trade – Which broker is best?
Questrade and Wealthsimple Trade are both very solid online discount brokers. You can’t really go wrong with either of them. But which broker is the best if I had to pick?
Well, overall I think Questrade is the best discount broker to use. Questrade offers a lot of features that can be valuable for novice and experienced investors. I really appreciate the ability to enroll in DRIP, hold both USD and CAD cash in my accounts, to be able to trade on the desktop, and the quick one business day funding. Questrade removed the inactivity fees so you aren’t forced to make trades regularly.
- You may also want to consider National Bank Direct Brokerage if you’re looking for commission free trading.
Yes, I have to pay trading commissions and the exchange fees, but Questrade’s trading commissions are still far cheaper than how much Canadian banks charge when trading with their direct investing accounts.
Questrade has also partnered up with Passiv to allow you to put your portfolio on autopilot for free. With the help of Passiv, you can build your own personalized index, invest, and rebalance all through a click of a button. Passiv can even calculate and execute the trades needed to keep your portfolio balanced. Essentially, Passiv makes investing super simple! A community user account is free to sign up. The elite member account is $99 per year, but it’s free for Questrade clients! Make sure to check out Passiv.
While Questrade is overall the best discount broker to use, Canadian investors shouldn’t ignore Wealthsimple Trade. If you are just starting out with a small investment portfolio comprising RRSP and/or TFSA, and want to invest with small and frequent contributions, Wealthsimple Trade is the online broker for you. The truly zero cost commission trading is a key benefit when you are starting out and want to put your regular contributions to work.
You can only make trades on the Wealthsimple Trade mobile app, but soon, it may be possible to trade on the desktop. If Wealthsimple Trade can add two features – setting up recurring deposits and enroll in dividend reinvestment plans, it would make the platform even better.
Once you’ve got an online broker set up, it’s time to spend some time reading about investments. You may find the following articles helpful: