Questrade vs. Wealthsimple: Which online investing service is right for you?

If you’ve decided to try out online investing and have narrowed down your choices to Wealthsimple or Questrade—congratulations! Both are solid Canadian options that can help you grow your money and achieve your investment goals.

But choosing between the two can be tricky. While the two financial services providers have very similar options, they aren’t identical. The best choice will depend on your situation and preferences—particularly whether you want to pick your own self-directed investments or let a robo-advisor pick a portfolio of investments for you.

We’ve broken down the differences between Questrade and Wealthsimple to help you choose the best service for you.

Online brokerage comparison: Questrade* vs. Wealthsimple Trade*

Questrade and Wealthsimple offer investing products and services. While Questrade is the both the name of the company and the brokerage service, Wealthsimple Trade is the name of Wealthsimple’s online brokerage service. Furthermore, Wealthsimple Invest is the new name for its robo-advisor service, and Questwealth Portfolios is the name of Questrade’s robo-advisor service. Now that the names are clear, let’s dive in and compare the two companies and their services.

Questrade* started making its name as a low-cost provider of brokerage services in 1999, long before the term “fintech” entered the lexicon. Today, it offers almost every type of investment—including stocks, bonds, ETFs, mutual funds, GICs, options, initial public offerings (IPOs) and other equities, such as precious metals—with much lower trading fees than traditional brokerages, banks or other financial institutions. (Read our Questrade review for more information.)
Wealthsimple, on the other hand, entered the brokerage market only in 2019 with a mobile app service called Wealthsimple Trade, making a splash with its $0 commission purchases, sales and trades on ETFs and stocks listed on the NYSE, NASDAQ, TSX or TSX-V exchanges.

The tradeoff, however, was that these were the only investments available. A 1.5% currency conversion fee is applied to Canadian-to-U.S. dollar conversions (and vice-versa), which is important; because all Wealthsimple Trade holdings must be in Canadian dollars, fees can really add up for investors interested in U.S. assets. Furthermore, if an asset is listed on both a U.S. exchange and a Canadian exchange (i.e., it is a dual-listed security), only the Canadian-listed asset is available. (You can find additional details in our Wealthsimple review).

Wealthsimple Trade has since added an online platform, and expanded its offerings to include ETFs and stocks on additional exchanges (NEO, CSE, and limited securities on BATS); about 20 cryptocurrencies (bitcoin, ethereum, dogecoin and others), through Wealthsimple Crypto; and recently became the only Canadian trading platform to offer fractional shares of a limited number of U.S. and Canadian companies (Shopify, Google, Amazon, Tesla and more). This lets clients invest in those companies with any amount—even as little as $1—rather than needing to buy a certain number of shares at a given price. But Wealthsimple Trade still doesn’t offer international equities or other investment assets one would expect from a brokerage.

In terms of account types, Wealthsimple Trade offers personal (non-registered) accounts, TFSAs and RRSPs—that’s it. (Cryptocurrency can be held in non-registered accounts only.) In comparison, Questrade’s clients can hold investments in many different tax-sheltered registered accounts (RRSP, TFSA, RESP, LIRA, RIF, LIF) and taxable non-registered accounts (margin and foreign exchange market accounts).

Another big difference between the two services is access to market data and research tools. Questrade offers free real-time market data, while Wealthsimple Trade has up to a 15-minute delay on quotes which means the price you’re quoted on an investment may not be what you pay/get when you execute your trade. Questrade’s new TipRanks tool also allows investors to see U.S. and Canadian stock ratings, recommendations, and the measured performance of anyone who provides financial analysis and guidance, which can help them make informed investment decisions.

Questrade also has a couple of time-saving features, such as a dividend reinvestment plan (DRIP) that automatically reinvests the dividend payments you receive; and it offers a free annual membership to the Passiv app, which lets you automate deposits and stock/ETF purchases.

Both Questrade and Wealthsimple Trade have “instant deposit” features that allow investors to make trades immediately after depositing funds, up to certain limits. Questrade offers instant deposits of up to $3,5000. (Our in-depth review of Wealthsimple Trade here.)

Here’s a detailed breakdown of how the two brokerage services compare:

Bottom line: Should DIY investors choose Questrade* or Wealthsimple Trade*?

For some, the draw of commission-free purchases and trades may be reason enough to choose Wealthsimple Trade, particularly those who want to trade small amounts frequently—and especially with the introduction of fractional share purchases. Questrade, however, will be the better option for many other self-directed investors, including those who:

• Want to trade U.S. stocks and ETFs. Wealthsimple Trade’s 1.5% currency conversion fee makes investing in U.S. stocks and ETFs very costly. While, technically, Questrade also charges a currency conversion fee, it doesn’t apply so long as you keep those investments in U.S.-dollar assets indefinitely. Wealthsimple Trade, on the other hand, requires all assets to be held in Canadian dollars, which means you incur the currency conversion fee with every applicable trade. (For a deeper dive into the breakdown of fees for both platforms and a comparison of the two apps, check out this “Making sense of the markets” column.)
• Are retired or have young children/grandchildren. These investors may want to open retirement income funds (RIFs/LIFs) or registered education savings plans (RESPs), which are not yet offered through Wealthsimple Trade.
• Want a wider choice of investments. As previously mentioned, Wealthsimple Trade’s stock and ETF offerings are limited, and it doesn’t offer bonds, international equities, precious metals or other assets that Questrade does. Questrade’s robust investment and account offerings make it the broker of choice for investors who want a full slate of options available to them.
• Prefer to set up automated services. The DRIP plan and free membership to the Passiv app allow investors to take a more hands-off approach by having their dividends automatically reinvested, and setting up automatic deposits and transactions.

Compare the Best Online Brokerages in Canada>

Robo-advisor comparison: Wealthsimple vs. Questwealth Portfolios

Wealthsimple launched its a robo-advisor service, now called Wealthsimple Invest in 2014, the same year that Questrade added its own offering of “pre-fab” portfolios for investors, called Questwealth Portfolios. The two robo-advisor services work in much the same way.

Clients spend a few minutes answering questions online about their age, investment goals and comfort level with risk. Based on the answers provided, an algorithm recommends a diversified portfolio of low-fee ETFs.

The difference between each portfolio is the ratio between higher-risk investments, such as Canadian, U.S. and international equity ETFs, and lower-risk fixed-income ETFs, such as bonds and GICs. An aggressive portfolio would be weighted toward riskier investments (which also offer the possibility of greater returns), while a conservative one will include more low-risk investments. To help you maintain that preferred asset allocation, both services periodically rebalance the portfolios for you.

Both services also offer socially responsible investment (SRI) versions of each portfolio, which support companies that prioritize environmental and social concerns, and have a positive record on human rights and corruption. In addition, Wealthsimple offers Halal portfolios, for those who adhere to Islamic law. (Read our article on Halal investing in Canada.)

Both offer the gamut of account types for their robo-advisor services.

So far, it’s same-same, right? There are, however, a few major differences between Wealthsimple and Questwealth Portfolios:

• Questwealth Portfolios is not a true robo-advisor. Unlike Wealthsimple, which relies 100% on algorithms and automation to monitor and rebalance your portfolio when necessary, Questwealth has actual human experts who manage your portfolio for you, without the high fees that most portfolio managers charge for this service. This can be considered a good or a bad thing, depending on your point of view. While some may appreciate the human touch, research shows that actively managed portfolios do not fare as well as those that are automated. (Having said that, the past performance of Questwealth Portfolios has been at least as good or better than benchmark targets or other robo-advisors.)
• Savings tools are another point of difference. Wealthsimple has a couple of quality free services that can be helpful for those who struggle to save. The first is called Roundup, and it lets you link a credit or debit card to your Wealthsimple account so that any spare change from your regular purchases are automatically invested for you each week. The second is Overflow, where you decide in advance how much cash to keep in your bank account; any excess funds will automatically be transferred into your Wealthsimple account once a month.
• Finally, let’s look at fees. To understand how much each service costs, you must look at both the overall management fee, which is a percentage of the total amount of money you have invested, as well as management expense ratios (MERs), which are charged on each individual ETF.

Here’s how the fees break down, along with a few other similarities/differences:

Bottom line: which robo-advisor is right for you?

Both robo-advisors are good options for Canadians who want a hands-off, low-fee investing option that minimizes risks and maximizes returns.

If you have at least $1,000 to invest, and you don’t mind that the process is not entirely automated, Questwealth Portfolios wins out as the more cost-effective robo-advisor of the two.

For those who want to get started with their investments right away and don’t have $1,000 on hand, or who feel more secure with the full automation of a true robo-advisor service, Wealthsimple Invest has you covered. Same goes for investors who want a Halal portfolio provided by a robo-advisor, or who want some additional free savings tools.

Compare the Best Robo-Advisors in Canada >

Comparison of other services: Wealthsimple Cash, Wealthsimple Tax, QuestMortgage

Wealthsimple Cash

Wealthsimple Cash launched in January 2020, offering clients the convenience of an unlimited-transaction, no-fee chequing account, combined with the benefits of a high-interest savings account.

However, with today’s rock-bottom interest rates, the account pays only 0.5% annual interest, which is better than the banks, but still not much of an incentive. Perhaps more attractive is the no-fee aspect: There’s no minimum deposit required, no monthly account fee, and you can send and receive money for free without the need for any security questions. Wealthsimple Cash is also the first Canadian product Twitter has integrated with its Tip Jar, a feature that lets users of the social media app send money to each other. (Check out our article on how to make money on social media, even if you’re not a “creator.”)

Other features that are planned for Wealthsimple Cash have not yet come to market due to the pandemic. These include:

• Bill payments
• Digital card
• Direct deposits
• Pre-authorized debit
• Apple/Google Pay
• No FX fees on purchases
• Cash card
• ATM cash withdrawals

Deposits in a Wealthsimple Cash account are protected by the Canadian Insurance Deposit Corporation (CDIC).

Questrade does not currently have a comparable service.

Wealthsimple Tax

In early 2021, Wealthsimple launched a free tax prep and filing service called Wealthsimple Tax after acquiring software maker Simple Tax. You don’t need to be an existing Wealthsimple client to use the service, which can handle most returns without issue.

If you wish, you can pay $30 to “upgrade” your return, which entitles you to priority email responses from Wealthsimple’s support team and additional support if the CRA elects to audit your return. (For more information, see our full Wealthsimple Tax review.)

Questrade does not currently have a comparable service.

QuestMortgage

Questrade now offers existing clients mortgage services provided by Community Trust Company. Launched in March 2021, QuestMortgage boasts low rates (1.99% five-year fixed and 1.35% variable, as of August 2021) and generous prepayment privileges (lump sum payments of up to 20% of the original balance annually; and doubling up on mortgage payments at any time).

The application process for a new or refinanced mortgage is done entirely online, with a team of mortgage advisors available to help.

Wealthsimple does not currently have a comparable service.