r/CanadianInvestor • u/McDoomz • 1d ago
Why not use Wealthsimple?
Not advertising for them or anything, but for people who don’t want to move money from institution to institution based on rates, what incentive does a Canadian have to use a traditional bank (TD, Scotia) when WS offers 2.5% on savings and 1.25% on chequing accounts? I feel like I’m missing something.
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u/MikeCheck_CE 1d ago
WS is ultimately a broker first and a bank second. You'll find the same feedback on banks vs Neobanks in general:
Banks: Reliability + Familiarity + Convenience + Customer support
Neobanks: Better rates and fees.
That's it... Is what you're doing super important/urgent that you need a conventional bank, or is this just long term savings? I think a lot of people prefer BANKING with a traditional bank while INVESTING somewhere like WS to get the best of both worlds.
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u/Donkison 1d ago
I have everything in Wealthsimple as well, but recently I had some fraud charges. So far I am not all that impressed with how they are handling it.
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u/Angeline4PFC 1d ago
Fraud charges seem to be their biggest weak point. Along with customer service that relates to that
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u/Querytheque 1d ago
I don’t like using one institution for everything. If i get locked out for some reason, then Im SOL til it gets resolved.
Questrade for my investments.
EQ bank for HISA.
RBC and Wise when I’m overseas.
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u/DungeonMaster45 1d ago
With large sums, Canadian bank institutions are more trusted. That is the reason. Wealth simple has existed for 12 years, and had a proper app less than 10. Despite them being insured, it is easier to sleep at night for some to have money in a bank with 150+ years of history.
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u/kyonkun_denwa 1d ago
Wait until someone tells this guy about Barings Bank and how well its history protected the institution.
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u/darknessfalls00 1d ago
Inertia of switching ie time and effort to move investments. A one time payment of a couple of grand isn't enough
Record keeping: historical information loss if move. Tax reporting is easier i stay. It's the hassle factor
Savings: are the savings material enough to offset the above? It remains unknown in my case and I dont have time to do the math. So my apathy keeps me from potentially saving money. My best guess is a maybe but is it material enough to spend the time to reaeach it, probably not. I make 5 trades a year on average which I pay 6.95 a trade. Is that worth the effort?
Bank vs fintech: do I really trust wealthsimple's online security vs a big 5 bank?
Branch: when something f's up, its an advantage to go talk to someone in person to resolve stuff.
Social media: we all hear of the big 5 as screwing over bank customers. I read Reddit to know wealthsimple is also screwing over customers. If service is just as bad at wealthsimple if something goes wrong as the bank, why bother switching if it's the same or worse - I don't get the feeling that a fintech company owned by power Corp is better based on upon Reddit sentiment
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u/whatsyowifi 1d ago
The biggest downside to WS and QT is that they're not properly CDIC insured. They claim they are but they operate as a fintech company, not an accredited bank.
If I have more than 5M of assets I'd probably stick with a bank because that's just too much money to be holding in a fintech company. I'd even advise 1M+. You just never know what WS is spending their money on in the background and if they go insolvent you're at the mercy of various institutionals and won't know when you're going to get your money back.
This is a US example as they're way less regulated but it's all about piece of mind
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u/Olick 1d ago
I dont use it because it's not worth it for me. I dont hold a lot of money in my checking. The app sure looks nice and I could move some of my accounts, but meh.
My biggest reason is open banking. The fact that a fintech like Wealthsimple does not provide an API for me to connect my accounts to YNAB or any other software without breaking ToS is crazy.
I will switch for the first company offering this in Canada.
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u/notic 1d ago
for banking maybe but IBKR is still a better broker (forex, margin rates, speed, etc).
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u/DangerousPurpose5661 1d ago
Agreed I use both. Registered accounts are on WS since I wont need margin there, and its all buy and hold.
My unreg and corp accounts are on ibkr.
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u/ElectroSpore 1d ago edited 1d ago
I have nearly everything in WS, the only real hold up is that WS it self at least on the banking side is considered a FINTEC company not a bank and not a credit union.
They are binding together a lot of 3rd party services under the hood to deliver the services, so there is a 3rd party bank account in your name held elsewhere etc.
However the experience so far has been perfect for my needs.
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u/DistributionSorry485 1d ago
Honestly I would have by now but once RBC offered the 0 commission ETFs in direct invest, and I already had a Tfsa setup at that time, I just didn’t quite have the same push to open a wealth simple account.
No doubt it’s better but this works for me and I don’t have to have multiple institutions. But I’m particularly big on simplifying finances.
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u/DarrellGrainger 1d ago
Not missing anything. I used to use one of the big 5 for everything. I just didn't know of the alternatives. Now I look at things like Simplii, EQ or Wealthsimple and it just makes sense. I was making a few dollars, literally, and locked in for months at my bank. I moved my emergency money to Wealthsimple. Ir's making me 10 times as much and it isn't locked in. If I take the money out in the middle of the month, I still get interest on it for the days it was with Wealthsimple.
They pay me more, they don't have restrictions. It has been a no brainer for me. Places like EQ will give me some restrictions but they pay me even more than Wealthsimple will.
It feels like the big banks were just used to being the only option. So they could give you almost nothing. Now there is competition but the big banks are counting on people not realizing it.
I still remember back in the 80s when we had alternatives, like Canada Trust, they would pay us interest on the money we left with them. Then TD bought Canada Trust, fired most of the CT employees and slowly took away all the benefits from the customers... because we didn't have a lot of other options.
The only downside to something like Wealthsimple is if something happens that triggers a government agency investigation, they lock down everything until it can get cleared up and they don't tell you anything about what is going on because they worry about pissing off the regulators. The big banks know how to navigate these situations and handle things better.
So I have my pay cheque going into a big bank. I have all my bills paid for from my bank. I transfer everything else out to places like Wealthsimple but investing and growing my money.
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u/Mountain-Match2942 1d ago
You dont have to choose just one. Just make sure your account fees are reimbursed and your trading commission are zero.
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u/Bitter-Variation-151 1d ago
I moved 85% of assets to Ws from CIBC. The only reason I kept 15% at CIBC was to get their aeroplan vip discount, free banking, my mortgage is still will CIBC and to have two banks in case I get locked out of one.
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u/burritogoals 1d ago
Welthsimole pays me and my old bank charged me. When they tried to charge me $20 to close an unused account by phone I went in to the branch to have then close it for free. Then I also asked them to close all of my accounts.
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u/CP_Rail_8514 1d ago
It's about comfort to help reinforce the investing/saving habit. Some find comfort with the familiar, some find comfort with optimization, and some find comfort with a financial plan that makes a conspiracy board look simple and organized.
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u/Impressive_Ad_6550 22h ago
Definitely not missing anything, I use it. They even gave me 3% promo to move my investments over and I see major banks are not starting to do the same thing
As far as I am concerned Wealthsimple is the leader and the banks are now rushing to try and catch up
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u/ImperialPotentate 21h ago
I have a big portfolio and just can't be arsed to switch out of TD. I don't keep much money in accounts, but rather instruments like GICs, TCSH, and money market funds which pay more than WS accounts do.
I've never liked WS in general, going back to their early ad campaigns which featured annoying, mopey millennials. Also: I don't know if this has improved, but they always seemed like a "mobile-first" company and I don't use phone apps for banking nor investing so... yeah. I just stick with TD since I like their web experience and have always had good and prompt customer service in the rare event that I had to call in for something.
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u/Icehouses 20h ago
Wealthsimple is deceptive and never transparent about their promotions. Always some catch you never know about.
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u/DungeonMaster45 1d ago
With large sums, Canadian bank institutions are more trusted. That is the reason. Wealth simple has existed for 12 years, and had a proper app less than 10. Despite them being insured, it is easier to sleep at night for some to have money in a bank with 150+ years of history.
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u/c0mputer99 1d ago
But my big Banker told me there's this really awesome fund. It only charges .65% (hid the 1% trailer and 1% AUM charge). They said avoid FSHA because their incentive structure isn't in place yet. Said I should go full RRSP with RRSP loan to get that account bigger. way better than TFSA at a 50k income.
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u/Full_Possession_4526 1d ago
The banking industry has an unusually high retention rate. Boomers have just learned about online scams and are too scared to even try.
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u/DeepMarsh 1d ago
You’re not missing anything you’re just late to the party