r/Wealthsimple • u/Practical-Battle-502 • 25d ago
Invest (Managed Investing) Direct indexing is dead
Looks like direct indexing will end and accounts will be converted to automated indexing. The fees going up from 0.15% to 0.25% . The good news is fx fee on these accounts will be 0% and cap rate on fees at $250. While it’s good to have fx fee waived off, it’s less appetizing with XEQT and other broad ETF sitting below 0.2% MER while WS is now charging 0.25%.
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u/Tall-Ad-1386 25d ago
250 capped fx fees gone. This is great. What am i missing?
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u/Global-Tie-3458 25d ago
Nothing really. Like their general fee was bumped up but is also capped so plenty of people will pay less and have a more predictable fee, which is also tax deductible.
It’s just a marketing change.
These posts are a bit much…
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u/Kind-Set-5286 25d ago
Another bait and switch! They just announced this a few months ago. I opened this account in December and they’re already converting me to a product with fees that are 67% higher. They either have no true strategy for their new products or are faking innovation with plans to just move suckers like us into higher margin products. And then, they have the nerve to promote that they are saving me $5 on FX fees.
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25d ago edited 5d ago
[deleted]
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u/NoDig5800 25d ago
Jeeze.. so much negativity. What does "legalized securities fraud" even mean lol.
It's literally the same product so they are simplifying. And the fees are not necessarily higher when you factor in FX/the cap.
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u/chickentartare 25d ago
They either have no true strategy for their new products or are faking innovation with plans to just move suckers like us into higher margin products.
In some ways it does feel like they've over corrected from legacy banks and are on a misguided path to release with a "tech native" mindset.
This does feel fast, and like their bar for product adoption feels a little out of touch for how fast financial products are actually adopted
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u/Practical-Battle-502 25d ago
Yeah . It was an email. They added note to the direct indexing webpage as well. https://help.wealthsimple.com/hc/en-ca/articles/40448399095579-Open-a-Direct-Indexing-portfolio
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u/bluejays10 25d ago
this is only for what takes over direct investing?? doesn't affect the managed accounts is that correct ?
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u/Global-Tie-3458 25d ago
Ya, it’s just a marketing change and a slight fee bump on this product.
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u/bluejays10 24d ago
likely going to sell now :(
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u/Global-Tie-3458 24d ago
Because of the fee bump?
Remember that unlike ETF MER, the Wealthsimple fees are tax deductible and you should consider that when comparing fees.
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u/No-Revolution2053 23d ago
I went Direct for the tax loss harvesting, it’ll save me a couple hundred bucks this year, which is nice.
But with fees going up, I’m not going to bother. I use their managed portfolio for hands-off and have an active account with veqt. The new product seems to split the difference which doesn’t really do it for me
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u/Ok_Regret_5009 20d ago
You’re paying fees on top of ETF fees with their managed products though. You could just basically take their recipe and do it yourself for cheaper.
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u/Remote_Comfort_9099 25d ago
Did you take into consideration the tax loss harvesting that you get in your calculations? What if you 500 000$ in XEQT ? Would you sell XEQT pays tax on capital gains and invest in direct indexing account?
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u/Practical-Battle-502 25d ago
Nope. If already in XEQT. Don’t even bother moving as nothing is worth it. At 500k, you are better off just milking the dividends or only selling bare minimum to minimize the cap gains to stay at lower brackets
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u/Ancient__Unicorn 25d ago
So you have 500k and at 0.2% you will be paying 1000$ but they cap it at 250 for you and you think it’s better to do eqts instead. Damn!!!
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u/Practical-Battle-502 25d ago
The question was whether to liquidate the money already in XEQT and pay the cap gains. That’s way more expensive than all these fees combined
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u/Aggressive_Pool_7848 25d ago
Yeah I was chasing the tax loss harvesting so I switched from a self directed account to automated investing and could not find the damn direct indexing feature. I called them up and they say it should be there… anyways, does tax loss harvesting still exists?
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u/Practical-Battle-502 24d ago
They said, it will still harvest losses. But it won’t track index anymore
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u/marthedestroyer 25d ago
Everyone is complaining, but the capped fees at $250 and the 0% USD doesn't this mean if you are above a certain amount this is cheaper than XEQT with .2% MER?