Wealthsimple: Robo-adviser that’s great for Halal and impact investing

Some people know they should invest but don’t know where to start. Others just keep pushing it off for later. But when it comes to investing and the time value of money, it’s best to get started sooner rather than later. Robo-advisers are a type of financial adviser that funnels your investments into a pre-designed portfolio aligned with your investment goals.

Wealthsimple is a popular robo-adviser founded in 2014 in Toronto. It offers investment-management services in the US and Canada with innovative investment choices and some extra perks for accounts with at least $100,000.

But is it the right place for your money? Let’s take a look at how Wealthsimple works so you can decide for yourself.

Wealthsimple basics

For US investors, Wealthsimple offers its flagship investment product in individual, joint, IRA ( traditional, Roth, and SEP), or trust accounts. It takes about five minutes to sign up and get your account running.

During signup, you’ll answer some questions about your financial goals and risk tolerance. Based on your responses, Wealthsimple suggests a portfolio of diverse, low-fee ETFs.

Accounts are held for Wealthsimple by Apex Clearing Corporation and funds are SIPC-insured (that’s the Securities Investor Protection Corporation, which protects assets in brokerage accounts).

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Portfolios are designed using the Nobel Prize-winning modern portfolio theory. This emphasizes a diverse portfolio of stocks to earn market-level returns rather than picking single stocks to beat the markets.

Wealthsimple also offers a high-yield savings account for your cash that earns rates well above the market average. This account is also insured by the SIPC, not the FDIC.

Pricing and costs

Wealthsimple offers a fairly good value, but it is a bit pricier than many competing robo-advisers. The Basic account charges 0.5% per year on balances up to $100,000. If you have $100,000 or more, you qualify for a Black account with a lower 0.4% annual fee.

Black accounts include a financial planning session and Priority Pass Select lounge access. At $500,000, you qualify for a Generation account. Pricing is the same as Black, but you get better access to financial advising and customized investment strategies.

Wealthsimple is a good service, but beware the high fees

Wealthsimple’s product is solid, but its pricing does leave something to be desired. Competitor Betterment charges 0.25% for its basic account and 0.40% for the premium account with adviser access. Charles Schwab offers its Intelligent Portfolios robo-adviser with no advisory fees or commissions.

If you are drawn to the social or Halal portfolios, this could be a good fit for your investments. Further, if you really want that airport lounge pass, this brokerage can get you in the door. However, you can also get Priority Pass Select from a handful of credit cards, so I wouldn’t pick my money manager for that perk alone.

I am very fee-averse when it comes to investing. That makes me hesitate a bit with Wealthsimple when compared to similar investment advisers. But there is definitely a target client who would be very happy with the luxury-style experience Wealthsimple aims to offer. If that sounds like you, it could be a great choice.

Sign up for Wealthsimple today to open your Halal or impact portfolio »