Best Platforms to Invest For Canadians in 2023
Investing your hard-earned money can be a nerve-wracking decision, and with so many options available in the market, it can be overwhelming to choose the right one. In this blog, we will be comparing two of the popular investment platforms in Canada, Wealthsimple and Questrade. We won’t discuss any of the big banks as they all charge criminally-high fees and should be avoided.
I currently use both Wealthsimple and Questrade and believe they’re the two best options for Canadian, here are my thoughts on the difference:
Wealthsimple is a robo-advisor that provides a simple and easy-to-use platform for Canadians to invest their money.
On the other hand, Questrade is a discount brokerage that offers a more hands-on approach to investing.
In this article, we will discuss the pros and cons of both Wealthsimple and Questrade to help you make an informed decision about which platform is best for your investment needs.
Pros of Wealthsimple:
Easy to use: Wealthsimple has a user-friendly interface that makes it easy for anyone, regardless of their investment experience, to start investing.
Diversified portfolios: Wealthsimple offers diversified portfolios that are managed by their team of investment professionals, which minimizes risk and maximizes returns.
Cheapest option in Canada for a managed portfolio (Wealthsimple Invest) which is 0.5%.
Low minimum investment: With a low minimum investment of $0, Wealthsimple is an accessible investment platform for anyone looking to start investing their money.
Automated portfolio rebalancing: Wealthsimple automatically rebalances your portfolio to ensure that your investments are aligned with your goals and risk tolerance.
Cons of Wealthsimple:
Market data is 15 minutes delayed. This can make a big difference for people trying to day trade (which highly unrecommended anyway).
Limited investment options: Wealthsimple only offers a limited number of investment options, which may not be suitable for more experienced investors.
Pros of Questrade:
Lower fees: Questrade charges lower fees compared to Wealthsimple, which can help you keep more of your investment returns.
More investment options: Questrade offers a wider range of investment options, including stocks, exchange-traded funds (ETFs), and options trading, making it a suitable platform for more experienced investors.
Hands-on approach: Questrade allows you to take a more hands-on approach to investing, giving you greater control over your investment portfolio.
Mobile trading: Questrade offers a mobile trading app, which makes it easy to manage your investments on-the-go.
Gives free elite subscription to Passiv.com which helps semi-automate your portfolio.
Cons of Questrade:
Steep learning curve: Questrade may have a steep learning curve for inexperienced investors, making it a less accessible platform for those new to investing.
Self-directed portfolios: With Questrade, you are responsible for managing your own portfolio, which can be a time-consuming and challenging task for those without the necessary investment knowledge. As well studies showing that managing your own portfolio does worse than the market average due to human nature (emotional decision making, chasing the hype, panic selling, not investing consistently, etc.)
That all being said here’s my thoughts on the two.
95% of people should go with Wealthsimple automated portfolios. Pick the portfolio type right for you, set up automatic contributions every time you get paid, and then you can forget about it. Maybe increase contributions over time (anytime income increases, or add one time additions if you get a bonus lump sum payment). The 5% of people who should go with Questrade are the real personal finance nerds. The ones who want full control of their investments. The ones who research which ETF they want, and want to log into Questrade every two weeks to place the trade to buy more themselves. However this is a riskier option as it introduces room for human error. If you hear some bad news about the market you might stop following your plan. Or you hear about the next hot stock and buy it instead of going with the index fund ETFs.
In conclusion, both Wealthsimple and Questrade have their pros and cons, and the right platform for you will depend on your investment goals, experience, and preferences. If you are new to investing and prefer a simple, hands-off approach, Wealthsimple may be the better choice for you. On the other hand, if you are an experienced investor who is looking for more control over your investments and a wider range of investment options, Questrade may be the better option. Regardless of which platform you choose, it's important to do your research, understand the fees and investment options, and make an informed decision that aligns with your investment goals.
