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

Photo by Christin Hume from Unsplash

Maybe you are looking to try online investing or switch online brokers or robo-advisors. Either way you’ve landed here because you narrowed down your choices to Wealthsimple or Questrade. Both are good options for Canadians that could help you grow your investments.

While the two fintech platforms have comparable products and services—for example, the two do offer self-directed and managed investment services—they aren’t identical. The platform that’s right for you will depend on your situation and preferences, including whether you prefer to manage your own investments or would rather let a robo-advisor build your portfolio and manage your investments for you.

So, let’s get into the differences between Questrade and Wealthsimple so you can decide on the best investing platform for you.

Questrade and Wealthsimple are Canadian investment platforms, and both offer useful investing products and services. But the branding for both can be confusing.
Questrade is both the name of the company and the brokerage service, yet its robo-advisor is called Questwealth Portfolios.
Wealthsimple used to have a separate app for DIY investing called Wealthsimple Trade) and its managed investment robo-advisor was called Wealthsimple Invest. Now, though, all its investment products—stocks, ETFs, crypto, options, and the robo-advisor—are available on one comprehensive app, aptly and simply called Wealthsimple.

Now that we are clear on the names, let’s dive in and compare the two companies and their services.

What is Questrade? How does it work for Canadian investors?

Questrade* first gained popularity as a low-cost provider of brokerage services in 1999, long before the term “fintech” became the thing to do. Today, it offers almost every type of investment—including stocks, bonds, exchange-traded funds (ETFs), mutual funds, guaranteed investment certificates (GICs), options, initial public offerings (IPOs) and precious metals—with affordable trading fees, compared to that of traditional brokerages, banks or other financial institutions. (Read our full  Questrade review for even more information on the platform.)
Wealthsimple, on the other hand, entered the brokerage market more recently, in 2019 with its mobile app Wealthsimple Trade. It made a splash with its zero-commission trades on ETFs and stocks listed on the NYSE, NASDAQ, TSX or TSX-V exchanges.

For Wealthsimple users, the trade-off of no fees, however, was the comparatively limited investment products. Instead of trading commissions, Wealthsimple made its money through a 1.5% currency conversion fee applied to Canadian-to-U.S. dollar conversions (and vice-versa). This is important, because ordinarily Wealthsimple Trade holdings—including U.S. stocks—are in Canadian dollars. So, the currency conversion fees can quickly add up for investors interested in U.S. stocks and ETFs. And on top of that, if an asset is a dual-listed security, meaning it’s listed on a U.S. exchange and a Canadian exchange, only the Canadian-listed asset is available. (Read even more in our Wealthsimple review).

Although, initially only available as a smartphone app, Wealthsimple’s trading services are now available for browser as well. And it has expanded its investment offerings to include ETFs and stocks on additional exchanges CBOE Canada, CSE, and limited securities on BATS). It also offers close to 60 cryptocurrencies (bitcoin, ethereum, dogecoin and others); and was the first Canadian platform to offer trading in fractional shares of a limited number of U.S. and Canadian companies (Shopify, Google, Amazon, Tesla). But Wealthsimple still doesn’t offer international (non-U.S.) equities or other investment assets that one can find on Questrade.

As for account types, Wealthsimple offers personal (non-registered) accounts, TFSAs and RRSPs—and that’s it. Cryptocurrency can be held in non-registered accounts only—however, crypto ETFs can be held in registered accounts. Know, though, that Questrade’s offers many different registered accounts, including RRSPs, TFSAs, registered education savings plans (RESPs), locked-in retirement account (LIRA), retirement income fund (RIF), life income fund (LIF) and first home savings account (FHSA). Questrade was the first financial instiution to offer FHSAs, actually. It also offers taxable non-registered accounts (margin and foreign exchange market accounts). However, Questrade does not yet offer crypto trading.

Another big difference between Questrade and Wealthsimple? Access to market data and research tools. Questrade offers free real-time market data, while Wealthsimple has up to a 15-minute delay on quotes. This means the price for an investment you see displayed on your screen may not be what you actually pay/get when you execute your trade. Questrade also offers a suite of free and paid data packages for mutual funds, IPOs, intraday trading and fixed income products.

But a big similarity is that Questrade and Wealthsimple also adividend reinvestment plans (DRIPs), which automatically reinvests your dividend payments. Additionally Questrade offers free Elite Membership to the Passiv app, which lets you automate deposits and purchases of stocks and ETFs.

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 $10,000. (Our in-depth review of Wealthsimple Trade here.)

How do Questrade and Wealthsimple compare?

Here’s a detailed breakdown of how the two online brokerages compare:

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

For cost-conscious investors in Canada, the draw of commission-free trades may be reason enough to signing up for Wealthsimple. Add to that a user-friendly and intuitive platform, the ability to trade cryptocurrencies and a cutting edge cash/savings account (with spending card) that seamlessly integrates with your investing accounts, then Wealthsimple can seem like the obvious choice. However, Questrade may be the better option for self-directed investors who:

• Want to trade U.S. stocks and ETFs. Wealthsimple’s 1.5% currency conversion fee makes investing in U.S. stocks and ETFs costly. While, technically, Questrade also charges a currency conversion fee, it doesn’t apply as long as you keep those investments in U.S.-dollar assets indefinitely. Wealthsimple, on the other hand, requires all assets to be held in Canadian dollars (unless you pay $10 per month for a U.S. dollar account), which means you incur the currency conversion fee with every applicable trade. (Read this, for a deeper dive on Questrade’s fees when it launched its app.)
• Are retired or have young children/grandchildren. These investors may want to open retirement income funds (RIFs/LIFs) or RESPs, which are not yet offered through Wealthsimple.
• Want a wider choice of investments. As mentioned above, Wealthsimple stock and ETF offerings are limited, and it doesn’t offer other assets that Questrade does, such as mutual funds, bonds, GICs, international equities or precious metals. 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. Questrade’s free Passiv membership allows investors to take a relatively hands-off approach to their DIY investments—effectively allowing them to mimic a robo-advisor service for their investments.
• Want real time granular data. If you’re an active trade or an intermediate to advanced investor who loves sifting through data and investment research, Questrade’s data and analysis tools could make the platform even more attractive to you.

Compare the best online brokerages in Canada>

Robo-advisor comparison: Wealthsimple vs. Questwealth Portfolios

Wealthsimple launched its a robo-advisor, which is its managed investing service in 2014 (it then called Wealthsimple Invest). That was the same year Questrade added its own offering of “pre-fab” portfolios for investors, called Questwealth Portfolios. Clients for either spend a few minutes online, submitting answers to questions about their age, investment goals and risk appetite. Based on the answers, the algorithm recommends the portfolio of diversified low-fee ETFs it deems to be the most suitable.
One major difference between the two robo-advisor offerings is that, while Wealthsimple offers three core portfolio options (growth, balanced and conservative), Questrade offers five—aggressive, growth, balanced, income and conservative. Both services also offer socially responsible investment (SRI) versions of each portfolio. These portfolios are meant for assets in 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 wish to adhere to Islamic law with their investments. (Read our article on Halal investing in Canada.)

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 strategic asset allocation, both services periodically rebalance the portfolios for you.

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:

• 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 may be considered a good or a bad thing, depending on your point of view. While some may appreciate the human touch, others may prefer purely passive investing, where investment decisions are automated based on an algorithm without any human intervention.
• Savings tools are another point of difference. Wealthsimple has a couple of quality services that are free and can be helpful for those struggling to save. The first lets you automatically invest the 1% rewards from your Wealthsimple Mastercard. And, if you deposit your paycheque into your Wealthsimple cash account, you can set up automated investments from there.
• Finally, let’s look at their 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 determined and charged on each individual ETF by the ETF provider—not by the robo-advisor.

• Comparison chart of Wealthsimple and Questwealth Portfolios fees

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

Should you use Wealthsimple or Questrade?

The two robo-advisors are good options for Canadians who want to outsource active decision making for their investment portfolio.
If you have at least $1,000 to invest you may want to consider Questwealth Portfolios because gives you more portfolio and account type options of the two.
But for those who don’t have $1,000 on hand, Wealthsimple is a good, simple, easy-to-use option . And, while both offer SRI versions of their portfolios, for those who want a Halal options, it would have to be Wealthsimple.

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, a rewards Mastercard combined with the benefits of a high-interest savings account.

The unique proposition of this service is the ability to automatically investment the 1% cash back you receive on spending with the Mastercard—in stocks, ETFs or crypto. Also attractive is the no-fee aspect of the cash account: 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. You can even receive your paycheque in and pay your bills from your cash account and 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 for up to $300,000 by the Canadian Insurance Deposit Corporation (CDIC)—this is three times the typical deposit insurance coverage. Wealthsimple is able to offer this to its customers because they hold the cash in trust with up to three difference banks—each of which provides you up to $100,000.

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

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.
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 (4.89% to 5.85% as of mid-June 2023) 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.

About Aditya Nain

Aditya Nain is an author, speaker and educator who writes about Canadian investments, personal finance and crypto. He has co-authored two books and taught at universities for 12 years.