ReportWire

Tag: Online brokers

  • Wealthsimple reveals that it’s now profitable, after 10 years in operation – MoneySense

    Wealthsimple reveals that it’s now profitable, after 10 years in operation – MoneySense

    [ad_1]

    It also ditched U.S. expansion efforts after selling its U.S. book of business to Betterment in 2021, and sold its Wealthsimple for Advisors to Purpose Advisor Solutions as it focused in on Canadian consumers. 

    The company’s valuation is also down from its peak. Power Corp., which across several divisions together held a 55.1% undiluted equity interest as of June 30, said the fair value of its holding was $1.5 billion. That’s down from $2.1 billion in 2021. 

    But the company has still managed a steep climb in assets from growth across the board, whether it’s wealth management, trading and brokerage or its banking business, said Katchen. 

    It comes as Wealthsimple increasingly positions itself as a full-suite alternative to the big banks, including boosting its banking services last year, that has helped lead to a $20 billion boost to the bank’s net deposits. 

    “We’ve been pretty excited about a more complete product offering,” said Katchen.

    Product expansion to include mortgages, credit and insurance

    Wealthsimple, which also offers tax services after buying Simpletax in 2019, launched a mortgage offering earlier this year and plans more credit products ahead along with an expansion into insurance, he said.

    It’s all part of the company’s effort to rival the big banks, by having more than a trillion dollars in assets under administration. 

    While Katchen had originally said he’d want to reach that goal within the first 15 years, he’s now aiming for a slightly less ambitious timeline of within 20 years of co-founding Wealthsimple. 

    [ad_2]

    The Canadian Press

    Source link

  • Fractional trading puts pricey stocks within reach of new and younger investors – MoneySense

    Fractional trading puts pricey stocks within reach of new and younger investors – MoneySense

    [ad_1]

    The basic investing rules still apply—so do your own research

    Marques warned trading, whether whole or fractional, isn’t for everyone—especially those who can’t make time to research a company before buying. 

    “Although it makes (trading) easier to do so fractionally with a smaller budget, that takes a lot of research,” Marques said. 

    “In many cases for your average Canadians who may not have the time or the interest or the expertise in researching companies or taking this kind of a gamble on just one company, it’s still more appropriate to work with managed portfolios,” she suggested.

    The basics of investing still apply to fractional investing, Boisvert said, such as keeping in mind your time horizon and risk tolerance. 

    For instance, if you have a goal to put a down payment on a home in the next year, the investor shouldn’t be putting that money into equities that can be volatile in the short-term, she explained.

    Instead, rely on tried-and-true investment concepts like diversification, which is also easier to achieve with fractional units, she said. Fractional shares also make it more accessible to purchase stocks at various price points, especially when the purchases are spread across months. 

    It’s important to not put all of your eggs in one basket, and have no more than 5% of a portfolio in any one holding, Boisvert added.

    “When we’re talking about buying units of shares, keep in mind to avoid FOMO (fear of missing out),” Boisvert warned. 

    [ad_2]

    The Canadian Press

    Source link

  • What happens when you can’t manage your investments anymore? – MoneySense

    What happens when you can’t manage your investments anymore? – MoneySense

    [ad_1]

    I try to picture 84-year-old me being told by my kids that it is time to hire a financial planner. I may not be so keen myself when the time comes. Maybe I should bookmark this column.

    I took over the management of my mother’s finances toward the end of her life. She seemed reluctant, but she knew it was time. I think she still saw me as her little boy even though thousands of clients and readers looked to me for advice that she was hesitant to take.

    Managing your own investments to save on fees

    If you expect to pay $35,000 a year on fees to invest in mutual funds, Laasya, I am speculating here, but you probably have somewhere between $1.5 million and $2 million of investments. Mutual fund management expense ratios (MERs) are embedded fees that are paid from the fund’s returns each year. They are about 2% on average but can range from under 0.5% for low-cost, passive index funds to 3% or more for segregated funds from insurance companies.

    If you have $1 million or more to invest, there are discretionary portfolio managers who use stocks and bonds or proprietary pooled funds who may charge 1% or less of your portfolio value. (Discretionary means the portfolio manager makes buy and sell decisions on your behalf.)

    You could certainly invest in exchange-traded funds (ETFs), and now there are plenty of simple asset-allocation ETFs (also known as all-in-one ETFs) that can be a one-stop shop for investors. Fees are in the 0.25% range.

    Why self-directed investing may not be the answer

    The problem with buying an ETF, Laasya, is that your kids are concerned about you investing on your own. And if they wanted to be self-directed investors, they probably would have offered to help you manage your investments. They did not. So, if you pull your investments to manage them yourself again, you may be putting your kids in an uncomfortable position, as they may potentially have to become DIY investors at some point if you’re unable to manage your own investments.

    Self-directed investing may seem easy to people who are comfortable doing it. But I remain convinced that some people will never be able to manage their own investments, no matter how simple it becomes.

    Have you considered a robo-advisor?

    I often joke with my wife that I am very good at a short list of things in the financial planning realm, but not much else. There are plenty of things that I could probably learn to do around my house or in other aspects of life that I have no interest in learning. I would rather pay an expert.

    [ad_2]

    Jason Heath, CFP

    Source link