Questrade VS Wealthsimple: Which Online Broker Should You Choose?

Questrade VS Wealthsimple
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    Online brokerage has grown in popularity in recent years, driving down trading costs between fiercely competitive platforms. There are now a wide variety of online brokers on the Canadian market, with different prices, features and tools. With the arrival of new players and an expanding user base, it can be difficult for you to find a platform that’s right for you. In this article, we’ll be talking about two of the country’s best-known online brokers, Questrade vs Wealthsimple.

    Quick look at Questrade vs Wealthsimple

    Take a look at the table below to understand each player’s strenght. While Wealthsimple charges no fees, is very easy to use for begginers and has pretty decent features, Questrade offers more account types, more advanced products to trade and analysis tools as well as access to more markets.

    QuestradeWealthsimple Trade
    Account minimumX
    Account types availableX
    Variety of products availableX
    Dividend reinvestment and fractional sharesX
    User-friendly platformX
    Advanced analysis toolsX
    Access to US and global marketsX

    Types of accounts: Questrade takes the lead for advanced traders

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    Questrade has an advantage over Wealthsimple in terms of the variety of account types offered. Questrade offers tax-free savings accounts (TFSAs), registered retirement saving plans (RRSPs), FHSAs to buy your first home, margin accounts and registered education savings plans (RESPs) for your child’s future. More retirement accounts are also available, including registered retirement income funds (RRIFs), as well as accounts for trading CFDs (contract for difference) and Forex.

    By comparison, Wealthsimple Trade offers the option of investing in the same personal accounts mentioned above, with the exception of CFDs and Forex. That being said, only a few investors need Forex and CFDs. This means that Questrade has a definite advantage but only for those advanced traders.

    Both brokers allow you to fund your accounts quite quickly. You can fund your account instantly with Visa Debit with Questrade, for instance. A small part of your deposits to Wealthsimple are also instantly available to trade, while the rest might take between 3–5 business days to arrive. I know I always get the first $1,000 instantly.

    Investment products: Questrade still stands out

    When it comes to the investment products offered by the two online brokers, there are also differences between Wealthsimple Trade and Questrade. With Wealthsimple Trade, you can buy stocks, options, crypto and exchange-traded funds (ETFs) on the TSX, NYSE, NASDAQ, NEO and CSE markets. There are also limited stocks available on BATS. In short, we’re talking about Canadian and U.S. markets. Additionally, Wealthsimple offers to invest in Private Credit to clients who have deposits of $100,000 or more.

    Questrade offers a much broader range of products. Investments offered by Questrade include guaranteed investment certificates (GICs), bonds, options, contracts for difference (CFD), Forex, IPOs and new issues, precious metals and more, in addition to North American and international equities and ETFs. By comparison, Wealthsimple offers a much more limited choice.

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    Dividend reinvestment and fractional shares: Wealthsimple takes the lead

    Picture of Wealthsimple app once I bought a stock, offering dividend reinvesting

    Want to make investing easier? Set up a dividend reinvestment plan. Both brokers offer this option. On Questrade, you can set it for most stocks and funds including ETFs. The good news? Your dividends will automatically be reinvested with no commissions! Questrade will buy whole shares (no fractionals) using the dividend payment you received.

    Wealthsimple takes things a step further. You can activate dividend reinvestment and they will automatically buy whole or factional shares with your dividends. In fact, when you buy a stock, they will inform you that if it is eligible for dividend reinvestments (as shown on this image).

    Fractional shares are a great way to avoid letting the dividends sleep in your account. Thanks to fractional shares, you can buy stocks in large companies (like Tesla or the Canadian National Railway) even if you don’t have the money to buy a full share.

    Say, for example, that you have 10 shares of a compagny, currently trading at a market price of $50. They just paid you 15$ in dividends. While Questrade wouldn’t be able to purchase additional whole shares at $50, Wealthsimple can buy a fraction of one share with $15 on your behalf.

    How much does it cost? Wealthsimple Trade is much cheaper!

    Wealthsimple Trade distinguishes itself from its competitors by charging no commission on the purchase or sale of ETFs and Canadian equities. It’s worth noting, however, that this platform can take advantage of the spread – the difference (a few cents) between the purchase and sale prices of a stock. The application normally warns you that a difference of 5% may apply due to price fluctuation, but you usually end up paying the price shown when you place the order.

    If you want to trade US securities, Wealthsimple Trade can eliminate exchange fees on these transactions for $10 per month. In addition, there’s no minimum amount required to open a Wealthsimple Trade account. You can start with as little as $1!

    Questrade charges more fees. For stock purchases, users must pay 1 cent per share with a minimum of $4.95 and a maximum of $9.95 per transaction. The purchase of ETFs is commission-free, but users must pay between $4.95 and $9.95 to sell them.

    Questrade charges a foreign currency conversion fee for purchases in US dollars. Those with a USD account can trade US securities as they wish. To open an account, Questrade requires that people between the ages of 18 and 25 who wish to open a self-directed account and people of any age who wish to open a FHSA account invest a minimum of $250. The minimum amount for people over 25 years old wishing to open a self-directed account is $1,000.

    Wealthsimple TradeQuestrade
    Annual FeesNoneNo annual fee for RRSP, TFSA, FHSA, RESP, RIF accounts
    Account Minimum$0$250 for FHSA accounts and people 18-25 years old
    $1,000 for other self-directed accounts
    CommissionNoneCommission-free ETFs (purchase)
    1¢/share (min. $4.95 – max. $9.95)
    Other fees (product-specific)
    U.S. dollar transaction fees$10/month or 1.5% FX fee1.5% FX fee
    Inactivity fee$0$0
    Unsubscription$0$50-$100 for deregistering some account types

    What kind of tools do you need?

    Types of alerts I can set on Wealthsimple Trade

    The Wealthsimple Trade platform is simple and easy to navigate. You can easily search for and track stocks using your watchlist, or place an alert to get a stock a the price you want.

    For example, I may want to buy more shares of WFG if the price drops or when it reaches its 52-week high, depending on my strategy.

    However, there are no analysis tools. You can see the navigating price (or quote), but you won’t be doing any technical or fundamental analysis here!

    You might be more interested in Questrade if your portfolio is getting messy and needs rebalancing. Its alliance with Passiv automates your portfolio rebalancing. Questrade also sends a newletter called Morning Brief everyday. It contains news about the stock market and trading ideas.

    Once you are on Questrade platform, you can place stop orders, trailing stop orders and conditional strategies, for example. All platforms include quotes, charts, watchlists, news and account management. The image below shows how you can compare two stocks based on fundamental data about the companies.

    Fundamental analysis data shown on the Questrade trading platform

    Looking for a user-friendly app? Choose Wealthsimple Trade

    The Wealthsimple app is a bliss. You will not be overwhelmed by too many indicators or any other information. The downside is that you’ll have to use other tools to decide when to buy the particular stock you are looking into.

    Questrade offers several platforms, some allowing for the customization of your workspace. Depending on your comfort level and trading activity, there’s Questrade Trading and Questmobile, the basic version for your computer and mobile phone with a learning mode for beginners. To place advanced order types and trade select products, you will need the Edge platform, for computer or mobile, and the Global platform (for Forex and other advanced trading products).

    May the best broker win!

    It’s impossible to say which online broker is the best. They cater for investors with different profiles. Always compare online brokers before choosing.

    Wealthsimple Trade is ideal if you want to get started in the world of investment or if you’re style is passive investing (buy-and-hold). Its approach is really focused on making the trading process easier for the investor. For advanced and very active investors, however, it lacks some functionalities.

    Questrade is perfect for active investors who own a variety of accounts. This platform is suitable for experienced investors who trade more sophisticated products and who wish to use powerful tools.

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    Maude Gauthier is a journalist for Hardbacon. Since completing her Ph.D. in communications at University of Montreal, she has been writing about finance, insurance and credit cards for companies like Fonds FMOQ and Code F. As a responsible user of credit cards, she can spend hours reading the fine print to fully understand their benefits. Because of their simplicity, she developed a preference for cash back cards. After suffering steep increases with her former insurer, she can now proudly say that she saved hundreds of dollars by shopping around for her auto and home insurance. In her free time, she reads novels and enjoys streaming popular shows (and possibly less popular shows, like animal documentaries).