When it comes to making major financial decisions, we are sometimes flooded with various investment choices that become a bit overwhelming.
Luckily for us, we have different websites and platforms that take all of the burdens off of us when it comes to making these choices.
If you’re anything like me, as much as investing and making money makes me excited, it also drives me to the brink of insanity when I have to look through the different investment options which look pretty appealing.
Thank goodness for sites like Wealthsimple and Wealthbar (CI Direct Investing). They narrow down the choices and help us choose the best financial options which also fit our budgets.
However, with these two fantastic websites, it becomes a bit difficult to choose which one to use…
We’re gonna help you decide what site is the best for you!
Hang on! It’s gonna be a fun ride!
What is Wealthsimple?
Wealthsimple is a web-based investment manager that blends cutting-edge technology with professional financial advice. They offer you the option of investing in a managed portfolio (Wealthsimple Invest), self-directed trading (Wealthsimple Trade), or a high-interest savings account (Wealthsimple Save) (Wealthsimple Save). They’ve been around since 2014 and now manage over $3 billion in assets.
They began by offering smart, straightforward investing without the high fees and account minimums associated with conventional asset management.
Their cutting-edge technology helps you earn the best possible return while minimizing your tax bill by investing your money in a globally diversified portfolio of low-cost index funds.
This means they can do things like automatic rebalancing, dividend reinvesting, and tax loss harvesting, which were previously only available to the ultra-rich or were too time-consuming and boring for most people to do on their own.
What is Wealthbar (CI Direct Investing)?
In British Columbia and Ontario, Wealthbar is a licensed fund manager and full life insurance agent. They advertise themselves as providing quality online investment at a low cost. They are in control of over $275 million in cash.
With convenient online savings and investment resources, as well as financial advice at your fingertips, Wealthbar makes it simple to develop your financial future. Their services aid you with:
- Saving for your future in the ease with a professionally run portfolio that is tailored to your objectives.
- With high-interest savings, you can put your money to work at the click of a button.
- Getting answers to your money; questions whenever and wherever you want, so you can make informed decisions.
- Financial advice and retirement plans are included in your already low charge, so you can prepare for a better future.
Similarities Between Wealthsimple and Wealthbar
Robo-Advisors
Wealthsimple Invest and WealthBar are referred to as “robo-advisors,” which means that your investments are handled by algorithms designed to optimize your return.
Traditional financial consulting firms, on the other hand, use humans to handle your assets. Robo-advisors continuously rebalance your portfolio, tweaking the investment mix by buying and selling properties, based on your risk tolerance.
Investment Options
ETFs are included in the portfolios of both Wealthbar and Wealthsimple. ETFs, including mutual funds, serve as holdings for a variety of other portfolios.
The difference is that mutual funds are actively managed by individuals, while ETFs adhere to strict rules that are defined from the start. Due to their lower overhead costs, ETFs aim to closely track whole markets and are much less costly to buy than mutual funds.
Both services will build a portfolio for you that includes ETFs that cover corporate bonds, US stocks, foreign stocks, Canadian stocks, high-yield bonds, real estate, government bonds, and other properties.
With Wealthbar or Wealthsimple, you won’t have a say on the particular funds/investments you want.
Account Types
The types of accounts available at both advisor firms are almost identical. Both offer RRSPs, TFSAs, and RESPs, as well as general savings accounts, RIF/RRIFs, non-registered accounts, and LIRAs, among other options.
Customer Support
Wealthsimple Invest and WealthBar also have in-house blogs that include a wealth of general financial and investing advice.
Both sites often have lengthy “general questions” pages that answer the most frequently asked questions about how their services operate. Both companies have smartphone applications that provide many of the features of their websites.
Requirements and Funding Methods
Both Wealthsimple and Wealthbar allow you to open an account with no money, but neither will begin investing until you have at least $1,000 in your account.
Using their website or mobile app, you can connect your chequing account and pass money in and out. You have the choice of making a one-time or recurring deposit. It takes a few days for both services to post (apply) the money you deposit to your account.
Safety and Security
Wealthbar and Wealthsimple both prioritize the safety of your assets.
Both services rely on third-party custodians (companies that actually hold the assets) that are insured by the Canadian Investor Protection Fund (CIPF).
In the unlikely event that one of these custodians goes bankrupt, your savings (but not their value) are covered up to $1 million.
Differences Between Wealthsimple and Wealthbar
Financial Advisors
If you spend $100,000 or more with Wealthsimple Invest, you can upgrade to the Black plan, which is a premium account.
It includes an annual in-person meeting with a Wealthsimple Invest financial adviser, as well as other benefits including access to VIP lounges at certain airports.
You will unlock Wealthsimple Invest Generation and get access to financial advice “whenever you need it” if you invest over $500,000.
For a free introductory session, WealthBar matches you with a licensed financial advisor to review your situation. Clients are said to receive regular feedback from the advisor to keep their financial plans on track, according to the company’s website.
Fees
Both Wealthsimple and Wealthbar charge a management fee depending on your portfolio’s worth. The lower your fee, the more you invest.
For the first $150,000 invested, CI Direct Investing / Wealthbar charges 0.60 percent per year, 0.40 percent per year for the next $350,000, and 0.35 percent per year for every additional sum.
If you spend less than $100,000, you’ll pay 0.50 percent per year, and if you invest $100,000 or more, you’ll pay 0.40 percent per year. Investors will also be charged a Management Expense Ratio (MER) on the ETFs in their portfolios.
Wealthsimple’s ETF collection has marginally lower MER fees, averaging about 0.20 percent, compared to CI Direct Investing’s approximate 0.26 percent to 0.34 percent.
Conclusion
The services Wealthsimple Invest and WealthBar are strikingly close. The most significant distinction is that WealthBar needs a $1,000 minimum investment to get started, while Wealthsimple Invest does not.
If you invest less than $100,000, Wealthsimple Invest’s fees are marginally lower, but WealthBar’s fees become more appealing as you exceed the $500,000 investment threshold.
Wealthsimple has plenty to say for those who want to combine automatic investing with other services including a savings account and stock trading.
Wealthsimple customers are on track to get more value in the long run than Wealthbar customers, despite the fact that its additional services are currently rudimentary.
With that being said, If you’re like me (just getting started in the investment game) and you don’t have a lot of cash to spare at the moment, then I would highly recommend WealthSimple.
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