|Papasan Pickles make Couch Potatoes look motivated!|
Weathsimple.com boasts the use of cutting edge technology and Nobel-prize winning research to edge out others and help boost returns.
"Your portfolio is automatically optimized and rebalanced, which can add up to 4% additional returns vs. the average investor."
Here is the secret recipe for these returns and the various amounts investors can save/earn:
Wealthsimple compares the cost of fund expenses, advisor fees and trading fees as well. The Wealthsimple fees includes a 0.35% to 0.50% management that depends on the size of you portfolio plus the embedded funds fees of 0.25%. Under $100,000 you will pay 0.5% (0.75% total) and over $1,000,000 you pay 0.35% (0.60% total). That is a competitive total fee compared to other one-stop investing products and funds that we have reviewed in the past.
Basically you are paying 0.35-0.50% in fees for Weathsimple to allocate the assets in your portfolio from the standard basket of asset classes. The proportion of assets is based on you risk profile determined from answers to on-line questions related to your investment knowledge, tolerance for market ups and downs, need for income vs. growth, income level and security. Below are the allocations for the risk scores between 5 and 10. The allocation for a risk score of 5 is 40% bonds and 60% equity, similar to a Global Couch Potato or Complete Couch Potato portfolio. At the other extreme (risk score of 10) its 10% bonds, 90% equities.
Click on the smaller images to enlarge to see asset allocation.
The fees for similar portfolios for DIY investors would be as low as 0.20% if you buys low MER Vanguard and iShares ETF commission-free (e.g., Questrade) - the Couch Potato investor would save up to 0.55% to 0.40% over a Wealthsimple investor (aka the hands-off, sedentary Papasan Pickle investor). You do the math - is the convenience and expertise of the Wealthsimple portfolio services worth several hundred dollars a year on each $100,00 invested? Likely the answer is "Yes" to inexperienced investors who don't have the time or desire to learn to trade. Face it - time is money: you could put a few hours into your day job instead of ETF trading/balancing/book-keeping and get further ahead further financially by boosting your bonus (e.g., take on some corporate initiative to get noticed, participate in an industry group to raise your profile and enhance job prospects, treat your boss to a round of golf).
So Wealthsimple fees are certainly competitive compared to other all-on-one solutions considering the service provided. Their fees of 0.55%-0.75% are comparable to what you'd pay with TD e-series funds or index mutual funds at a broker in a balanced DIY portfolio. Wealthsimple fees are even less than Tangerine Investment Funds (formerly the ING Direct Streetwise Portfolios) whose 'one-fund', non-nonsense, no-trading-required balanced index fund has a MER of 1.07%.
The bottom line? Investors looking to get out of expensive mutual funds, and Couch Potatoes who want an even more hands-off approach to their DIY investing, should consider the value (time and money) offered by Weathsimple to help meet investing needs.
Check out other ideas on robo-advisor products:
...and low fee balanced portfolios and ETF wraps:
Also, here is out updated comparison of Wealthsimple and Nest Wealth:
Wealthsimple Nest Wealth Fee Comparison