Andrew Goldman has been writing for over 20 years and investing for the past 10 years. He currently writes about personal finance and investing for Wealthsimple. Andrew's past work has been published in The New York Times Magazine, Bloomberg Businessweek, New York Magazine and Wired. Television appearances include NBC's Today show as well as Fox News. Andrew holds a Bachelor of Arts (English) from the University of Texas. He and his wife Robin live in Westport, Connecticut with their two boys and a Bedlington terrier. In his spare time, he hosts “The Originals" podcast.
There are many different kinds of “fronts” that are readily available to Canadians. Cold fronts with the ability to freeze your nose shut and your eyes open? In most of our fine country, these fronts are unfortunately available nine months out of the year.
But there is one specific kind of front that is sadly not available anywhere in Canada: Wealthfront, the American robo-advisor. Yes, we’re very sorry to report that Wealthfront is not currently available in Canada. But fret not. There are solid alternatives.
What is Wealthfront and is it available in Canada?
Considering that you made it this far, we imagine you’ve probably already got a pretty good inkling of what Wealthfront is, so we’ll make it quick. Wealthfront is a Redwood City, California based tech startup founded in 2008 by venture capitalist Andy Rachleff, who is currently the company’s CEO.
Wealthfront is a robo-advisor, meaning that when people invest with the company, their money isn’t actively managed by humans but rather by a computer algorithm. You may want to take a deeper dive on robo-advisors, but suffice it to say that the general model of robos is to keep fees low through passive investment, that is, investing exclusively in low-fee ETFs that seek to mirror the returns of a sector or index, for example the S&P 500, the index of the 500 most highly valued companies listed on American stock exchanges.
Wealthfront is one of the largest American robo-advisors in terms assets under management, or AUM. As of 2019, Wealthfront reported managing more than $11 billion in assets for approximately 250,000 clients. Wealthfront is a FINRA-approved broker dealer. In other words, it’s legit.
But Wealthfront is not available in Canada at this time and appears to have no immediate plans to launch here. On its website, the company explains that “we currently require all Wealthfront clients to have a U.S. social security number, a permanent U.S. residential address, and currently reside in the U.S due to financial regulations.”
An alternative robo-advisor in Canada
Just because Wealthfront isn’t currently available in Canada doesn’t mean there isn’t a robo-advisor that offers nearly all of the same services as Wealthfront, and even some that Wealthfront doesn’t.
Consider Wealthsimple. Wealthsimple was founded in 2014 by Michael Katchen, a longtime market investor who had long helped friends and colleagues to invest wisely in low-fee, passive ETFs.
Wealthsimple is anything but a fly-by-night startup; it’s Canada’s largest automated investing service. It’s received $265 million in investment from some of the world’s largest financial institutions in Canada and Europe. As of May 2019, Wealthsimple boasted more than 150,000 clients and $4.5 billion of assets under management. Wealthsimple’s brokerage Canadian ShareOwner Investments Inc., which handles all client trades, is a member of the Canadian Investor Protection Fund (CIPF). CIPF is a program that insures all accounts up to one million dollars against member firms bankruptcy.
And Wealthsimple offers some cool products you won’t find with other robo-advisors. Recently, Wealthsimple launched Wealthsimple Trade, a commission-free stock trading app, as well as introducing a “roundup” feature on its app that allows clients to link a credit and/or debit account to their Wealthsimple account and invest any change left when a transaction amount is rounded up to the nearest dollar.
Even if you’re not quite ready to invest, anyone with five spare minutes can go to our two-time Webby-winning website and sign up for a Wealthsimple account.
Looking for the best automated investing service in all of Canada? Kick the tires at Wealthsimple. All Wealthsimple clients, regardless of their account balances, receive state-of-the-art technology, unlimited human support all for a remarkably reasonable management fee.