Wealthsimple vs RBC

Comparing the fees and features of Wealthsimple vs RBC

Comparing Exchange Fees

Fees Summary

The biggest difference between RBC and Wealthsimple fee structures is that Wealthsimple does not charge commission or other fees when buying or selling stocks, nor any fees for customers who fail to maintain a certain account balance, while RBC does.

RBC Fees Explained In-Depth

Stocks and ETFs

RBC charges a flat fee of $9.95 per transaction, or $6.95 per transaction for Active Trader clients, which is available to those who surpass 150 trades per quarter. This fee is applicable to all stocks and ETFs when orders are placed through the company’s website or mobile application (additional fees for orders placed with investment service representatives outlined below). Fees are charged in the currency in which trades are made. 

Options 

RBC charges $1.25 per contract for options trading plus an additional $9.95 fee per transaction, or $6.95 for Active Trader clients who complete more than 150 trades per quarter. 

Orders Placed Using an Investment Services Representative 

Additional fees are applied for orders placed through an investment representative in person or over the phone. For Stocks and ETFs there is a 2.5% commission fee applied when trading those priced at $.50 or less; a $35 commission fee plus $0.02 per share for stocks and ETFs priced between $.51 and $2.00; and a commission fee of $35 plus $0.05 per share on stocks and ETFs priced $2.01 or more per share. For options trading through an Investment Services Representative there is a commission fee of $35 plus $1.75 per contract. There is also minimum commission of $43 per transaction on all orders placed through an Investment Services Representative. 

Mutual Funds 

Purchasing mutual funds or switching them will result in a commission fee equivalent to 1% of the gross trade amount, with a maximum fee of $50 per trade. The fee is charged in the currency of the fund itself, and exchange fees may apply. There are no fees associated with selling mutual funds. 

Maintenance Fee

RBC Direct Investing Accounts are subject to a $25 fee per quarter, totalling $100 per year. That fee, however, is waived for clients with combined assets of more than $15,000 across all of their RBC Direct Investing accounts. That includes registered accounts like RRSP and TFSA accounts. The fee is also waived for those who sign up for a pre-authorized contribution of $100 a month (or $300 per quarter); those who have had an RBC Direct Investing accounts for less than 6 months; or those who complete a total of three or more commission-paid trades during the quarter across all account types. There are also exemptions for those with a group RRSP account, Student and VIP Banking package holders, and members of the RBC Direct Investing Royal Circle Program. 

Fixed income Products 

RBC also offers a number of fixed income products, including treasury bills, bonds, strip bonds, debentures and other money market instruments. The minimum commission fee charged on these fixed income products is $25 per transaction, or $43 for orders placed with an Investment Services Representative, with a maximum commission fee of $250 per transaction.

Gold and Silver Certificates 

The minimum commission fee for purchasing, selling or trading gold and silver certificates is $43 per transaction, and there is a minimum quantity requirement of 5 oz. of gold per trade and 100 oz. of silver per trade. The commission fee for both gold and silver certificates is $28.95, plus $1 per ounce of gold or $0.10 per ounce of silver. All gold and silver certificates are transacted in US dollars, meaning fees are converted into US dollars as well, and may include additional conversation costs. 

Wealthsimple Fees Explained In-Depth

Conversion Fees 

Wealthsimple Trade charges a flat fee of 1.5% for currency exchanges to Basic users, but clients who subscribe to Wealthsimple Plus have their own USD accounts and pay no fees on USD trades (the fee still applies when moving cash between CAD and USD accounts). Wealthsimple Plus costs $10 per month plus applicable taxes.

For Basic account holders the fee applies to exchanges from CAD to USD and vice versa, and for both purchases and sales. That means that, using an exchange rate of $1.3 USD for every $1 CAD, for example, users would instead be charged $1.3195 Canadian for each dollar they purchase of an American-based asset (or $1.3 plus an additional 1.5%). On the flip side those selling $1 worth of a US-based asset, with an exchange rate of 1.3, would instead receive $1.2805 per dollar from the sale (or $1.3 minus an additional 1.5%). 

Commission Fees

Wealthsimple does not charge commission fees for any asset class other than cryptocurrencies. That means users can buy or sell any other asset class in Canada or the United States without any additional fees. There are also no fees for opening or closing an account, making deposits or withdrawals, electronic statements, or inactive account fees. 

Crypto Exchange Fees

Wealthsimple charges a flat fee of 1.95% for all Crypto exchanges. 

Wealthsimple Plus Fees

Those who want access to a range of premium features have the option to upgrade from a “Basic” to a “Plus” account. The upgraded accounts are available for $10 per month, plus applicable taxes. 

Plus accounts are cost efficient for those who are making frequent and/or large trades across the Canada-U.S. border. That is because Plus users can access USD-trade accounts, which allows them to make cross border trades without foreign exchange fees (a 1.5% FX fee still applies to cash transfers between CAD and USD accounts). The upgraded service also includes real-time quotes, and an instant deposit limit of $5,000. By comparison, Basic users will experience a 15 minute delay when receiving price quotes, and have an instant deposit limit of $1,500.

RBC vs Wealthsimple’s Managed Investing

Both RBC and Wealthsimple offer managed investing solutions for customers that want to invest in portfolios that suit their investment goals. Wealthsimple offers three primary managed portfolios with a flat fee of 0.5%, or 0.4% for accounts with over $100,000 under management. RBC, on the other hand, has five different options, each with its own fee structure. While Wealthsimple does not require a minimum investment, RBC customers must typically invest at least $500 into each portfolio. 

*Management expense ratio (MER) includes both operating fees and management fees, and does not include commission fees.

Wealthsimple’s Managed Investing Portfolio Performance Overview

Wealthsimple offers three managed investment portfolio types: Conservative, Balanced and Growth. Over the last five years the Conservative portfolio has appreciated at an average rate of 1.59% per year; Balanced has grown at an average annual rate of 2.58%, while Growth has seen annualized growth of 5.09%. Returns, however, vary significantly across different time horizons. Furthermore, it’s important to note that portfolios offering higher returns are also associated with higher risk profiles, and past performance isn’t necessarily an indicator of future potential. 

RBC’s Managed Investing Portfolio Performance Overview

RBC offers an array of managed investing portfolios which is broken down into five distinct investor profiles: Very Conservative, Conservative, Balanced, Growth and Aggressive Growth. Over the last five years the Very Conservative portfolio has appreciated at an average rate of 2.3% per year; Conservative has averaged 3.2% growth each year, Balanced has grown at an average annual rate of 4.4%, Growth has seen annualized average return of 5.3, while Very Aggressive has growth at an average annual rate of 6.6%. Returns, however, vary significantly across different time horizons. Furthermore, it’s important to note that portfolios offering higher returns are also associated with higher risk profiles, and past performance isn’t necessarily an indicator of future potential. 

RBC Direct Investing vs. Wealthsimple: App Features

Wealthsimple and TD both offer apps that are free to download and provide access to real time trade data, a trading platform and other useful resources. Both also offer two account types, though RBC’s “Active Trader” account requires users to complete a high volume of trades — 150 or more per quarter — in order to access reduced pricing. Wealthsimple Plus, meanwhile, is open to all users for a fee of $10 per month. 

Both mobile apps also offer unlimited free price alerts and real-time quotes, however there is a 15 minute delay for price alerts for Wealthsimple Basic users. Real time quotes, however, are typically only necessary for those making short-term investments, where a few minutes could make a more dramatic difference. Both platforms also offer an array of educational resources and live assistance, such as Wealthsimple’s free Investing Master Class and RBC’s free Practice Accounts.

Where the two differ most is in their fee structures, with RBC charging different rates for different managed portfolios and Wealthsimple charging a lower flat rate for all managed portfolios. Those managed accounts also require a minimum investment of $500 for most RBC customers, while investing with Wealthsimple does not require any minimum purchase amounts. RBC also charges fees for RSP withdrawals and other managed account types, and requires account holders to maintain a minimum balance of $15,000 across all account types in order to avoid a maintenance fee, while Wealthsimple does not impose any minimum investment or account balance requirements.