We have done several articles about stock trading platforms on CanadaBuzz – refer to articles like How to Buy Stocks in Canada; How to Buy Stocks Online in Canada; 7 Best Online Stock Trading platforms in Canada.
Stock Trading Platforms vary from independent discount brokers, online brokerage platforms, to brokerage firms owned by the big banks also known as the Big Bank Stock Trading Platforms.
However, we have identified a Stock Trading platform that is free but the best choice of stock trading platforms in Canada is relative subject to the needs and preferences of the investor or stock trader.
This article will discuss a popular free stock trading platform with a focus on its unique offers to assist potential investors and traders make a choice on the best-fit and most suitable stock trading platform for their use.
This article will also compare the selected free stock trading platform with some other popular stock trading platforms to broaden the view of the readers and investors. It is essential to note that at the time of writing this piece, there is only one free stock trading platform in the Canadian stock market and it is known as Wealthsimple Trade.
We are not making financial recommendations or endorsing any of these stock trading platforms. Moreover, please note that this review is objective and written to help readers understand the different fees and services provided by the various free stock trading platforms.
Wealthsimple Trade
Wealthsimple Trade is the only CA$0-commission stock trading app in Canada. It is owned by Wealthsimple and is separate from their Robo-advisor service. Wealthsimple was founded in 2014 with its headquarters is based in Toronto.
Investors can use Wealthsimple Trade to buy and sell thousands of stocks and ETFs listed on major Canadian and U.S. exchanges while paying no commissions.
The investors’ funds are held with Canadian ShareOwner Investments Inc. which is a member of IIROC and CIPF. Wealthsimple has more than CA$10 billion in assets under management. Wealthsimple offers investors customized portfolios to fit their risk tolerance and investment objectives.
- Accounts offered: TFSA, RRSP, and non-registered personal accounts.
- Account minimum: CA$0
- Commission: CA$0
- Inactivity fee: CA$0
Wealthsimple Trade Fees:
Wealthsimple Trade charges no fees for buying and selling stocks and ETFs. Opening or closing of an account, withdrawing funds, electronic statements, and inactive accounts have a CA$0 fee. If an investor prefers a paper account statement, a CA$20 fee applies.
Wealthsimple Trade Safety:
Wealthsimple Trade is a division of Canadian ShareOwner Investments Inc. which is a member of IIROC and the Canadian Investor Protection Fund (CIPF). Their membership with CIPF is the insurance of safety for every investor’s funds. Investor’s funds are protected against insolvency up to CA$1,000,000.
Wealthsimple Trade Advantages:
- No trading commissions on buy or sell transactions
- No account minimums
- Have a Robo-advisor service – Wealthsimple Invest
- User-friendly mobile app
- Access to high-interest savings account via Wealthsimple Cash
Wealthsimple Trade Disadvantages:
- Margin accounts, bonds, and options are not available to trade.
- The type of investment accounts you can open are limited to three kinds.
Starting with Wealthsimple Trade
1. Download the App
It is only available on Google Playstore (android version) and IOS Appstore (IOS version).
2. Add Personal Information
The investor is expected to provide his or her personal information and banking details to link up an outside commercial bank account.
3. Activation
After the commercial bank account is linked to the Wealthsimple Trade account created, the investor will have to wait for about three days for the money to be transferred into the trading account to commence stock trading.
4. Trading
Once the set-up is complete and the account is funded, the rest is simple. The investor can do a general stock search via the search engine and start trading with just a few clicks. The investor can also create a watchlist and add the stock or ETF pending the time the investor wants to execute the trade.
Wealthsimple Trade Interface
Wealthsimple Trade is an easy-to-use platform. Its interface is straightforward and designed to be accessible to new and active investors who are interested in fewer details or information about a potential investment.
The app features simple charts of a stock’s performance—ranging from 1 day to 5 years—that are easy to navigate between. Some tabs let you see stocks and ETFs that are the “Most Active,” “Top Gainers” and “Top Losers.”
Although the app doesn’t offer many added features like the following: in-depth information about a stock; analysis tool; way to set automatic buy or sell trades; access to international stock markets (except U.S. markets), options, or preferred shares.
Moreover, the stock quotes on Wealthsimple Trade are not updated in real-time. There is a 15-minute lag, which could make a significant difference in some trading transactions.
Suitable Investors for Wealthsimple Trade
- It’s more preferable for trading Canadian stocks and ETFs.
- Suitable for mobile phone and pad users but not desktop users.
- Preferable for investors who only need basic stock information.
Wealthsimple Trade vs Questrade
Questrade is the most popular online discount brokerage platform in Canada. Here’s how Wealthsimple Trade compares to Questrade:
1. Accounts Offered
Wealthsimple Trade currently allows you to trade inside a TFSA, RRSP, or non-registered personal investment account.
On the other hand, Questrade allows trading inside a TFSA, RRSP, RESP, margin account, LIRA, LIF, RIF, and corporate investment accounts.
2. Account Minimum
You can open a Wealthsimple Trade account with just $100 and start trading.
Questrade requires a $1,000 minimum balance to trade on an account opened by an investor.
3. Financial Products
Wealthsimple Trade offers access to trade only U.S. and Canada-listed stocks and ETFs. Though not all Canada or U.S.-listed stocks are available through the platform.
Questrade offers access to a lot more investment products like mutual funds, options, bonds, OTC assets, IPOs, international equities, GICs, precious metals (gold, silver), and more.
4. Fees
Wealthsimple Trade charges no fees for buying and selling stocks and ETFs.
Questrade charges no fee when you purchase ETFs, however, a minimum fee of CA$4.95 per trade applies when you sell. For stocks, you pay 1 cent/share and a minimum of CA$4.95/trade to a maximum of CA$9.95 per trade.
5. Trading Platform
Wealthsimple Trade and Questrade have smartphone apps that are available on iOS and Android. The Wealthsimple Trade app is user-friendly. However, its functionality does not match that of Questrade.
Questrade offers a self-directed investor a lot more in investing tools, charts, market analysis, and data.
Wealthsimple Trade vs BMO InvestorLine
1. Accounts Offered
Wealthsimple Trade currently allows you to trade inside a TFSA, RRSP, or non-registered personal investment account.
However, accounts available under BMO InvestorLine are TFSA, RESP, RRSP, RRIF, LIRA, LRSP, LRIF, LIF, cash, and margin accounts.
2. Account Minimum
You can open a Wealthsimple Trade account with just $100 and start trading.
The minimum investment required on BMO InvestorLine is CA$5,000; no minimum balance for TFSAs or RESPs.
3. Fees
Wealthsimple Trade charges no fees for buying and selling stocks and ETFs.
However, BMO InvestorLine charges CA$9.95 per trade for stocks and ETFs.
Wealthsimple Trade vs CIBC Investor’s Edge
1. Accounts Offered
Wealthsimple Trade currently allows you to trade inside a TFSA, RRSP, or non-registered personal investment account.
CIBC Investor’s Edge offers the following accounts: TFSA, RRSP, RESP, RRIF, LIRA, LRSP, LRIF, PRIF, cash account (individual, joint, or corporate), and margin account.
2. Account Minimum
There is no minimum investment required on CIBC Investor’s Edge.
3. Fees
Wealthsimple Trade charges no fees for buying and selling stocks and ETFs.
CIBC Investor’s Edge charges CA$6.95 commission per trade (stocks). Students pay CA$5.95/trade and active traders (150+ trades per quarter) pay CA$4.95/trade.
4. Additional fees
Wealthsimple Trade charges no additional fees while CIBC Investor’s Edge charges a CA$100 annual fee if the registered account balance is $25,000 or less; or CA$10,000 or less for non-registered accounts.
Wealthsimple Trade Income
Wealthsimple Trade’s primary source of income on investors’ trading activities is from the 1.5% currency conversion fee charged on Canadian to US dollar conversions (and vice versa). This is often required to trade US-listed securities. Most brokerages charge around 2% on top of this rate for currency conversion.
Difference Between Wealthsimple Invest and Wealthsimple Trade
Wealthsimple Invest is a Robo-advisor. If an investor is looking to invest in ETFs, save on fees, and avoid the hassle of rebalancing your investment portfolio or carrying out market research.
Wealthsimple Invest offers a digital investment service that includes:
- Globally diversified portfolios customized to meet your needs.
- Low management fees (compared to the big banks)
- Automatic rebalancing
- Dividend re-investing
- Free financial advice
- Spare change investing features
- TFSA, RRSP, RESP, RRIF, and non-registered investment accounts
- Socially responsible portfolios, and more
However, if the investor would rather trade hands-on and prefer to assemble their portfolio themselves using stocks and ETFs, Wealthsimple Trade is the solution.
Conclusion
Wealthsimple Trade made the investments in stocks more accessible and less costly for Canadians being the first and only commission-free stock trading platform in Canada.
User reviews have been commendable and positive hence we recommend that potential investors whose needs can be achieved with the app should engage the app and share the experience.
