Is WealthSimple a Safe Broker?

Wealthsimple is a financial services company with offices in Toronto and New York. Despite having a presence in the US, the company does not operate within the United States.

Is Wealthsimple trustworthy? Keep reading to find out.

Wealthsimple Overview

The company started serving customers in 2014 and operated within the U.S. and Canada until 2021, when Wealthsimple sold its U.S. branch to Betterment.

The firm operates its own brokerage, crypto exchange, and tax preparation service and offers services related to investment advisement, banking and cash management, portfolio management, and automated investment.

Wealthsimple is now primarily active in the Canadian market, but U.S. investors can use the company’s services as international investors.

Is Wealthsimple Safe?

Anyone looking into Wealthsimple from the United States will see that the company recently ended its operating licenses in the U.S. As a result, it would make sense to wonder if Wealthsimple is safe and whether the financial services provider can be trusted.

The quick answer is yes, Wealthsimple can be trusted. It is a regulated firm with all of the required licensing and insurance to keep its customers safe.

Here are the details.

Is Wealthsimple’s Insured?

Wealthsimple has two forms of insurance that it uses to protect its customers. They are the Canadian Investor Protection Fund (CIPF), similar to the SIPC in the United States, and the Canada Deposit Insurance Corporation (CDIC), similar to the FDIC.

Is Wealthsimple safe?

Like their American counterparts, the CIPF protects investors' securities valued up to 1 million Canadian dollars, and the CDIC insures cash held in banking accounts up to $100,000 per coverage category.

Both forms of insurance are designed to protect against broker-related problems. If Wealthsimple were to go out of business, investors would be secure.

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Is Wealthsimple Legitimate?

Wealthsimple is regulated by the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Securities Administrators (CSA).

Between the two regulators, every aspect of the investment experience is monitored, with guarantees for fair pricing, transparent business dealings, and the protection of client data.

Although Wealthsimple is no longer registered with the SEC or FINRA, U.S. investors are still indirectly protected by them. Canadian brokerages must meet their standards in order to accept U.S.-based investors as clients.

Wealthsimple Customer Reviews and Ratings

Besides checking a broker’s regulatory and insurance obligations, looking at user opinions to understand how trustworthy a company is can also be helpful. We can look at the BBB, Trustpilot, and various app marketplaces to get information about the customer experience a broker provides.

So, what do investors think about Wealthsimple? The answer is a bit complicated, and you will see many mixed reviews circulating about the company.

Let’s take a closer look.

Wealthsimple Better Business Bureau (BBB)

Wealthsimple is not accredited by the BBB, but it does have a rating and several reviews on its website. The broker currently has the broker’s lowest rating (F) and has only been awarded a single star.

However, ratings on BBB are based on how brokers respond to client complaints, among other things. In Wealthsimple’s case, the seven unanswered complaints seem to be from the same year the broker’s U.S. business merged with another financial services company (Betterment). It is possible that Wealthsimple just didn’t follow up with customers after the merger.

Is Wealthsimple legit?

Application Marketplace Reviews

In contrast to the low rankings on the BBB website, over 3000 customers on Google Play have awarded the Wealthsimple Invest application with a rating of 4.6/5 stars. The story is similar on the Apple App Store, where nearly 125 thousand users have rated the app with 4.7/5 stars.

Is Wealthsimple a scam?

Is WealthSimple Safe Final Thoughts

To summarize, Wealthsimple is safe. It has had a few complaints in the past, but it is a fully licensed and regulated firm. Thanks to its regulators, trading activity on the platform and data processing are guaranteed to be fair and transparent. Additionally, investor capital is always safeguarded by two of Canada’s most prominent insurance providers.

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