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Email this10:00 am
April 27, 2017
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WS announced a bunch of new features which will become available over the next few months. It's a long list, most of them are of no interest to me but might interest:
- gold bugs
- active traders
- option traders
- people who use “wealth management” services
- people who hold mutual funds
However, I am definitely interested in Norbert’s Gambit. Its not a big deal but nice to know it's there if and when I need to convert CAD to/from USD. Not yet clear who will have access and how much it will cost if you are not an active trader. Once NG becomes available I’ll have all the features I need/can think of from WS.
Direct indexing might be worth looking into as well but we don’t have enough info yet.
Also: WS doubled assets under management in less than a year to $100bn. At this rate CIBC and Scotia might lose a spot in the not too distant future. WS is de facto joining the select group of “systemically important banks” while not being a bank.
6:03 am
April 27, 2017
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G&M:
Wealthsimple’s transformation from robo-advisor to neo-bank may represent the most significant fintech development in Canada. Its innovation lies less in visible products, such as commission-free trading or crypto access, and more in controlling the infrastructure that supports them. By integrating custody, payments and banking functions, Wealthsimple has created a digital-first financial utility that blurs the boundaries between broker, bank and payment provider.
Aligns with my experience. All money related operations are now seamless and integrated, everything is fast and convenient.
1:57 pm
March 30, 2017
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one thing they offer but clumsy is the money market portfolio feature. Yes it gives u 2.5% which is at par with other prem mm fund, but u can not place buy and sell urself. You need to contact them if for example, you want to use that money to buy some equities. Someone has to manually move it over from the money market portfolio to ur stock portfolio account, and takes 2-3 biz days....
Because of that, I will continue to only use them for equity portfolios etc.
2:19 pm
April 27, 2017
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savemoresaveoften said
one thing they offer but clumsy is the money market portfolio feature. Yes it gives u 2.5% which is at par with other prem mm fund, but u can not place buy and sell urself. You need to contact them if for example, you want to use that money to buy some equities. Someone has to manually move it over from the money market portfolio to ur stock portfolio account, and takes 2-3 biz days....Because of that, I will continue to only use them for equity portfolios etc.
Apples and oranges.
Their “portfolio” is a robo-advisor type of service. Its a bunch of bond ETFs and other types of debt. Not the same as bank MMFs. You tell them risk tolerance and they pick products. They also reinvest distributions, rebalance and (maybe) adjust based on markets. You can lose money but expected return is a bit higher than bank mmfs. Not sure where you got 2.5% from. Yield varies but right now likely closer to 3.5%, depending on your level of risk for your “money market portfolio”. Not sure how long it takes to withdraw; i’d be surprised if its genuinely 3 days.
They also offer decent rates on cash. I get 2.25% which is like a bnk MMF but won’t lose money. And you can either spend or deploy this cash instantaneously, far more convenient than with bank brokerages. No settling/waiting bs.
I consider this a major advantage to WS; having to constantly buy and sell bank MMFs to avoid idle cash in accounts is a constant pain in the behind. If they wanted to provide a good service they would either offer to do it automatically or pay interest on cash. But they don’t care so they lose customers.
5:17 pm
March 30, 2017
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April 27, 2017
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savemoresaveoften said
@mordkohttps://help.wealthsimple.com/hc/en-ca/articles/39416362467099-Open-a-Money-Market-portfolio
this
Fair enough, this product is a week old. Personally I would keep money as cash @2.25%, CDIC and with instant access.
P.S. does not show as an option in the app in the list of their portfolios.
4:56 am
March 30, 2017
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mordko said
Fair enough, this product is a week old. Personally I would keep money as cash @2.25%, CDIC and with instant access.
P.S. does not show as an option in the app in the list of their portfolios.
I was hoping to use that as temporary place to park cash inside registered account.
Right now the only way to do it is via MNY, CASH or other cash stock ticker only.
5:02 am
April 27, 2017
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savemoresaveoften said
I was hoping to use that as temporary place to park cash inside registered account.
Right now the only way to do it is via MNY, CASH or other cash stock ticker only.
Ok. And what would be “MMF portfolio’s” advantage over HISA ETFs?
6:34 am
August 4, 2010
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They already had their Registered Savings accounts for RRSP/TFSA/etc., which was essentially the tiered rates from their Chequing account, without the direct deposit boost option, but CDIC coverage, and immediate access.
This looks like it is still bank deposits, but not in your trust/name, so no CDIC coverage, but covered by the CIPF brokerage guarantee. Since it is still bank deposits and they claim it is currently 2.5% instead of 2.25%, I'm guessing they are passing through some of the sliver of their actual rate from the banks that they consume for themselves in the Chequing. So at least right now, you get an extra quarter point, but it is T+1 instead of available instantly.
I think the HISA ETFs that are actually bank deposit are probably getting the same sort of rate as Wealthsimple is for a big pot of deposits - they have a MER, and Wealthsimple is likely taking a similar 10-15bps slice themselves.
Not sure if they'll keep both around, or phase out the Registered Savings. They do like throwing new spaghetti against the wall every now and then to see what sticks.
9:08 am
April 27, 2017
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Yes, that makes sense. They are likely pandering to former bank brokerage clients who are used to MMFs. I am struggling to see any practical benefit over alternatives already available within WS.
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