Is Wealthsimple Safe? A Complete Overview for New Investors

So you’re thinking about trying out Wealthsimple?

Or maybe you already opened up an account with them but still have a few questions. If one of those questions is about whether is Wealthsimple safe or not, well this article is here to help.

Simply put, Wealthsimple is a safe platform for investing your money. With over 1.5 million customers and over $15 billion under management, Wealthsimple has gained a great reputation in Canada for being a safe, legitimate and reliable online investment platform.

As a Wealthsimple customer since mid-2018, I have trusted them with my money for over 5 years and have not had any issues. I go into more detail about my experience below, but if you don’t have time to read on and want a quicker answer, just know that, yes, Wealthsimple is a safe platform to open up an account with to start investing.

Okay, so now that we’ve got the basics out of the way, below we will get into more detail on the safety features that Wealthsimple has as a part of their platform, and we’ll also get input from other Wealthsimple customers as well as what Wealthsimple has to say on the matter (yes I reached out to them).

Is Wealthsimple Safe?

Wealthsimple, founded in 2014 by Michael Katchen, Rudy Adler and Brett Huneycutt with over 1.5 million customers and $15 billion under management, is a safe platform to invest with and has all the industry-standard security measures in place to ensure your money is safe and secure.

Mr. Katchen co-founded Wealthsimple which now holds $15B assets under management. He has been called an Industry Mover by the Financial Post, a Change Agent by Canadian Business Magazine, and one of Toronto’s 50 most influential people by Toronto Life.

Source: Intact.com ^[1]

Rudy Adler is the co-founder and chief product officer of Wealthsimple, a financial advisory company that builds powerful financial tools to help its users grow and manage their money. He is also the founder of 1000Memories.com (YC ’10), acquired by Ancestry.com in 2013. Previously, Adler worked at Wieden + Kennedy .

Source: Crunchbase ^[2]

Brett Huneycutt is the chief operating officer of Wealthsimple, a financial advisory company that builds its users a diversified portfolio of low-fee funds. He is also the founder of 1000Memories.com. Previously, Huneycutt worked at Ancestry.com as a director and at McKinsey & Company as an engagement manager. He holds a bachelor’s degree from Boston College and a master’s degree from the University of Oxford.

Source: Crunchbase ^[3]

But what exactly are these standards that Wealthsimple has in place to make it such a safe platform?

What Makes Wealthsimple a Safe Platform to Use

1. State of the Art Encryption

First things first, Wealthsimple uses state-of-the-art encryption to secure its customers’ precious data. This data includes passwords and personal information such as name, birth date, phone number, citizenship, address, employment status, workplace, SIN number, and other personal information you’ll want to protect.

But what exactly does “state-of-the-art encryption” mean?

Well, let’s first define encryption -basically, when you hear something is encrypted, this means transforming plain text into what’s referred to as “ciphertext”, which is difficult (basically impossible) to decipher. In fact, the only way to crack the encryption is to have the encryption keys.

Well, Wealthsimple uses 256-bit SSL encryption, which means it has 2²⁵⁶ different possible answers as the encryption key, or in another format, the encryption keys could be this many different combinations, good luck trying to hack this! (yes, this is one big number)

115,792,089,237,316,195,423,570,985,008,687,907,853,269,984,665,640,564,039,457,584,007,913,129,639,936

Now, with all that said, I am not an expert in encryption or specifically 256-bit SSL encryption, but you can learn more about it here in this great resource which breaks it down for people like me!

2. Threat Detection Encoded into Wealthsimple Products

Another reason why Wealthsimple products are safe is that their security operations team, which we will talk more about in a minute, has encoded threat detection within the products.

By having these real-time security measures in place, threats are recognized and addressed much more quickly and because of the automated playbooks implemented into the code, the threats can often be mitigated without a lot of human action on behalf of the customer or Wealthsimple.

Now, Wealthsimple claims that implementing this was “no small feat” and that it was very “code-heavy,” but the results have been impressive, with a 50% decrease in high-severity incidents, and in general, the severity of threats have been much less.

So not only does this threat detection code help minimize the overall number of threats directed at Wealthsimple, but it also frees up bandwidth with the security ops team to deal with the high-severity threats on a more case-by-case basis.

3. World Class Security Operations Team

Behind all of this state-of-the-art encryption and software protecting Wealthsimple’s customer data, there is world class security operations team that Wealthsimple invests in.

If you go to LinkedIn, for example, and search “Wealthsimple Security,” you’ll see they have almost 60 employees working in security operations for Wealthsimple.

And when you look at the roles of these employees, it’s not hard to tell that they are running a tight ship. For example, some of the job titles are:

• Head Corporate Security Wealthsimple
• Security Engineering Manager
• Infrastructure Security Engineer
• Cyber Security Engineer
• Head of Security Analytics

So not only is Wealthsimple investing in cutting-edge technological infrastructure, but they’re also investing millions of dollars in having a world-class security team in house at Wealthsimple.

Do I know exactly what these jobs entail? No. But based on the job titles, I’m willing to bet they’re all focused on the continuous safety and security of Wealthsimple and ensuring Wealthsimple’s products have the highest level of security possible.

If that’s not enough to convince you that Wealthsimple takes this stuff very seriously, Wealthsimple also hired one of the top cybersecurity companies in the world to come in and lead the team through exercises in real-time to help pinpoint where they need to improve on or potentially where they need resources.

Wealthsimple and their team are all in on security. To learn more about how Wealthsimple is modernizing its security operation efforts, check out their article here on Medium.

4. Two Step Verification

Next up, we have two step verification. Now most reputable online platforms in today’s day and age will 2FA, but it’s still a great security benefit, regardless of if it’s the norm of not.

If you’re unfamiliar with two-factor authentication, it’s a process to help ensure that you, and only you, can access your online accounts. This means that in addition to your password, you must provide a verification code sent to your phone or email before you can log in.

Now with Wealthsimple, you can have it setup to have the code sent to your phone or email, I like having it setup on my phone because it just makes it easier to paste the 6-digit code into when signing it, and it’s usually a little quicker, but each to their own.

As you can see from the image, you can set it not to ask you for 30 days. That way, it won’t ask you to verify yourself every time you log in, I sometimes do this if I know I’ll be logging in a lot over the next few weeks for whatever reason.

So while 2FA can be a pain sometimes, as it takes an extra few seconds to get into our account, I’m all for it if it’ll help keep my account safe and personal data private.

Think about it, if signing in to your account is a minor inconvenience for you, imagine how much of a nightmare it would be for a hacker.

5. Cloud Technology Backups

Data being stolen is one thing, but it’s also important to ensure Wealthsimple doesn’t lose your data. Wealthsimple does this by using modern cloud-based technology to back up all your data so that regardless of what happens, it won’t be lost.

Think about this like iCloud if you have this setup.

In today’s world, if you lose or break your phone, your data is all stored in the cloud and constantly backed up, so you won’t lose things like messages, photos, notes and whatever else you have stored on your phone.

6. Wealthsimple investors Get CIPF Coverage

The CIPF is an acronym for the Canadian Investor Protection Fund, which is an organization that protects investors who have invested money with a firm that is a member of the CIPF. With CIPF coverage, investors are protected if the firm they invest their money with (Wealthsimple, in this case) becomes insolvent and can no longer meet their financial obligations. The CIPF will not insure losses from poor investment choices.

In other words, in the unlikely event that Wealthsimple went out of business, to a certain amount, your funds would be protected (up to $1 million) because Wealthsimple is a CIPF member.

CIPF Coverage Specifics

So for clients that hold stocks, ETFs, and cash in a Wealthsimple Trade or Cash account, just know all of these assets are included in CIPF insurance.

Quick Note: The CIPF does not provide protection for crypto assets. So if you have assets with Wealthsimple Crypto and Wealthsimple became insolvent, these assets would not be protected under CIPF.

To learn more about the CIPF and the coverage you’ll qualify for as a Wealthsimple client, see their official website here.

7. Wealthsimple is a member of the IIROC

Here’s another acronym for you – IIROC. IIROC stands for Investment Industry Regulatory Organization of Canada and it’s a regulatory agency that “oversees all investment dealers and trading activity on Canada’s debt and equity marketplaces.”

To put it another way, as a member of IIROC, Wealthsimple must adhere to its high standards of trading activity and market integrity.

So as a Wealthsimple customer, or one to be, you should feel confident that Wealthsimple has regulators looking over their shoulders, ensuring they are acting ethically and proficiently on behalf of their clients.

You can search for all of IRROC’s regulated dealers here.

Safety Features by Each Wealthsimple Product

You may not know this, but Wealthsimple doesn’t just have one product. In fact, Wealthsimple has many different direct-to-consumer products they offer to Canadians. They also have a Wealthsimple for Work product for employers looking to offer their employees group RRSP, but we won’t get into that in this article.

So here is a list of Wealthsimple’s products available to consumers like you and me.

Okay, so now we know what some of the overarching safety features are and what each product is, it’s time to talk about which of these safety features and coverages are related to what Wealthsimple products.

Plus, we will discuss some other safety features and regulations that each specific products have that aren’t mentioned above.

Wealthsimple Invest and Trade

Wealthsimple Crypto

Wealthsimple Tax

Wealthsimple Cash

Wealthsimple Save

My Experience with Wealthsimple

As I mentioned at the beginning of this article, I have been an Investor with Wealthsimple since 2018 and when I first signed up, I wanted a legitimate platform to invest with, and I wanted to feel that.

Now 5 years later I can honestly say I have never had any safety or security issues with the platform whatsoever. Not only that, but when using the platform I get a sense of comfort in some of the security measures in place when engaging with the platform.

Whether it be the two-factor authentication technology, the email communication about product updates, their social media presence or even just the quick and friendly customer support they offer, I genuinely feel like I’m dealing with a great company, which is something you want from a company you’ve invested money with.

I actually remember back in 2018 when I first got introduced to Wealthsimple through a paid Google Ad, and like you, I was curious to know how legit they were. So I did some research on them and found this video below on Youtube.

This is a video of Justin Trudeau visiting Wealthsimple’s headquarters in Toronto in 2017 to celebrate their 30,000 customers and $1 billion in managed assets.

I remember thinking that if the Prime Minister of Canada is visiting this company’s HQ and doing a news segment with them to celebrate their accomplishments, there is a good chance they are credible, which of course, they are.

But if that’s not enough to convince you, just look up who owns Wealthsimple, and you’ll see it’s owned by a publicly traded company called Power Financial Corporation. As a publicly traded company, they are obligated to publicly disclose information to prospective investors and shareholders, which would make any sketchy dealings very difficult to hide.

So based on my experience with Wealthsimple and the research I’ve done and outlined throughout this article, I am confident that Wealthsimple is safe platform to invest with, and you shouldn’t have any concerns about the legitimacy of the platform.

But don’t take just my word for it, in the next section you’ll see some of the responses I got when asking other Wealthsimple clients in Wealthsimple Facebook groups.

Pros and Cons fo Wealthsimple Invest

Pros

• Built for beginner investors
• Limited fees
• Automated investing feature
• RRSP and TFSA accounts
• Very sleek & modern user interface
• All-in-one mobile app
• Socially Responsible And Halal Portfolios
• Connects with other Wealthsimple products
• Reputation for being safe and secure
• No minimum deposit required
• Quick and easy account sign-up process
• Access to human advisors
• Very transparent on returns and fees
• Higher-tier plans available

Cons

• Limited control over investments
• Some competitors have lower fees
• No 24/7 customer support
• No advanced analysis tool or charts

Rating  

Start Investing with Wealthsimple

Testimonials from Wealthsimple Customers

Even though my experience with Wealthsimple has been safe and enjoyable, I wanted to see what other users thought of the platform.

As a member of a few Wealthsimple groups on Facebook, and asked the question:

“Hey members, I’m writing a blog post about the safeness of Wealthsimple.
Would anyone be able to comment on their experience with the platform regarding its safety and legitimacy

I’ve been using Wealthsimple for 5ish years now and have had no issues with their security, and from what I’ve read, it’s a very safe and secure platform – I would love to hear what other users have experienced!“

I’ve screen shotted the responses and added them below!

So as you can see from these responses, there isn’t a lot of negativity towards Wealthsimple and its legitimacy, and don’t we all know that if there was an issue, or it was, in fact, not a safe platform, people wouldn’t shy away from outing them on social media.

Companies can say they have all necessary security measures in place and that they are legitimate, but at the end of the day, the proof is in the experiences customers have had with them.

Not to mention, wouldn’t it be hard for a company to grow their customer base to over 1.5 million and be in business for nearly a decade with over $15 billion in assets under management if it wasn’t a safe and reputable company? It just wouldn’t happen.

The Bottom Line

And that’s a wrap!

While I typically enjoy recapping my articles and reviewing each section to highlight key points, I believe it’s unnecessary in this case. The crux of the matter is that Wealthsimple is an extremely secure, dependable, and trustworthy platform.

And I’m not simply just paying lip service either, as I’ve alluded to many times, I’ve been a satisfied user of Wealthsimple since 2018 and have never encountered any security issues or had any reason for concern.

So for one last time, based on all the reasons discussed and listed above, I can confidently assert that Wealthsimple is a secure option for anyone Canadian seeking to invest their money.

FAQs About the Safeness of Wealthsimple