Introducing USD Acccounts, a Better Way to Trade U.S. Stocks

Here at Wealthsimple, we want every Canadian — regardless of how much they invest or where they are on their personal-finance journey — to have access to the most sophisticated investing tool. So we’re shaking up how we do things in a major way.

We’re thrilled to announce Plus, a new subscription service for Wealthsimple Trade clients. With Plus, you’ll pay $10 a month to effectively soup up your Trade account and unlock a bunch of new features. Among them:

All that for $10 is a pretty great bargain, if you ask us, especially since some other platforms charge that much in commissions for a single trade. But, in case you’re not yet entirely sold on a $10-a-month Plus subscription, let’s break down the biggest perk — USD accounts — in a bit more detail.

The money-saving beauty of USD accounts

OK, so if you’ve dipped even a teeny-tiny toe in stock trading, you’ve surely noticed that some — OK, a bunch of — companies’ stocks aren’t listed on Canadian exchanges but on U.S.’s ones, like Nasdaq or the New York Stock Exchange. That means, if you’re Canadian, buying these stocks usually carries various currency-conversion and transaction fees, depending on your trading platform. And these fees can add up if you trade often.

Wealthsimple, for its part, doesn’t charge commissions on U.S. trades (you’re welcome!), but, for each transaction with our current Trade Basic accounts, we do charge a 1.5% foreign-exchange fee to convert CAD to USD and vice versa. That’s because Trade Basic accounts aren’t set up to hold USD, only CAD, so we have to convert your money to dollars and back. Buy a share of Google: 1.5% conversion fee. Sell a share of Google: 1.5% conversion fee.

The new Wealthsimple Plus accounts change this whole arrangement. With a Plus account, you’ll only pay a 1.5% foreign-exchange fee once when you convert CAD to USD to fund your account — not each time you trade a U.S. stock. Buy a share of Google: no conversion fee. Sell a share of Google: no conversion fee. We crunched the numbers, and if you trade U.S. stocks more than a few times a month, a Plus account will likely save you money. We plan to add USD account funding at a later date, also, to save you even more money.

You’ll be able to transfer your USD accounts from other brokerages too — if those funds are already in USD, no currency conversion needs to take place, so you won’t have to sell your positions to switch them over to us. Institutions usually charge an administrative fee to transfer your account, but we’ll reimburse that for you if you’re bringing in more than $5,000 worth of investments.

Can’t I just use journalling or Norbert’s Gambit to bypass currency conversion fees?

OK, for those who aren’t financial nerds who are already familiar with this one, Norbert’s Gambit is a technique that uses shares listed on both Canadian AND U.S. exchanges to avoid fees. Right now, that’s not something Wealthsimple Trade supports — but we’re hoping to add more features in the future.

So why is Wealthsimple doing all this? Doesn’t it want all those 1.5% foreign-exchange fees?

Listen, this may sound cheesy, but we want to build long-lasting relationships with our clients, and we figure not charging frequent traders every time they trade is a good way to do that. And we want to make sure our services are super accessible — democratizing wealth is our entire M.O. — which is why we’re charging such a nominal fee for Plus.

Do you lose all the features of Trade Basic?

Nope. You get everything you used to…

Wait, what if I already have a Premium subscription? How does that fit in with Plus?

The short answer is that it doesn’t. We’ll be phasing out Premium by March 2022 in favour of Plus, because we think the latter is a far superior product with tons more features. So RIP Premium. But, honestly, we’re confident you’ll love Plus tons more and that it’ll help us expand access to trading and help more Canadians build wealth.

So what do I do?

Here’s what marketing people refer to as the call-to-action: to sign up for Plus, open the Wealthsimple Trade app or sign in to our website and navigate to your profile settings. There, tap on more and tap on subscription and you’ll see the option to upgrade to Plus from your Basic account (or switch over if you’re a Premium subscriber). And, of course, if you don’t already have a Wealthsimple Trade account, sign up! It’s super easy. (We put “simple” in the name of our company for a reason).