We do our best to be as transparent about fees as possible and use technology where we can to keep costs low for both you and your employees.
Starting January 10, 2022 there will be updates made to management expense ratio (MER) fees and foreign currency exchange fees (FX). Our management fee for employee portfolios remains unchanged.
Employee fee breakdown:
- MER fee (approximately 0.14%) – REDUCED
MER fees are charged by fund providers (Vanguard, BMO, etc.) for the work they do to maintain the asset balance within the exchange traded funds (ETFs) in your portfolio. The fee is not charged by Wealthsimple but is incorporated into the price of each ETF itself. As our business has grown, we have more power to negotiate lower fees with our partners and, when successful, we share the benefit of such rebates with you and your employees by adjusting the price of the applicable ETFs. We are happy to announce a reduction to MER fees on many assets by 0.01% (or 1 basis point (bps)) if any of your employee accounts are invested in one of Wealthsimple’s Standard portfolios (Growth, Balanced or Conservative).
The fees remain unchanged for our SRI (approximately 0.23%) and Halal (approximately 0.5%) portfolios.
Employees with a Standard portfolio may see a decrease in the MER fees charged to their GRSP account annually.
- FX fee (0.4% for withdrawals and deposits into US ETFs) – INCREASED
Our globally diversified portfolios are comprised of ETFs priced in both Canadian and US dollars. This means sometimes we need to buy or sell US dollars to trade US ETFs in your account. Historically, Canadian ShareOwner Investments Inc., an affiliate of Wealthsimple’s and the custodian of your accounts, charged a 0.2% (or 20 bps) currency conversion fee on the corporate exchange rate. On January 10, 2022 they're increasing the currency conversion fees to 0.4% (or 40 bps)
NOTE: 0.4% is still well below the industry average which is 1% to 1.5% (or 100 to 150 bps) for currency conversions. The increased FX fee will cost an additional 0.05% (or 5 bps) for each dollar deposited in our standard portfolios, 0.04% (or 4bps) for Halal portfolios and 0.005% (0.5 bps) for Socially Responsible portfolios. The fees are different for our various portfolios because the proportion of assets traded on US exchanges are different.
While these numbers are small, their impact for employees investing long-term is even smaller. Over a longer time horizon of 10+ years, the FX fee increase will cost 0.01% or less per year for most of our investors.
- Portfolio management fee (0.4–0.5% of your assets under management) – NO CHANGE
There is no change to your employees’ overall Wealthsimple management fee for a personalized portfolio tailored to their financial goals, which includes services like automatic rebalancing, dividend reinvesting and most importantly, full access to a team of qualified and friendly Portfolio Managers whenever they need it.
Employees will continue to enjoy low management fees of 0.4% for GRSP accounts over $100,000 and 0.5% for those under.
Please note these updates are only for clients of Wealthsimple Invest. These changes will be reflected in a new client agreement, which your employees can find in the My Documents section on desktop or mobile.
There have been no changes to employer fees at this time.
We hope this helps you answer any high-level questions your employees may come to you about. If you have any questions about these changes, feel free to reach out to firstname.lastname@example.org. If your employees need further information about their accounts and what these changes will mean for them, feel free to direct them to the main help centre where they can contact support.