Fees and taxes related to transfers from Wealthsimple

Will my fees change when switching from Wealthsimple to Betterment?

Yes.  For investing, Betterment charges customers an annualized fee of 0.25% of assets under management, while Wealthsimple charges 0.40% to 0.50% depending on the customer’s account balance.  Note that customers with account balances of at least $100,000 will be able to opt into a higher-fee tier (0.40%) that includes unlimited access to Betterment’s team of CFP® professionals.  More information on Betterment’s fees can be found here.

Will I be charged any fees for transferring my account to Betterment?

No, there will be no fees to transfer your account from Wealthsimple to Betterment.

Are there tax implications for transferring my account?

Potentially, although Betterment will help to ensure that any tax implications are minimized.  Your account assets will be transferred to Betterment in-kind, so there will not be any tax implications associated with the account transfer itself.

Once at Betterment, Wealthsimple customers will be given the option of holding their existing Wealthsimple portfolios at Betterment for a period of 12 months.  We anticipate that all accounts may be transitioned to a Betterment portfolio after this initial 12-month period. Any transition to a different portfolio will entail selling certain securities in your portfolio and purchasing others with the proceeds, which may result in the realization of taxable gains. Such gains may be short-term capital gains depending on activity in your account. Additionally, once your account has been transferred to Betterment, if there are positions in your account which are not associated with the existing WealthSimple portfolio, our system will liquidate them and you may experience a tax impact for potential gains realized.

Betterment will provide discretionary investment advisory services in connection with the management of your account. This will involve, among other things, account rebalancing, which may result in the realization of taxable gains in your account due to the purchase and sale of securities. Your account may be automatically rebalanced upon arrival at Betterment in the event that your portfolio has drifted more than 3% from its target allocation.

Betterment strongly recommends that Wealthsimple customers who are concerned about the tax implications of transferring their accounts seek the advice of a qualified tax professional.