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Is Wealthsimple Safe & Legit In 2022? (Quick Answer!)

Jamey Muller
Updated: June 6, 2022
5 min read

Wealthsimple is an excellent platform for all kinds of investors looking to save money. If you are thinking about signing up for an account but are still apprehensive about its legitimacy, this quick guide is for you.

Here’s if Wealthsimple Is Safe & Legit:

Wealthsimple is a safe and legit broker choice for investors seeking a robo-advisor solution for automated investing. Regulated by the Investment Industry Regulatory Organization of Canada (IIROC), all customer accounts under Wealthsimple are protected by the Canadian Investor Protection Fund.

IIROC is a non-profit national self-regulatory organization that supervises all trading activities on equity and debt marketplaces in Canada.

As an online-only brokerage service, Wealthsimple guarantees to keep your money safe with foolproof methods. 

All account information at Wealthsimple is encrypted. For a hacker to intercept data passing through the brokerage servers, they will encounter the state-of-the-art 256-bit encryption set up to keep your personal and financial information secure.

The two-step verification process also provides another layer of sign-in security to protect your account against thieves.

When you log in using a new device or from a different location, you will be asked to verify your identity through a text or an email sent to the contact information you provided.

The additional verification also sends a notification when someone is trying to log in to your account. You can easily change your passwords before the hacker gets the chance to access your Wealthsimple account.

Moreover, Wealthsimple uses cloud technology as systems backup. This reduces the risk of data loss while providing an extra layer of security.

Since backups occur multiple times per day, guaranteeing that your account information is always up to date and accessible even in case of service disruptions.

If you are a passive investor setting up for long-term financial security, Wealthsimple is a good fit for you.

Is Wealthsimple Safe for Crypto?

Yes. Wealthsimple offers safe and secure trading in several cryptocurrencies through its Wealthsimple Crypto.

You can access it using the Wealthsimple Trade App using both iOS and Android devices. There is no minimum account balance requirement. You can instantly buy and sell cryptocurrencies using fiat currency.

When depositing or withdrawing funds, you will not be charged fees. The same applies when opening or closing your account or securing electronic statements.

Cryptocurrency is generally a volatile investment but if you are well aware of the risks, you are good to invest. It is also an excellent way to diversify your portfolio.

Compared to other securities like stocks, cryptocurrency is not as highly regulated. It does not fall under any investment categories, hence, it is not covered by IIROC and CIPF.

For this reason, investors are not offered protection in the event of cryptocurrency losses.

However, Wealthsimple Crypto has placed several security measures to protect its investors.

The platform works with Gemini Inc., a custodial company that is well-recognized in the industry for its crypto storage and security technology.

When you buy from Wealthsimple Crypto, your purchase is held by Gemini on its cold storage facilities. While there, your assets are disconnected from networks so there is no danger of theft.

Gemini’s insurance policy ensures that you are covered for up to $200 million in aggregate losses in cases of theft, security breaches, or fraudulent employee activity.

Wealthsimple Crypto also has a partnership with Coincover, a top cryptocurrency insurance provider that offers Secure Key Material Storage and Recovery Deposit Protection Guarantee for its clients.

Is Wealthsimple Insured?

Yes. Wealthsimple is insured by the CIPF. This means that if the company goes bankrupt, your investments are covered for up to $1 million.

Except for Wealthsimple Crypto, all other Wealthsimple accounts including Wealthsimple Trade, Invest, and Cash are protected by the CIPF.

Individual investors are insured $1 million for all general and registered retirement accounts. All registered education savings plans are also covered.

In 2021, Wealthsimple Cash accounts became eligible for protection from the Canada Deposit Insurance Corporation (CDIC). 

CDIC is a federal Crown Corporation that provides deposit insurance to clients of commercial banks and savings institutions.

Each beneficiary is automatically entitled to a $100,000 insurance in case of the member institution’s failure. 

Is It Safe to Link Your Bank Account to Wealthsimple?

Yes, linking your bank account to Wealthsimple is definitely safe. The brokerage has several safeguards in place to ascertain that your account information remains protected.

You will need to log in to your online banking via your financial institution to be able to link your bank account to Wealthsimple.

Whenever you log in, Wealthsimple ensures that your bank login credentials are never stored on its servers.

The brokerage has partnered with Plaid, a financial services company trusted by over 4,500 companies worldwide.

Plaid’s technology ensures that Wealthsimple account users can securely link their bank accounts without fear of a breach.

It uses several encryption safeguards that go through arduous independent security testing, allowing for different applications and services to safely connect with your bank account.

Is It Safe to Give Wealthsimple Your SIN Number?

Yes. It is completely safe to provide your SIN number to Wealthsimple. 

SIN is required to report to the Canada Revenue Agency (CRA). All investment platforms in Canada ask for the SIN so the CRA can track accounts for taxes.

Tax information conveyed to the CRA includes any capital gains earned, dividends received, and transfers made in tax-free savings and registered retirement savings plan accounts.

During transfer between your device and the Wealthsimple server, your SIN number is encrypted by a 256-bit SSL/TLS certificate. Moreover, Wealthsimple uses cloud-based technology so your data will be protected.

With this encryption level, even employees at Wealthsimple will not be able to access your account and see your SIN number.

Aside from the encryption certificate and cloud-based technology, Wealthsimple has also taken further steps to keep your account secured.

By employing a full security team whose primary goal is to protect your data, you do not have to worry about security breaches.

If this is not enough to convince you, you should note that Wealthsimple is primarily owned by Power Corporation, a trustworthy company that provides financial services in North America, Europe, and Asia.

Sources:

Investopedia

Written by
Jamey Muller
I'm the head-writer @ Knowledge Eager (or, in plain English, I'm the guy writing the majority of the content here). Addicted to the stock market, football, sushi and tacos.
Have any questions? Write us a message.
Jamey Muller
I'm the head-writer @ Knowledge Eager (or, in plain English, I'm the guy writing the majority of the content here). Addicted to the stock market, football, sushi and tacos.