Millennials have taken ownership of investment portfolios that’s they’re raging among automated savings and investing schemes with lower investment fees. Finance and technology or ‘fin-tech’ companies such as Moka, Wealthsimple, Acorns, Betterment, and the likes have made investing in an investment portfolio relatively straightforward nowadays. Daily investors are given access to diversified and personalized portfolios, some starting as little as $5. This modern approach to saving your spare change has shown interest to many. The premise is that making a big difference over time is now possible even with small amounts of money when dealing with compound interest.
Insert micro-investing apps. These tools round up purchases, then take spare change and chuck it into low-cost ETF portfolios. Although they may come with a nominal monthly fee, they allow you to start investing more funds, that is, through weekly deposits or multipliers, and all, if that’s what you want. With the number of Canadians having nothing saved significantly rising, dollar amounts will never be too small in starting planning for your retirement. As well, using automatic savings and investing helps lessen the hassle and effort of manually moving money from your chequing account toward your investment. And, using loose change and a bit for saving, you may not even notice the wealth you are now beginning to establish for the future.
App Contender #1: MOKA
What It Is
Formerly under Mylo’s moniker, Moka is the rebranded Canadian fin-tech and an app-based company that helps users automatically save, invest, and meet their financial goals. In 2017, Phil Barrar founded the company and was featured on the show Dragon’s Den.
How It Works
Once you’re done signing up for Moka, you can already connect your bank account to this newly created app account. Then, it rounds up your purchases to the nearest dollar, with the spare change automatically invested in a portfolio that suits your preference, either TFSA, RRSP, or non-registered accounts.
Aside from saving or investing your spare change, you can also make one-time deposits or even apply for multipliers to help you reach all your money goals faster. Portfolios in Moka are designed through low-cost ETFs and use the Modern Portfolio Theory as its model.
Moka subscriptions cost $3.99 every month. Regardless of how much your monthly investment is, this fee remains the same for everyone. But this factor means that with enormous investment, the lower impact fees will have on your overall returns. Aside from the monthly payment of $3.99, management fees are paid directly to the ETF providers of the individual funds in your portfolio. These management fees differ depending on the provider. It ranges from 0.05% to 0.35% for regular portfolios, while between 0.20% and 0.60% for SRI or socially responsible investing portfolios.
The funds you invest with Moka are safe. They are insured by CIPF, or the Canadian Investor Protection Fund, for up to $1 million.
Deleting or closing your account is as simple as sending an email. Slide an email to Moka’s inbox at email@example.com, and they will assist you in your wish to close your account.
Read our Moka App Review here.
App Contender #2: WEALTHSIMPLE
What It Is
Since it was launched by Michael Kitchen in Canada back in 2014, Wealthsimple has become the country’s largest Robo-advisor and expanded operations in neighbouring countries – the United States and the United Kingdom.
Backed by some financial giants, Wealthsimple found its footing with the help of foundations, including the Power Financial Group, manager of $1.4 trillion worth of assets under its supervision. And as a Robo-advisor, it has been popularly referred to as a digital wealth management company, being the recipient of numerous fin-tech industry awards.
How It Works
In general, Robo-advisors make investing easier for everyone because everything is simplified through the help of ETFs, which are low-cost investing strategies that are passive. In addition, Robo-advisors such as Wealthsimple aim to generate market returns structured from the Nobel-Prize winning breakthrough.
Signing up for a Wealthsimple account allows you to get personalized, hands-off portfolios rebalanced automatically. Additionally, the company also gives you financial pieces of advice from experts. Then, based on certain factors like your tolerance to risks and objectives in investment, creating your personalized portfolio becomes balanced, conservative, or growth-oriented, all significantly based on your credentials.
Wealthsimple provides a very versatile app, receiving outstanding reviews from its enthusiasts. Invest using registered accounts such as TFSA, RRSP, RESP, RRIF, LIRA, and some non-registered ones.
Investments through Robo-advisors have two (2) main attractions – convenience and lower fees. Wealthsimple follows this format through their main pricing tiers:
- The Wealthsimple Basic has a management fee of a 0.50% annual flat rate on portfolios between $0 and $100,000.
- The Wealthsimple Black has a 0.4% flat management annual fee on portfolios having assets between $100K and $500K.
- The Wealthsimple Generation also has a flat management fee of 0.4% per year, but for portfolios with assets over $500K and some perks, members of this tier can enjoy.
In addition, MERs are also directly charged on the ETFs that make up your portfolio, approximately 0.20% of the total. So unlike fees assessed by traditional mutual funds, which are 1.98% on average, Robo-advisors like Wealthsimple cost much less!
This Wealthsimple app feature gives users the freedom to invest their spare change and directly be used with their investing accounts with the company. You can quickly turn on this feature, linking your debit and credit card, allowing you to track purchases and then round them up simultaneously. Aside from the autopilot investing component, Wealthsimple also offers Wealthsimple Trade. This feature is a service that lets you trade stock, buying and selling, and also ETFs using only your phone like you’re an expert online brokerage. It is a unique feature because it has $0 commissions with no account minimum.
Funds that you invest with Wealthsimple are held by CIPF-member Canadian ShareOwner Investment Inc., protecting your investments for up to $1 million.
Read our Wealthsimple Canada Review here.
Final Comparison Battle: Moka VS Wealthsimple
Moka and Wealthsimple are two of Canada’s leading financial technology companies. Since both pioneered and simplified everyday investing for their users, there are similarities and differences in some ways or another. Let’s go ahead and point out some of the most common ones.
1. Product’s Core Design
Moka uses the basic concept of investing your spare change. So, when you buy a cup of coffee for $2.75, your purchase gets rounded up, with the 25 cents invested automatically into your portfolio. Whenever you find difficulty putting any amount of money towards your eventual savings, Moka is an option that may work for you since, likely, the monthly fee of $1 won’t even matter how and how much you are investing.
Meanwhile, Wealthsimple is considered a ‘robot-advisor’ that invests small amounts towards millions of dollars. This company provides accessible portfolio management available to everyone, whatever investor type you may be, average or affluent.
Due to Canadian mutual funds being too expensive, one great way of avoiding payment of ridiculous charges from mutual funds is purchasing index funds, ETFs, or both through a brokerage. Afterward, allocate these into your portfolio to help meet your daily needs.
With that said, not all of us want to take on the responsibility of portfolio management and require rebalancing. Robo-advisors such as Wealthsimple can do all the work automatically and save on fees simultaneously. They also offer roundup bonus features similar to how Moka works.
2. Account Types and Availability
Moka is available only to Canadians only, while Wealthsimple is available to Canadians and in the U.S. and the U.K.
When it comes to account types, Moka offers one non-registered investment account and two registered ones – TFSA and RRSP. Moka also gives cashback every time you shop, ask for financial coaching, and many more features you can get through its premium Moka 360 service. All of these factors, aside from the investing you get.
On the other hand, Wealthsimple offers more variety of account types like TFSA, RRSP, RESP, RRIF, and LIRA for residents of Canada; standard IRA, Roth IRA, SEP-IRA, and non-registered accounts for those in the U.S.; and accounts such as ISA, JISA, and personal investment types for people in the U.K. It also provides high-interest savings, Halal investing, and platforms for wealth management, especially for businesses and investment advisors.
Both Moka and Wealthsimple open up investment opportunities depending on your values from socially responsible portfolio investments.
By design, Moka and Wealthsimple utilize mobile apps. Although Wealthsimple lets you also access your account on a desktop computer through their website, Moka is, however, entirely based on the mobile app.
4. Safety and Security
All the funds invested with Wealthsimple are CIPF-insured for up to $1 million. Both fin-tech companies also use secured encryption, the same as what central banks operate in protecting your private information.
5. Referrals and Promos
Both Moka and Wealthsimple give rewards for inviting friends and family to get on board and have their accounts. Wealthsimple manages up to $10,000 worth of money saved and invested for free for the next 12 months every time you refer a friend. Moka has $5 per referral.
Which is better: Wealthsimple or Moka?
Using both apps from these two fin-tech companies, Moka and Wealthsimple, can give you a worthwhile experience. Moka works best for passively saving small and short-term yet stable financial goals like for your next vacation or on your eventual ‘fun fund.’ Over time, these little savings of yours get added up. However, for those planning for bigger money goals and tax-free account investing and saving such as retirement (for RRSP), home down payment and wedding (for TFSA), or kids’ college education (for RESP), then Wealthsimple is the best option for you.
Learn from today’s article and be amazed how these two mobile apps can help you manage your account and save up for the future, even with spare change.
Acorns Alternatives for Canadians
Wealthfront Alternatives Canada
Mylo and Wealthsimple are both Canadian fintech companies that have only just begun investing. Wealthsimple Invest is an automatic investment service that manages your investments for you, including your RRSP and TFSA, using personalized portfolios and low-cost exchange-traded funds. It is a pure trading platform in Canada and does not charge commissions for buying and selling shares or ETFs.
Wealthsimple has been in business since 2014 and has more than $3 billion in assets under management. Wealthsimple enables you to invest your money via Wealthsimple Invest in a fully managed portfolio or put it into a high-interest savings product with Wealthsimple Save.
Like Moka, Wealthsimple Invest offers the technology to round off your purchases and save the difference. The Micro Investing app completes your purchase by taking spare cash and throwing it into a portfolio of low-cost ETFs. The app charges a small fee per month and allows you to invest more money.
Moka (formerly Mylo) VS WealthSimple
With Moka, you can set up a savings or investment account for various reasons. For example, a Moka app can be helpful if you have trouble investing or saving large sums of money.
By investing your spare change, you can achieve your financial goals without feeling the pain in your wallet. The Moka app was initially called Mylo (Canadian for “spare change app”) in 2017. It has since been renamed Moka, and it is now easier than ever to invest the small change you have saved and get used to saving. Read our Moka review here.
Moka was a revolutionary app and the first of its kind in Canada when it was launched, but Mylo does not automate your savings with Moka in a way you’ll notice. Like Acorns in the US, Moka is linked to your primary debit and credit cards and automatically completes your purchases to the next dollar. The Moka app is a viable option for beginners who want to build good savings habits and learn how to invest, but it comes with a high monthly lump sum of $3 per month, and it can end up costing more than it’s worth if you don’t have enough money in your account.
For most Canadians, Moka offers three main accounts that do not need to be registered: TSFA, RRSP, and RRSP Moka lacks sort RESPs, spouse RRSPs, RRIFs and more Wealthsimple offers. The flat fee of $3 a month is good value if you have much invested in your Moka App account. Ease of use 4 / 5 The Moka app is easy to use and set up, and it is also easy to track your investment statistics.
App Canada RRSP (unregistered personal account) Lowest fee: As far as I know, there is no administration fee, and this is the first in Canada to offer commission-free. Wealthsimple creates accounts that allow you to build self-managed TFSA, RRSP, TFSA ETFs (available in WSRI) without commissions: broker account that will enable you to build self-managed portfolios by investing in the stock market as an active trader ($0.40-$ $0.50) Best Canadian broker: Wealthsimple non-traded WS account ($0.40). I reached out to Wealthsimple through a trade-related investment account for the BFSA.
Your portfolio manager invests your money in an account that meets your needs. In addition to saving and investing small change, you can also make one-time deposits and use a multiplier to achieve your money goals. Once your purchases are rounded to the nearest dollar, you can put the saving in a portfolio in a TFSA, RRSP or unregistered account that matches your preferences.
You pay a monthly flat fee that is a percentage of your total capital, and it offers more value; the more you use it, the more money you accumulate in your portfolio. Fees are the same regardless of how much you invest each month, so the more significant your investments, the less impact the fees on your overall return. According to Moka, withdrawals the next day are additional costs if you have a TFSA or RRSP (unregistered investment account).
Moka uses EFT (electronic money transfer) to process your withdrawal request within one business day. The technology rounds out your purchases and saves the difference by retaining a total ongoing roundup amount, deducting it once a week from subscribers “bank accounts and then depositing it into subscribers” investment accounts. In addition, both companies offer fee-free transfers, automatic deposit accounts, dividend rebalancing, and reinvestment and portfolio reviews without human support.
As a leading fintech provider, it is no surprise that Wealthsimple has an outstanding investment app that is super slim, easy to use and iOS and Android compatible. In addition, Wealthsimple Invest offers a halal investment option and a full range of unregistered and registered accounts, including spouses, RRSPs, joint escrow accounts and corporate accounts. Moka does not have a Halal Invest option but offers RSSPs and TFSA registered accounts.
Today, Wealthsimple manages more than $5 billion in assets and operates in the United States and Britain. They also have access to unique wealth management products such as Halal Investing, which offers investments compliant with Islamic law, high-interest savings accounts and responsible portfolios.
All in all, Wealthsimple Invest is our first choice for the best investment app in Canada. An exceptional investment app that is super slim and easy to use (iOS and Android compatible), creates colourful charts, provides insights, and tracks your goals and progress. It and its Robo-advisor service are very similar to Moka, so we’ll see how they fare against the competition.
You can access your account details, view account history and use the app to withdraw funds from your Questrade account or transfer money between accounts. Questrade offers a variety of account types, including RRSPs, TFsAs, unregistered RESPs, Liras, RIFs, margin and corporate accounts, powerful research tools and real-time quotes.
Tracking account growth takes a bit of work, but Moka sends out monthly statements so you can check your investment growth, and it’s nice to see your current growth moving in the direction of your goals over time.
Now that you’ve seen the potential of the Moka app let’s take a look at its alternatives in the final phase of our Mylo review. Moka’s idea is to make things easy and build good habits, but if you’re a DIY investor, Moka may not be for you. So I think it makes sense that you invest in Moka after this review and focus on simple things like opening an account.
Now that we’ve talked about the Moka app and the top competitors and alternatives, we’ll talk about Wealthsimple. Wealthsimple is one of Canada’s leading Robo-advisers, helping Canadians save money and invest in the automation and features they need. Both Moka and Wealthsimple are secure Sris that offer additional features for investing in ETFs, and both also offer bonuses.