In this article, I will be comparing Wealthsimple vs. Mylo – Two of the best fin-tech Investment companies in Canada.
Let me unveil everything about them including detailed feature review, pros and cons and final verdict. Let’s get started.
What Are Mylo And WealthSimple – Quick Introduction
Let me keep it simple – Mylo and Wealthsimple are two of the best automated investments in Canada.
Nowadays automated savings and investments with lower fees are slowly increasing media presence and popularity.
Fin-tech companies like Mylo, Wealthsimple, Acorns, Betterment, and others have simplified investing and provide everyday investors with better access to diversified and personalized portfolios starting with as little as $5.
The concept of investing your spare change is really interesting. The best part is you don’t have to do anything, the system does it all for you.
You just have to link your bank accounts to the individual apps – Mylo and wealthsimple in this case.
Mylo: Case Study
When you buy a coffee you’ll pay 1.30 or 1.50. These auto investment apps will round up to the nearest dollar amount, in this case $2. So, the system automatically adds $0.70 to your investment portfolio.
Again, that’s the basic plan I’m talking about – rounding up your purchases. You have other advanced levels where you can increase the round ups and also bump up money every now and then.
Now just imagine, this keeps happening with all transactions through out the day on all your bank accounts linked – you can link more than one bank account and multiple accounts within a single bank account – debit, credit cards etc.
You’ll never realize how soon your money will grow with the compound interest you earn through investments.
Oh by the way did I forget to tell you – Your money is pretty much in safe hands with an investment portfolio manager. Also, another point to mention here is – your money is invested into low cost ETFs and is managed actively.
The best part of doing this – you can withdraw money from the apps anytime you’ll need, there’s no minimum threshold or something like that.
Now let’s talk about Mylo and WealthSimple individually.
Mylo is a fin-tech company and app based in Canada that allows users to automatically save, invest, and meet their financial goals. It was founded in 2017 by Phil Barrar and featured on the Dragon’s Den show.
How Mylo Works
After you sign up for the Mylo app, you can connect your bank account. Your purchases are rounded up to the nearest dollar and the spare change is invested in a portfolio that suits your preferences. In addition to saving/investing spare change, you can make one-time deposits or apply a multiplier in order to reach your money goals faster.
Mylo portfolios are built using low-cost ETFs and modelled after the Modern Portfolio Theory.
The basic Mylo subscription has a $1 per month flat fee. This fee is irrespective of how much you invest every month, meaning that the bigger your investment, the lower the impact of fees on your overall returns.
In addition to the $1 price tag, individual funds in your portfolio pay management fees directly to the ETF providers. Depending on the ETF, this cost ranges from 0.05% to0.35% for regular portfolios and between 0.20% and 0.60% for socially responsible investing (SRI) portfolios.
FREE Bonus Offer From Mylo – Here’s Bonus $5 Free to get started:
Mylo offers a premium service for those who want to invest using registered accounts such as the TFSA or RRSP. This service comes with a $3 per month flat fee and gives users access to:
Invest in tax-free registered accounts – TFSA and RRSP
Socially responsible investing (SRI)
Cash back when you spend at your favourite stores
Free next-day withdrawals using Interac e-Transfer
How Safe is Investing In Mylo
The funds you invest with Mylo are insured by the Canadian Investor Protection Fund (CIPF) up to $1 million.
How To Cancel Mylo
If you want to delete or close your account, send them an email at firstname.lastname@example.org and they will assist you in closing your account.
Mylo Promo Code
When you sign up for Mylo using a referral link or promo code from a friend, you receive a $5 bonus after conducting at least one roundup transfer. To qualify for the $5 welcome bonus, you can simply open an account using this promo link – no code required!
Wealthsimple is Canada’s largest robo-advisor. The company was launched in Canada in 2014 by Michael Katchen and has since expanded its operations to the United States and the United Kingdom. They are backed by several financial giants, including the Power Financial Group which manages $1.4 trillion in assets under management.
As a robo-advisor, Wealthsimple is also popularly referred to as a digital wealth management company. They have been recipients of several awards in the fin-tech industry.
How Wealthsimple Works
Wealthsimple is Canada’s largest and most popular digital wealth manager (also known as Robo-Advisors). They currently offer money management services to tens of thousands of clients in Canada, U.S., and the U.K. at a lower cost than available through traditional money managers.
Robo-advisors simplify investing for everyone. Using low-cost ETFs and passive investing strategies, they aim to generate market returns based on Nobel-Prize winning research.
When you sign -up for a Wealthsimple account ($10,000 Managed FREE for 1 year), you get a personalized portfolio that is hands-off and automatically re-balanced. They also provide you with expert financial advice. Depending on your risk tolerance and investment objectives, your personalized portfolio may be conservative, balanced, or growth oriented.
The Wealthsimple app is very versatile and has received great reviews. You can invest using registered (TFSA, RRSP, RESP, RRIF, LIRA) and non-registered accounts.
Two main attractions for investing with robo-advisors are convenience and lower fees. Wealthsimple has two main pricing tiers:
Wealthsimple Basic: management fee is a flat 0.50% per year on a portfolio between $0 and $100,000.
Wealthsimple Black: a flat management fee of 0.4% per year on a portfolio with assets between $100K and $500K
Wealthsimple Generation: a flat management fee of 0.4% per year on a portfolio with assets exceeding $500K plus some other perks
MERs are also charged directly on the ETFs making up your portfolio and is approximately 0.20%.
When compared to fees charged by traditional mutual funds (2.23% average), robo-advisors cost much less!
Wealthsimple Investing Pattern
This feature helps you to invest your spare change and can be used along with your Wealthsimple investing account. Simply turn on the feature and link your credit and debit cards so it can track your purchases and round them up.
In addition to investing on auto-pilot, Wealthsimple also offers the following services:
Wealthsimple Trade: This is a stock-trading service that lets you buy and sell stocks and ETFs using your phone like you would on an online brokerage. It is unique because it has $0 commissions and there is no account minimum. Wealthsimple Trade currently has a waiting list you can jump on to get early access.
Wealthsimple Smart Savings: This is their high-interest savings account. It allows unlimited transactions and currently pays a 2% interest rate.
Is Wealthsimple Safe for your Investments?
The funds you invest with Wealthsimple are held by Canadian ShareOwner Investment Inc. which is a member of CIPF. Your investments are protected up to $1 million.
Mylo Vs Wealthsimple: Pros and Cons
These two Canadian financial technology companies are similar in some ways and different in others. Overall, they are both pioneers in simplifying investing for everyday investors.
Core Product Offering
Mylo’s basic concept is investing your spare change. For example, when you buy a $2.75 cup of coffee, your purchase is rounded up and 25 cents is invested in your portfolio. If you find it difficult to put any money towards your savings, this option may work for you as you will likely not even feel the impact of the $1 monthly fee on your pocket.
Wealthsimple is a robo-advisor you can use to invest small funds to millions of dollars. They bring portfolio management that traditionally was only available to affluent investors and has made it accessible to everyone.
Mutual funds are expensive in Canada. One way to avoid paying the ridiculous fees charged by mutual funds is to purchase index funds and/or ETFs via a brokerage and allocate them in your portfolio to meet your needs. However, not everyone wants to take on the responsibility of managing their portfolio and rebalance it as required.
A robo-advisor like Wealthsimple does all the work automatically while saving you on fees. Wealthsimple also offers a roundup bonus feature which works just like Mylo.
Wealthsimple: Types of Accounts
Mylo is currently available to Canadians only. Wealthsimple is available in Canada, the U.S., and the U.K.
Mylo offers a non-registered investment account and two registered accounts – TFSA and RRSP. Wealthsimple offers more accounts including TFSA, RRSP, RESP, RRIF, and LIRA in Canada; traditional IRA, Roth IRA, SEP IRA, and non-registered accounts in the United States; and ISA, JISA, and personal investment accounts in the U.K. They also offer high-interest savings, Halal investing, and wealth management platforms for businesses and investment advisors.
Both Mylo and Wealthsimple provide opportunities to invest according to your values through their socially responsible investing portfolios.
Wealthsimple: 9 Account Types
I’m listing the 9 account types that can be opened at wealthsimple for your reference.
Here’s the complete list:
1. RRSP: A registered retirement savings plan (RRSP) is an account designed to help Canadians save for retirement. While the investments are held in your RRSP, you won’t have to pay tax on any interest, dividends, or capital gains you earn. There is a limited amount you can contribute to an RRSP every year.
2. Spousal RRSP: A spousal registered retirement savings plan (Spousal RRSP) is often used to lighten the tax load for couples with big income disparity as it avoids a higher-income earner from having a large pile of retirement savings in his RRSP while the lower-income earner has a small pile. The limit to the amount you can contribute to an RRSP remains the same even if you have an RRSP and a Spousal RRSP to contribute to!
3. TFSA: A tax-free savings account (TFSA) encourages long-term saving by providing tax benefits: any income earned in a TFSA is tax-free, even when you withdraw it. There’s a limit to how much you can contribute each year.
4. Non-Registered Account: A personal (or joint) account in which you can contribute as much, or as little, as you like. All the interest, dividends, and capital gains earned in a non-registered account will have tax considerations. You would most likely have this type of account once you’ve maximized the contribution room in your RRSP and TFSA.
5. Smart Savings: A savings account with interest that compounds monthly.
6. RESP: A Registered Education Savings Plan can be used to save for a child’s education. You can contribute a lifetime maximum of $50,000 per child, and the government will match a certain amount.
7. RRIF: Your RRSP must be converted into a Registered Retirement Income Fund (RRIF) by the end of the year you turn 71.
8. LIRA: You would have a Locked In Retirement Account (LIRA) if you have a pension from a former employer but are not retired. You can’t contribute to a LIRA, but you do have control over the investments in your account.
9. Corporate: A corporate investment is opened under your business’s name and, much like a personal account, allows your business to invest money so it can grow.
Individual Comparison: Mylo vs Wealthsimple
Wealthsimple and Mylo have mobile apps. While you can also access your Wealthsimple account on a desktop through their website, Mylo is completely mobile-app based.
The funds you invest with Mylo and Wealthsimple is insured by CIPF up to $1 million. Both companies also use encryption similar to what your bank uses to protect your private information.
Both companies reward you for inviting friends and family on board.
Wealthsimple will manage up to $10,000 of your money free for 12 months for each friend that you refer. Mylo pays you $5 per referral.
I use both Mylo and Wealthsimple and believe the services they offer are worthwhile. Mylo is great for passively saving for small, short-term, financial goals such as a vacation or your ‘fun fund.’ Your little savings add up.
Wealthsimple is great for planning towards bigger money goals and investing/saving in your tax-free accounts – retirement (RRSP), home down payment and wedding (TFSA), kids college education (RESP).
Please let me know your thoughts and comments below.
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Hey, I’m Sagar from Toronto, Canada.
I am a self-taught, motivated Canadian Personal Finance Blogger who loves writing articles about Savings, Investing, Stocks & ETF reviews, Side Hustles, Frugal Living, Credit Cards and Retirement Planning. Husband. Father. Software Developer. Web Designer. Hiking Enthusiast.