Latest news with #Wealthsimple
Globe and Mail
2 days ago
- Business
- Globe and Mail
Wealthsimple asks Ottawa to review rising bank transfer fees
Canadian online bank and brokerage Wealthsimple asked Ottawa this week to review rising bank exit fees, in an annual consultation for the government's budget, the company said. Exit fees for Canadians moving their Registered Retirement Savings Plan or Tax-Free Savings Account at major Canadian banks have risen to as much as $150 (US$108.99) per savings account from as low as zero to $75 in the early 2010s. Canada's six big banks, including Royal Bank of Canada RY-T and TD Bank TD-T, are some of the best capitalized financial institutions among the G7 countries and control over 90 per cent of the banking sector. Wealthsimple and other digital banks are attracting young clients looking to spend less on banking fees and increase their savings. The bank offers to reimburse new clients for some of the cost of moving their funds from other banks. 'If the government were to take action, it would make it easier for clients to overcome that friction,' Jessica Oliver, Wealthsimple's head of government and regulatory relations, said in an interview on Wednesday. In its submission for the budget consultation on Tuesday, Wealthsimple asked the Financial Consumer Agency of Canada to review practices related to transfers between banks and government to amend the Income Tax Act and related regulations to contain exit and transfer fees on registered accounts. FCAC said it cannot comment on pre-budget consultations. The parliamentary finance committee said the brief has not yet been distributed to members for review. Wealthsimple said its clients have been charged nearly $30-million in exit fees to move their savings to its platform. 'There is no reason why financial institutions should be permitted to levy high, hidden exit fees on the rapidly growing number of registered plans,' privately-held Wealthsimple said in its submission. The Canadian Bankers Association, a lobby group representing the country's big banks, said in a statement that banks are required to clearly disclose any fees. Analysts say the success of challenger banks such as Wealthsimple and EQ Bank could squeeze the profitability of big banks and require them to re-evaluate fee structures.
CTV News
2 days ago
- Business
- CTV News
Wealthsimple asks Canada to review rising bank transfer fees
An app screenshot for Wealthsimple is seen on a smartphone in a photo illustration made in Toronto, Monday, June 17, 2024. THE CANADIAN PRESS/Giordano Ciampini. Canadian online bank and brokerage Wealthsimple asked Ottawa this week to review rising bank exit fees, in an annual consultation for the government's budget, the company said. Exit fees for Canadians moving their Registered Retirement Savings Plan or Tax-Free Savings Account at major Canadian banks have risen to as much as $150 (US$108.99) per savings account from as low as zero to $75 in the early 2010s. Canada's six big banks, including Royal Bank of Canada and TD Bank, are some of the best capitalized financial institutions among the G7 countries and control over 90 per cent of the banking sector. Wealthsimple and other digital banks are attracting young clients looking to spend less on banking fees and increase their savings. The bank offers to reimburse new clients for some of the cost of moving their funds from other banks. 'If the government were to take action, it would make it easier for clients to overcome that friction,' Jessica Oliver, Wealthsimple's head of government and regulatory relations, said in an interview on Wednesday. In its submission for the budget consultation on Tuesday, Wealthsimple asked the Financial Consumer Agency of Canada to review practices related to transfers between banks and government to amend the Income Tax Act and related regulations to contain exit and transfer fees on registered accounts. FCAC said it cannot comment on pre-budget consultations. The parliamentary finance committee said the brief has not yet been distributed to members for review. Wealthsimple said its clients have been charged nearly $30 million in exit fees to move their savings to its platform. 'There is no reason why financial institutions should be permitted to levy high, hidden exit fees on the rapidly growing number of registered plans,' privately-held Wealthsimple said in its submission. The Canadian Bankers Association, a lobby group representing the country's big banks, said in a statement that banks are required to clearly disclose any fees. Analysts say the success of challenger banks such as Wealthsimple and EQ Bank could squeeze the profitability of big banks and require them to re-evaluate fee structures. (Reporting by Nivedita Balu in Toronto; Editing by Caroline Stauffer and Rod Nickel)
Yahoo
2 days ago
- Business
- Yahoo
Wealthsimple asks Canada to review rising bank transfer fees
By Nivedita Balu TORONTO (Reuters) -Canadian online bank and brokerage Wealthsimple asked Ottawa this week to review rising bank exit fees, in an annual consultation for the government's budget, the company said. Exit fees for Canadians moving their Registered Retirement Savings Plan or Tax-Free Savings Account at major Canadian banks have risen to as much as C$150 ($108.99) per savings account from as low as zero to C$75 in the early 2010s. Canada's six big banks, including Royal Bank of Canada and TD Bank, are some of the best capitalized financial institutions among the G7 countries and control over 90% of the banking sector. Wealthsimple and other digital banks are attracting young clients looking to spend less on banking fees and increase their savings. The bank offers to reimburse new clients for some of the cost of moving their funds from other banks. "If the government were to take action, it would make it easier for clients to overcome that friction," Jessica Oliver, Wealthsimple's head of government and regulatory relations, said in an interview on Wednesday. In its submission for the budget consultation on Tuesday, Wealthsimple asked the Financial Consumer Agency of Canada to review practices related to transfers between banks and government to amend the Income Tax Act and related regulations to contain exit and transfer fees on registered accounts. FCAC said it cannot comment on pre-budget consultations. The parliamentary finance committee said the brief has not yet been distributed to members for review. Wealthsimple said its clients have been charged nearly C$30 million in exit fees to move their savings to its platform. "There is no reason why financial institutions should be permitted to levy high, hidden exit fees on the rapidly growing number of registered plans," privately-held Wealthsimple said in its submission. The Canadian Bankers Association, a lobby group representing the country's big banks, said in a statement that banks are required to clearly disclose any fees. Analysts say the success of challenger banks such as Wealthsimple and EQ Bank could squeeze the profitability of big banks and require them to re-evaluate fee structures. ($1 = 1.3763 Canadian dollars) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CTV News
4 days ago
- Business
- CTV News
‘Phone stopped working': 2 Ontario women lose more than $50K after clicking link texted to them
Two separate Ontario women were scammed out of more than $50,000 combined after clicking on a link that was texted to them. 'I clicked the link and I updated my information. The next thing I knew, my phone stopped working,' Oshawa resident Christie Seymour told CTV News. In April 2024, Seymour said she received a text message that she needed to update her credit card information. She said she clicked the link and thought she updated it, until her phone was hacked and scammers stole $28,782. Seymour says she tried to call her bank, Wealthsimple, for three days so they could block her account, but couldn't get through. 'I'm completely devastated. That was all the money I had saved and it's just gone and they aren't taking any responsibility for the part of the problem,' said Seymour. Seymour said she received an email from Wealthsimple, which stated: 'Your account appears to have been accessed by an individual whom you've authorized via a phishing scam.' Something similar happened to Christina Petruzzelli. 'Just be careful if you get links to your phone, don't touch anything because it can ruin your life, honestly,' Petruzzelli said. The Mississauga resident told CTV News she also got a link via text saying she had to click on it to decline a purchase. Concerned she was being scammed, Petruzzelli says she followed the instructions, but fraudsters got into her bank account and took $22,046. 'What the link was, it was either to enter those six numbers so I can approve the purchase or decline it, if it's not me,' recounted Petruzzelli. 'So, I clicked decline and I guess that's where the scam was. By me clicking decline, they got access to my account.' Petruzzelli says her bank, the Royal Bank of Canada (RBC), told her that because she had granted the scammers access to her account, she won't be reimbursed. 'I have people that rely on me and you're taking everything I had, and I didn't do it,' Petruzzelli said. An RBC spokesperson could not provide details on Petruzzelli's situation, but they did confirm to CTV News that 'RBC will never ask you to download a remote access application.' RBC also wanted to remind customers that their staff will never ask customers to provide the bank with one-time passcodes sent via text, email or voicemail. They add that the bank will never ask a customer to destroy their debit or credit card, then give it to the bank or third-party in order to secure their accounts. For Seymour's case, a spokesperson for Wealthsimple told CTV News they were 'deeply sorry' to hear what happened. 'Financial loss is incredibly disheartening, especially when it results from a phishing scam by a bad actor,' the statement reads. 'We've spoken to her directly, and as a gesture of goodwill, we have reimbursed the losses she experienced while trying to contact our team. While our Client Account Agreement outlines that we're not responsible for losses stemming from unauthorized access like a SIM swap, we recognize that Christie faced irregular challenges when trying to reach our support team last year, which we've made right.' Seymour said she got all of her money back. 'I feel wonderful. All the worry and dread and regret is gone, and I feel great,' said Seymour. Claudiu Popa, a cybersecurity expert, said everyone should be using dual factor authentication to add another layer of protection and to be cautious of all the links you receive. 'They get more and more targeted, more personalized, and more sophisticated,' said Popa. 'Remember three things: they are counting on you to be surprised, there will be urgency and the need to respond.'
Globe and Mail
08-08-2025
- Business
- Globe and Mail
Trump is opening alternative investments to retirement plans. Should Canadians consider private assets, too?
U.S. President Donald Trump signed an executive order Thursday that aims to allow Americans to invest in assets such as private equity, cryptocurrency, real estate and other alternative investments in their 401(k) retirement plans. The idea is to open up access to investments that are usually only available to institutional investors, so that everyday savers can diversify their portfolios and potentially boost long-term returns. It's also a major victory for industries looking to tap into the hundreds of billions in wealth sitting in retirement accounts. The shift is part of a broader trend: making private markets and other alternative assets more accessible to individual investors. And in Canada, that shift is already under way. Private investments have long played a role in Canadian retirement savings, but mostly through large institutions that invest on others' behalf, such as pension plans, sovereign wealth funds and family offices. However, in recent years, individual investors have increasingly been able to directly access these kinds of assets. While Mr. Trump wants to allow private assets to be available in 401(k) accounts, which are workplace retirement plans, Canadians have the option to invest in certain private investments in self-directed RRSPs. For example, Wealthsimple launched a private-equity fund with LGT Group in 2023 that allows Canadians to use their registered retirement savings plans and tax-free savings accounts to invest in the fund. This gives everyday investors a chance to invest in companies that are not traded on stock markets. What this semi-retired accountant did with $3-million from multiple inheritances Recently, Northleaf Capital Partners and Mackenzie Investments teamed up to launch a private-equity fund available to accredited investors. The fund is registered-plan eligible. But some critics say alternative investments, especially in retirement portfolios, can result in increased risk, higher fees and reduced transparency around people's nest eggs. 'I'd be super careful about getting into private equities,' said Benjamin Felix, chief investment officer and portfolio manager at PWL Capital. In Canada, RRSPs are allowed to hold a wide range of what the Income Tax Act deems 'qualified investments.' These include cash, GICs, bonds, mutual funds, ETFs and publicly traded shares. Certain alternative assets, such as shares of a private corporation, may also be held in a self-directed RRSP as qualified investments, but only if they meet certain conditions. Holding investments in an RRSP that are non-qualified or prohibited can result in tax penalties equal to 50 per cent of the assets and 100 per cent of any income or gains. For example, cryptocurrencies are not qualified investments, although it is possible to hold crypto in an RRSP indirectly through an ETF or similar security. Similarly, it is also possible to have shares of a private Canadian company in an RRSP. However, an RRSP plan holder is prohibited from holding shares of a corporation in an RRSP where they hold more than a 10-per-cent interest. Canadians can also invest in other private alternative investments in their RRSPs, such as certain private real estate investments. Four wealth traps that can derail your retirement Many people are drawn to alternative investments because of 'an enhanced return potential,' said Simon Wong, certified financial planner and head of financial planning at Blueprint Financial. 'It also obviously offers diversification benefits.' But these investments aren't simple. Private-equity funds are often illiquid, meaning they can be hard to sell, and they typically come with high fees. There's also the risk of losing your entire investment. As platforms make it easier for average investors to buy into private funds, some experts worry that people may not fully understand what they're putting their money in. Many private funds also have long lock-up periods, where money is typically tied up for five to 10 years before investors see any returns. Those features don't always mesh well with retirement planning, Mr. Wong said. Private-equity fees can be steep. The management fees for private equity are typically around 6 per cent, Mr. Felix said. For Wealthsimple's fund, the management fee is 1.5 per cent and there's a 12.5-per-cent performance fee, provided the deal earns at least an 8-per-cent return, according to the service's website. You also need at least $50,000 in liquid assets with or outside of Wealthsimple, and there's a $10,000 minimum investment. 'The vast majority of Canadians simply don't have a way to invest in this asset class, so they've been unable to take advantage of the diversification it offers, not to mention its compelling returns over the previous two decades,' Wealthsimple said in a statement announcing the launch of the fund in 2023. 'So Wealthsimple is opening access to more investors as part of our managed investing platform.' Some experts say the push to get retail investors into private equity is about finding buyers for assets that are hard to sell. 'The suspicion is that … it's getting tougher to sell those assets and they do want to offload, or they need liquidity,' Mr. Felix said. 'The next layer of investors that can buy from them is retail, the relatively unsophisticated investors who are not super well suited to evaluate whether they're getting a good deal when they buy these assets.'
