The Registered Education Savings Plan (RESP) is one of the popular registered accounts in Canada because of the tax advantage and government grants.
In addition to receiving free government grants, RESP also gives you the opportunity to maximize your savings for your children’s post-secondary education through investing.
Wealthsimple and Questrade are among the best RESP providers in Canada that help you maximize your RESP account by investing in your favourite securities.
If you’ve narrowed down your options to the 2 RESP providers but still finding it difficult to decide whether to open a Wealthsimple RESP or Questrade RESP account, this post is for you.
In this article, I provide an in-depth comparison between Wealthsimple RESP vs Questrade RESP to help you make an easy and informed selection.
Overview of Wealthsimple RESP vs Questrade RESP
The following is an overview of the key features of Wealthsimple vs Questrade RESP.
| Key Feature | Wealthsimple RESP | Questrade RESP |
|---|---|---|
| Investment platform | Robo advisor | Self-directed brokerage and Robo advisor |
| RESP type | Individual and Family RESP | Individual and Family RESP |
| Supported grants | Canada Education Savings Grant (CESG) Canada Learning Bond (CLB) British Columbia Training and Education Savings Grant (BCTESG) | Canada Education Savings Grant (CESG) Canada Learning Bond (CLB) Québec Education Savings Incentive (QESI) |
| Management fee | Balance up to $100,000: 0.5% Above $100,000: 0.4% | Balances up to $100,000: 0.25% Above $100,000: 0.20% |
| ETF MER | 0.12% to 0.15% | 0.17% to 0.22% |
| Withdrawal fees | None | None |
| Account transfer-in fee | Rebateable up to $150 | Rebateable up to $150 |
| Minimum investment | None | $1,000 |
| Portfolios | Classic ETF, SRI and Halal | ETF and SRI |
| Insurance | Up to $1 million by CIPF | Up to $1 million by CIPF plus $10 million in private insurance |
| Accessibility | Web portal and mobile app | Web portal and mobile app |
About Wealthsimple RESP
Wealthsimple RESP is part of the registered accounts available on the Wealthsimple managed investment platform (Wealthsimple Invest).
Since Wealthsimple Invest is a robo-advisor that automates the entire investing process, all you need to do is contribute to your RESP account and your funds will be invested in the right portfolio for you.
You can open an Individual RESP or Family RESP account on Wealthsimple Invest. As the name implies, Individual RESP allows you to name a single beneficiary.
But if you want to name all your children as RESP beneficiaries, you can open a Wealthsimple Family RESP account.
Wealthsimple RESP works like every other robo-advisor. To begin, you will be required to provide your investment objective and risk tolerance details.
Wealthsimple will use these information to recommend the right asset mix and portfolio for you. Any funds you contribute to the portfolio is then automatically invested in your chosen portfolio.
All the investing decisions, including rebalancing, are all be handled by Wealthsimple. This saves you the stress of manually rebalancing your portfolio when the market fluctuates or worrying about which shares to buy.
The federal government grants you can access through Wealthsimple RESP are Canadian Education Savings Grant (CESG) (basic and additional) and Canada Learning Bond (CLB).
If you’re a resident of British Columbia, you can also receive the provincial British Columbia Training and Education Savings Grant (BCTESG) on your Wealthsimple RESP.
That said, it takes Wealthsimple 6 to 10 weeks to deliver government grants to your RESP account after the procession.
Like other robo advisors, Wealthsimple Invest charges a management fee and management expense ratio (MER) on all managed accounts. More on this below.
The interesting part is that the management fee will be waived if you qualify for the Canada Learning Bond (CLB).
With no minimum balance requirements, Wealthsimple makes RESP investing easy to start even for those with little money to invest.
Learn more:
About Questrade RESP
Questrade RESP is available on both Questrade’s self-directed brokerage and robo-advisor. With this, Questrade has an RESP offering for everyone irrespective of whether they’re DIY or passive investors.
For the Questrade self-directed brokerage, investors are responsible for the entire investing process. While there’s no management fee involved, Questrade charges 1 cent/share (minimum of $4.95, maximum of $9.95) on its self-directed brokerage.
ETF purchases are however free on Questrade. So if you’re interested in building an RESP portfolio using ETFs, Questrade offers a great opportunity to save costs.
Other securities you can trade on the platform include stocks, foreign equities, bonds, GICs, FX, mutual funds, precious metals, CFDs and IPOs.
That said, you need a minimum balance of $1,000 to start trading on Questrade. That said, the comprehensive tools of the platform make it friendly for both beginners and seasoned DIY investors alike.
If you’ll rather leave the portfolio management of your RESP to the professionals, Questwealth Portfolios has an RESP offering.
Like Wealthsimple RESP, Questwealth RESP is also automated requiring little effort from your end. All you need to do is arrange for periodic contributions to your account and your funds are automatically invested.
With this, Questwealth will handle all the tasks on your behalf while you focus on other areas of your life. Based on your risk tolerance and the age of your children, Questwealth may invest your funds in aggressive, growth, balance, income, or conservative portfolio.
Like Questrade self-directed brokerage, Questwealth Portfolios requires a $1,000 minimum balance.
To cover the costs of managed investing, Questwealth Portfolios charges a 0.20%/0.25% management fee depending on your balance. The MER of the ETFs used to build the portfolios add an extra 0.17% to 0.22%.
Overall, both Questrade self-directed brokerage and robo advisor supports the following government grants:
- Basic and Additional Canada Education Savings Grant (CESG)
- Canada Learning Bond (CLB)
- Québec Education Savings Incentive (QESI)
Learn more:
RESP: Wealthsimple vs Questrade Comparison
With the above overview of Wealthsimple RESP and Questrade RESP out of the way, let’s now go over some of their similarities and differences.
Wealthsimple RESP vs Questrade RESP: Investing Platforms
Wealthsimple RESP is only available as a managed or robo-advisory RESP through Wealthsimple Invest. On the other hand, Questrade RESP is available both as self-directed and as robo-advisor through QuestWealth.
So you have more options with Questrade no matter your preferred investment style.
However, though they both offer robo-advisory services, there is a big difference in how the portfolios are managed. While QuestWealth uses an active investing strategy, Wealthsimple Invest portfolios follow a passive strategy.
If you’re looking to invest in a diversified portfolio that is managed passively, Wealthsimple RESP is the way to go.
But if you’re looking to manage the RESP portfolio yourself or invest in an actively managed robo-advisor, Questrade may be the only choice in Canada.
Related:
Wealthsimple RESP vs Questrade RESP: Minimum Investment
There’s no minimum investment requirement on Wealthsimple RESP. Anyone can start investing with as low as $1.
But that isn’t the case with Questrade RESP. You need a minimum balance of $1,000 to start investing both on Questrade self-directed brokerage and Questwealth Portfolios.
If you’re looking to start the RESP portfolio with a few hundreds and gradually build the portfolio over time, Wealthsimple is the clear winner over Questrade.
But if you’re comfortable with an initial balance of $1,000, then you can’t go wrong with either option.
Wealthsimple RESP vs Questrade RESP: Portfolios
Wealthsimple Invest has classic ETF, SRI and halal portfolios while Questwealth Portfolios has ETF and SRI portfolios.
Under any of the three underlying portfolios, funds in a Wealthsimple RESP account can be automatically invested in a conservative, balanced or growth portfolio.
On the other hand, funds in Questwealth RESP can be invested in either of the following portfolios:
- Aggressive growth
- Growth
- Balanced
- Income
- Conservative
The portfolio your RESP funds will be invested in usually depends on your risk tolerance and children’s age (investment horizon).
There isn’t a clear winner here. Both Wealthsimple and Questrade have different portfolio that meets varying investors’ risk appetite and needs.
Wealthsimple vs Questrade RESP: Performance
As expected, Wealthsimple RESP and Questrade RESP have varying performances depending on the portfolio funds are invested in.
But even within the same portfolio class, the two platforms perform differently. For example, Questrade has a better 5-year performance on their balanced portfolio when compared to Wealthsimple at the time of writing this.
This can be explained by the different investment styles – active vs passive investing – and the different ETFs they hold.
That said, there’s no way of knowing if the outperformance will continue.
The best advice here is to choose a portfolio that meets your risk. Both RESP providers invest in diversified ETF portfolios so you can be sure that their performance will closely match the indices they track.
Wealthsimple vs Questrade RESP: Fees
One common thing about Wealthsimple and Questrade is that they don’t charge withdrawal fees and they both waive the account transfer-in fee up to $150 per account.
In terms of the management fee for the robo-advisory service, Questwealth RESP is the clear winner. Its fee is just half that of Wealthsimple RESP.
On Wealthsimple Invest, you are charged a 0.4%/0.5% management fee depending on your balance. This is 2x of the Questwealth management fee schedule (0.2%/0.25%).
What I like about Wealthsimple Invest is that the management fee is waived for CLB grant recipients.
Questrade vs Wealthsimple RESP: Supported Grants
The table below shows the federal and provincial government grants available for RESP and the maximum amounts per child:
| Federal Grants: | |
| Canada Education Savings Grant (CESG) | $7,200 per child |
| Canada Learning Bond (CLB) | $2,000 per child |
| Provincial Grants | |
| BC Training and Education Savings Grant Program (BCTESG) | $1,200 per child |
| Quebec education savings incentive (QESI) | $3,600 per child |
Wealthsimple supports CESG (plus additional CESG), CLB, and BCTESG. QESI is currently not supported.
On the other hand, Questrade RESP supports CESG (plus additional CESG), CLB, and QESI, but not BTCESG.
If you live in BC or Quebec, you need to consider the government grant supported when choosing between Wealthsimple and Questrade. For other provinces, either platform will do just fine.
RESP: Questrade vs Wealthsimple – Which to Choose?
With the overview, features and comparison of Wealthsimple RESP vs Questrade RESP above, hopefully you now have everything you need to make a decision.
If you’re still on the fence, here’s a summary to help you:
Go with Questrade RESP if you want:
- to manage the RESP portfolio on your own
- the lowest management fee
- like the active investing approach used by Questrade
- Live anywhere in Canada except British Columbia
On the other hand, you should choose Wealthsimple RESP if you:
- want a passively managed portfolio
- want to start investing with as little as $1
- are not looking for a self-directed portfolio
If neither Wealthsimple RESP nor Questrade RESP suits your needs, Justwealth RESP is another great choice. Justwealth is arguably the overall best RESP robo-advisor in Canada.
Unlike Wealthsimple and Questrade, Justwealth invests funds in RESP through tailored RESP Target Date Portfolios.
With a dedicated Portfolio Manager and no minimum balance, Justwealth ensures that your RESP investing is seamless. Read my full Justwealth RESP review to learn more.
Regardless of which RESP provider you’re going with, the Canada Revenue Agency (CRA) recommends that you narrow your selection by inquiring about:
- Minimum balance
- Payment frequency
- Missed payments penalties
- Fees
- Investment options
- Supported grants
- Withdrawal rules and fees
- RESP transfer eligibility and fees
- Etc.
Wealthsimple vs Questrade RESP – Verdict
To maximize the benefits of your RESP account, you need to invest the funds in a portfolio that matches your risk tolerance and investment horizon. But how and where you invest your RESP funds can impact your investment returns.
Wealthsimple and Questrade are some of the best RESP providers in Canada. From the above comparison, you can see how the two providers differ in terms of investment platforms, fees, minimum balance, portfolio performance and supported grants.
My final verdict is that you should choose the provider that best suits your needs and preferences.
