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Email this5:17 pm
December 12, 2009
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AltaRed said
All this financially engineered stuff is why I wouldn't put much, if anything, into WS Cash. There are simply too many other competitive alternatives with a direct line of sight.
There are more intermediaries involved, and resolution may be slower, that's true, but for what it's worth, I will note that forum moderator NorthernRaven uses Wealthsimple Cash and has nothing but good things to say about their experience with the firm. I agree with them. 🙂
Cheers,
Doug
5:19 pm
December 12, 2009
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NorthernRaven said
Caution is always good, but so is understanding. More specific details would be in the Wealthsimple agreements, but basically there are two Wealthsimple entities involved, Wealthsimple Investments ("WSII") and Wealthsimple Payments ("WSP"). WSII probably takes your money you provide to the Cash account and places it with WSP, which is depositing it with a bank (or banks) in your name under CDIC trust relationships with WSP as the trustee. It isn't just a big pot of money sitting (or not) at WSP - short of blatant fraud, those funds are very unlikely to be available for them to use for other purposes.Furthermore, neither WSP nor (probably) WSII are doing anything hugely risky like large scale investment banking, draining swamplands or whatnot. I'd guess the main risk of going bankrupt would be some sort of insurmountable debt problems, maybe? In any case, while not a lawyer etc. etc., I'd be pretty sure that those trust accounts belong to you and would eventually be returned, and would not be part of any corporate bankruptcy estate.
The non-registered Cash account has the additional wrinkle of the card, but doesn't change anything as far as I know. The cash is still in CDIC trusts at banks, and WSP merely transfers amounts as necessary to the Card provider, Koho, which doesn't hold the balance.
Whether WSP is using 1 bank or 10, it shouldn't really matter as none of the trust deposits should exceed the $100K limit. The only difference with more banks is a larger risk that a presumably unlikely bankruptcy of one of those Schedule 1 banks means CDIC gets involved in whatever money WSP has in your name at that bank.
Peace of mind is worth whatever one wants, and if someone is uncomfortable or uncertain about WS Cash accounts, there are other alternatives.
^ Well put.
8:36 pm
April 6, 2013
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Doug said
I see you're still spinning this false line, Norman1. 🙁
You don't understand how Wealthsimple operates. Wealthsimple Payments Inc. is just the subsidiary that operates the online platform and contracts Koho Financial Inc. to issue the Wealthsimple Cash Card. Actual customer funds never 'stay' on the Wealthsimple Cash Card; a customer is actually also opening accounts beneficially held though Wealthsimple Investments, Inc. It 'sweeps' funds behind the scenes at end of day from the WSII pooled trust account to cover the transactions made on the Wealthsimple Cash Card. So the only portion ever not CDIC insured, effectively, is the amount of the consumer's transactions to the card that day. 🙂
Not true. Haven't got around to actually reading the Wealthsimple Cash account agreement yet have you?
There is no WSII account unless one tries to do direct deposit or pre-authorized debits with the Wealthsimple Cash account. When one activates the direct deposit/pre-authorized debit feature of the Wealthsimple Cash account, a DD/PAD account is opened with WSII who is also a Payments Canada member.
WSII with its institution code 703 are used to accept the direct deposits and PAD's to be settled against the Wealthsimple Cash account with Wealthsimple Payments.
WSII just holds incoming funds temporarily on their way to Wealthsimple Payments Inc. Eventually, Wealthsimple Payments records the incoming funds in its books for the Wealthsimple Cash account and transfers the funds out of its own bank account to those trust accounts with the Banking Partners.
The Wealthsimple Cash Card is just another way to access the balance of the Wealthsimple Cash account with Wealthsimple Payments.
8:40 pm
April 6, 2013
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Doug said
There are more intermediaries involved, and resolution may be slower, that's true, but for what it's worth, I will note that forum moderator NorthernRaven uses Wealthsimple Cash and has nothing but good things to say about their experience with the firm. I agree with them. 🙂
So what? That former schoolteacher was quite happy too with her Synpase-based savings account in the US. That is until Synapse failed and, months later, was told only $500 of her $282,153.87 could be found among the FDIC member accounts opened by Synapse.
Please write your comments in the forum.