Mylo vs Wealthsimple

 

Over the past several years, automated saving and investment apps have really come into their own. Though the technology originated from a tight handful of narrow-use offerings, competition in that market has led tech startups to innovate beyond previous expectations. Mylo and Wealthsimple are prime examples of this forthcoming innovation as both offer users the opportunity to manage a portion of their financial assets with a heightened degree of leverage.

That being said, Mylo and Wealthsimple are noticeably different saving and investment platforms, both in their desktop and app-based interfaces. Accordingly, prospective users and tech experts alike have seen fit to compare these two platforms based upon factors such as their fees, their portfolio options, and their security protocols.

If you’ve narrowed your list down to these two options, then you’re in luck because this comparative review will provide you with the insights necessary to choose the platform that’s right for your financial future. Whether you opt for Mylo or Wealthsimple, know that you’ve selected a saving and investment option that is growing in popularity and holds the potential to grow your personal wealth progressively.

A Quick Introduction

Before we dig too deep into these two investment platforms, let’s get to know Mylo and Wealthsimple at a biographical level. While this information may not be critical to understanding these apps at a technical level, it will help illuminate each app’s origins as well as their projected path towards success in the immediate future. Reliability, in that domain, will go a long way if you choose to make Mylo or Wealthsimple your go-to saving and investment platform.

Mylo – The Newcomer

For many prospective users, Mylo is new on the radar. That’s because Mylo only launched back in 2017, with the platform earning public recognition and a sizable userbase over the course of 2018. Mylo’s founders created the app to specifically target millennials, not simply because their investment needs were unmet in the current market but also because Mylo’s founders believed that these untapped investors could do a lot of social good if given the chance.

Mylo Spare Change

Mylo represents that chance. Specifically, Mylo gained notoriety because it offers a variety of social justice and environmental sustainability investment options, each of which only require the small change from automated roundups to remain viable. These core offers appear to have been enticing because Mylo currently boasts around 500,000 users – an impressive figure given the reluctance their target demographic.

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Wealthsimple – The Established Option

Wealthsimple, on the other hand, has had more time to establish itself in the automated savings and investment market. After launching in 2014, Wealthsimple immediately made a splash by diversifying its offerings to meet its users’ individual wealth management goals. Accordingly, a bevy of smart technologies underpin their core products, Wealthsimple Invest and Wealthsimple Save.

Since its founding, Wealthsimple has always made a point to emphasize its human element. As such, their in-house advisors and customer support are some of the best in the business. This, among other factors, earned Wealthsimple the 2016 and 2017 Webby Award for financial apps – a remarkable feat given the competition in this category.

Wealthsimple sign up bonus

Taken together, this exposure, in addition to Wealthsimple’s ongoing commitment to simplifying the savings and investment process, has clearly been productive because they currently manage around $3 billion in assets.

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A Note on Availability and Risk

Also, before you jump onto your mobile device’s app store to download Mylo or Wealthsimple, you must know that both platforms are presently only available to Canadian residents. This includes all of the major provinces, given that both apps include French language options. At this time, prospective users in the US and abroad will have to wait until these two productive apps expand into their market (which both are looking to do in the near future).

Also, both of these apps make use of one or more investment-centric components. While these may not have the look or feel of traditional capital or stock investments, they carry with them a similar degree of risk for loss of your principle investment value. Past performance in the ETF market (which both platforms rely heavily upon) does not guarantee future success, so be sure to carefully plan out your financial goals and limitations before jumping onto Mylo or Wealthsimple.

Investment Options

First and foremost, let’s look at Mylo and Wealthsimple’s investment options side-by-side. While both apps make use of an automated roundup tool to fund their users’ investments, both have unique offers that may be enticing to users with specialized investment goals. While comparing each platform’s investment options, be sure to remember that all investments come with financial risk that must be balanced against their benefits.

Mylo

Though Mylo doesn’t place this information front and center, a standard portfolio on this platform is typically comprised of several specialize Exchange-Traded Funds (ETFs for short). These ETFs are grouped from conservative to aggressive based upon the Modern Portfolio Theory and include a Money Market fund, a Fixed Income fund, and an Equity fund. More specifically, Mylo uses assets such as US bonds, Canadian bonds, US stocks, and more to compose these aforementioned funds.

Mylo Investments

Mylo’s in-app portfolio manager, which is available to all users, allows users to determine what arrangement of these core options will best achieve the user’s long-term investment goals. However, premium Mylo users (known as Advantage users) also gain access to the platform’s signature Socially Responsible Investment (SRI) options. These are specialized ETFs that only include assets focused on social justice, environmental sustainability, and community building.

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Wealthsimple

At a basic level, Wealthsimple shares its core investment setup with Mylo. Specifically, Wealthsimple also places the majority of its users’ funds into ETFs, each of which are composed of a variety of publicly-traded assets. Wealthsimple actually prides itself on placing its users’ “eggs” in a variety of “baskets”, including Canadian bonds, global stocks, and emergent markets. This, they believe, helps defray some of the platform’s inherent risk.

Wealthsimple sign up bonus

Wealthsimple also offers a variety of Socially Responsible Investment options, though their preliminary offerings are not locked behind a paywall. This includes Wealthsimple’s halal investment options, which align with Islamic law and allow religious users to build their wealth in accordance with their personal values. Wealthsimple has even worked with Shariah scholars to build these portfolio options, which explicitly exclude companies that profit from gambling, arms, tobacco, and more.

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Portfolio Options

Mylo and Wealthsimple also provide a variety of portfolio options, many of which are geared towards building a user’s wealth and planning for their financial future. In fact, both Mylo and Wealthsimple excel in this category because they offer portfolio options that minimize the user’s tax burden (based upon current Canadian regulations).

Mylo

Mylo offers a decent number of portfolio options, especially when accounting for its extremely low annual fee (detailed below). All Mylo members are able to utilize the platform’s best-known portfolio option, known as “Round Up to Give.” This option works in conjunction with CanadaHelps to allow Mylo users to donate their digital spare change to over 86,000 registered charities. Up to 52% of those donations can be deducted at tax time as well, making this portfolio option lucrative for all involved parties.

Mylo Advantage members gain further access to the platform’s advanced portfolio options. The most used among these supplementary options is the tax-free registered account (TFRA), a portfolio type introduced in 2009 that does not accrue taxes for deposits or withdraws. Some users who are planning for their future also opt to use Mylo’s registered retirement savings plan (RRSP), an account type that incentivizes long-term savings through specialized tax allowances.

Wealthsimple

It would not be an understatement to say that Wealthsimple has a lot to offer in the portfolio options domain. First and foremost, Wealthsimple’s TFRA and RRSP options are accessible to all of its users, regardless of their membership level. Should you max out your investment into those two types of accounts, Wealthsimple also offers a personal account type that can continue your savings while minimizing your tax burden.

Wealthsimple’s portfolio options are also flexible enough to accommodate the goals of nearly all investors. Their registered education savings plan (RISP), for example, is structured to provide a tax-advantaged solution to saving for a Canadian child’s future education. Wealthsimple’s locked-in retirement account (LIRA) even allows you to maintain pension funds from a former employer without incurring massive per-year tax levies.

Safety and Security Protocols

Naturally, any investment and financial management platform worth its salt should provide the latest and greatest in digital security protocols. These kind of safety features are positively crucial at this time as more and more app-based platforms are falling victim to data leaks and incursions that put sensitive personal data at risk. Luckily, both Mylo and Wealthsimple have been built with these critical considerations in mind.

Mylo

Admittedly, Mylo has been a bit reticent to describe their precise security protocols (likely in an effort to maintain an edge against would-be hackers). But all the same, Mylo is currently meeting the industry standard for apps in this class with their inclusion of 256-bit encryption on all data transfers within their platform. Mylo’s website even makes use of the most current SSL certificate in order to further secure users’ data.

Mylo App

While it may not fall into the traditional security category, Mylo has also made a point to highlight the safety they provide to their users’ financial investments. While all investments are subject to unpredictable risk, Mylo does insure users’ investment through the Canadian Investor Protection Fund. Also, Fidelity Clearing Canada and TSX Trust act as Mylo’s custodian and trustee, respectively.

Mylo 256-bit encryption

Wealthsimple

Wealthsimple has been a little bit more forthcoming about their security regimen because they believe that their users should understand the layers of protection between them and malicious actors. In fact, Wealthsimple is proud to detail parts of its multi-pronged security posture, which includes a 256-bit SSL certificate and an integrated firewall. Wealthsimple also backs up a great deal of the data on its servers, ensuring that your assets are protected in case of an incursion.

Wealthsimple app

Perhaps more important than security structure specifics, Wealthsimple has positioned itself to remain responsive to security threats in real time. As such, they say that they are committed to responding to any and all security issue reports made to them within 24 hours.

Wealthsimple Bank-Level Security

 

Fee Structure and Premium Membership

Among digital investment and wealth management platforms like Mylo and Wealthsimple, some fees are to be expected. These fees may take different forms, though, making it important for those looking to use either option long-term to do their research and consider the upkeep cost of investing or saving with Mylo and Wealthsimple.

Also, those looking to get the most out of their chosen app should consider the cost of premium membership. Though both Mylo and Wealthsimple have a comparatively low barrier to entry, prudent investors should still account for how these monthly fees can impact their bottom line.

Mylo

As far as fees go, Mylo keeps it pretty simple for their basic level users. In order to use Mylo, all users pay a base $1 fee per month, which is fairly low considering that some of its competitors charge twice to three times as much. That fee does not go up at all as you begin to invest more or grow your savings, making it a real bargain.

However, those who are looking to take advantage of Mylo’s full suite of features will be able to jump to a $3 per month fee. This provides a user with access to Mylo Advantage, which includes access to TFSA and RRSP portfolio options (described above) as well as some access to cashback features on connected debit and credit cards. Mylo Advantage users can also make next-day withdraws, which is a major boon to those looking to quickly turn their returns into accessible money.

Mylo Basic Fee

Wealthsimple

Admittedly, Wealthsimple’s fee structure is a bit more complex and harder to quantify with any degree of specificity. That is because it is based upon a user’s account balance value, which is calculated at the end of each day. At that time, the user’s account is “marked” to pay a specific portion of their balance at the end of the month (like a tax, in a sense). These fee rates currently run at 0.5% for users with $99,999 in their balance and 0.4% for users over that same threshold.

Wealthsimple also charges a management fees that is incurred regardless of a user’s account value. This fee is described as a “management expense ratio” (MER) and is currently estimated at around 0.2% (charged annually). This MER is not fixed, though, so users may be expected to pay out at a higher rate down the line.

Wealthsimple fee structure

Special Considerations When Choosing a Digital Investment Platform

If this is your first time choosing a digital investment platform, then you should not simply choose the first option that uses flashy marketing or exciting entry offers. Instead, you should take these following special considerations to heart and use them to guide you towards the platform option that is best suited to your budget and your overall investment goals:

  • Watch Out for Account Minimums – Though numerous digital investment platforms may look like a perfect fit on the surface, they can chain you to their services through the use of an unreasonable account minimum. Often, if you allow your account’s balance to drop below these high thresholds, you may be charged some severe penalties or be forced to close your account. These minimums may be hidden in the fine print, so be sure to read each platform’s disclosure documentation carefully.

 

  • Human Support is Critical – In a push towards full automation of the investment process, some platforms have allowed their human customer support options to fall by the wayside. Often, these human support teams are the most capable when it comes to resolve complex financial issues related to your account. As such, be sure to check other reviews of your prospective platform to ensure that their customer support team is up to snuff.

 

  • Know Your Freedom to Leave – In the long run, investment via an automated digital platform may not be for you. That’s perfectly okay, as long as you planned ahead and set up an exit strategy. Part of that strategy should involve an evaluation of your freedom to leave a given platform whenever you wish. Penalties may be involved in this process, making it all the more important to scope them out in advance.

 

The Final Word – Which App is Better?

Now that you’ve learned all about both Mylo and Wealthsimple, you may be left wondering which stands tall as the best app overall. In the end, though, this critical superlative is a matter of personal judgement. The best automated investment and savings app, as it turns out, is the best option to meet your budget and your goals for investment.

That being said, you should take the time to learn even more about apps like Mylo and Wealthsimple. Many offer a great number of features ranging from portfolio options to security protocols that will surely simplify the investment process for you. After completing your research, you may well find that either Mylo or Wealthsimple is the best automated investment and savings app for you.

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