Wealthsimple

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Wealthsimple Financial Inc.
Private
IndustryFinancial Services, Online Investment Management
FoundedSeptember 2014; 4 years ago (2014-09)[1]
FounderMichael Katchen, (CEO)[2]
Headquarters,
Services
AUMC$1,900,000,000 (February 21, 2018)[3]
Number of employees
175[4] (2018[4])
Websitewww.wealthsimple.com

Wealthsimple Financial Inc. is a Canadian online investment management service focused on making "investing easier for millennials."[5] The firm was founded in September 2014 by Michael Katchen and is based in Toronto.[1] As of February 2018, the firm had over C$1,900,000,000 in assets under management.[3] It is primarily owned by Power Corporation indirectly at 77.4% through (the investments were through their holdings in Power Financial, IGM Financial and Portag3).[6]

History[edit]

Pre-founding[edit]

Prior to founding Wealthsimple, Michael Katchen worked for 1000Memories, a Silicon Valley-based startup.[1] After Ancestry.com bought 1000Memories in 2012, Katchen developed a spreadsheet with tips to help his colleagues set up investment portfolios.[1] Interest in the spreadsheet helped inspire the idea for Wealthsimple.[1] In 2014, he returned to Toronto to launch the company.[1][7]

2015 Acquisition of Canadian ShareOwner Investments Inc.[edit]

In December 2015, Wealthsimple made its first acquisition with acquiring Canada's first robo-advisor service, Canadian ShareOwner Investments Inc.[5] Through the acquisition Wealthsimple became an owner of one of Canada's 14 discount brokerages (2015) alongside other owners of discount brokerages including Bank of Montreal and Royal Bank of Canada.[5][8] The acquisition of Canadian ShareOwner Investment Inc. resulted in the assets under management comprising CAD $400,000,000 across 10,000 customer accounts.[5]

2016 – Present: focus on product offerings[edit]

In March 2016, the firm began offering clients access to socially responsible investment funds.[9]

In May 2016, the firm announced a partnership with Mint, thus allowing clients to sync their Wealthsimple investment account to Mint's budgeting software.[10]

Also in May 2016, the firm launched Wealthsimple for Advisors, an automated platform for financial advisors. The service is intended for advisors who wish to maintain clients with accounts below their minimum requirements.[11]

Products and services[edit]

Wealthsimple combines a robo-advisor platform with access to live advisors.[12][13][14] Each client is provided an investment advisor who helps match investments to the client's long-term goals and risk tolerance. The firm does not occupy retail space; instead its advisors are available via phone, text message, email or video chat.[1] There is no account minimum required and no charge per transaction. An annual fee is charged ranging from 0.4% to 0.5% based on account size. Portfolios are monitored daily and automatically rebalanced if they move beyond certain thresholds.[15][16]

In April 2018, the company starting offering a savings account with a 1.7% interest rate.[17][18]

Current operations[edit]

Clients[edit]

Clients
Year # of Clients
21 February 2018 65,000[3]
11 May 2017 30,000[19]
2017 15,000[2]
2016
2015 1,000 (April)[1]-10,000 (December)[5]
2014

Finances[edit]

Funding

The first round of raising money was in May 2014 raising CAD $1.9 million investors included Eric Kirzner, Joe Canavan, and Roger Martin.[5][1]

In April 2015, the firm received CAD $10 million from Power Financial Corporation in an agreement structured to allow for a future investment of CAD $20 million within 12 months.[20] In total Power Financial Corporation has invested $30 million in Series A funding.[2][21] It is now primarily owned by Power Corporation indirectly at 77.4% through (the investments were through their holdings in Power Financial, IGM Financial and Portag3)[6]

Fees

An annual fee is charged ranging from 0.35% to 0.5% based on account size.

In January 2017 CNBC reported that Wealthsimple launched a service for clients whose accounts have in excess of C$100,000 whereby their management fee is 0.4%.[2]

Assets under management
Assets under management
Year CA$
21 February 2018 1.9 billion[3]
2017 750 million[2][22]
2016
2015 400 million[5]
2014

Corporate affairs[edit]

Employees[edit]

Employee growth over time[edit]

Employees
Year # of Employees
2017 75[2]
2016 25[2]
2015 12[1]
2014

Recognition[edit]

In 2015, Product Hunt Toronto honored Wealthsimple with its first-ever Product of the Year Award.[23] In 2016, the 20th Annual Webby Awards named Wealthsimple its Best Financial Services/Banking website.[10]

References[edit]

  1. ^ a b c d e f g h i j Casey, Quentin (10 April 2015). "Wealthsimple aims to turn financial services industry on its head with new low-cost approach to investing" (FP Startups). Canada: Financial Post. Postmedia Network Inc. Retrieved 27 March 2017.
  2. ^ a b c d e f g h i Ho, Solarina (10 January 2017). "Canadian fintech startup Wealthsimple sees major 2017 growth". United States: CNBC.com. CNBC LLC. Retrieved 25 March 2017.
  3. ^ a b c d "Power Financial adds to investment in robo-adviser Wealthsimple". The Globe and Mail. 2018-02-21. Retrieved 2018-02-21.
  4. ^ a b Cite error: The named reference https://www.linkedin.com/company/wealthsimple/ was invoked but never defined (see the help page).
  5. ^ a b c d e f g Chevreau, Jonathan (2 December 2015). "Millennial-focused Wealthsimple to buy boomer robo-adviser ShareOwner, its first acquisition" (Personal Finance – Young Money). Canada: Financial Post. Postmedia Network Inc. Retrieved 28 March 2017.
  6. ^ a b "Power Corporation of Canada | Organization Chart". www.powercorporation.com. Retrieved 2017-11-27.
  7. ^ Joe Castaldo, "How Wealthsimple founder Michael Katchen is shaking up financial advice," Canadian Business, March 9, 2015.
  8. ^ "Wealthsimple Acquires Automated Investment Manager to Innovate Canadian FinTech," TechVibes, December 2, 2015.
  9. ^ Clare OíHara, "Canadian robo-advisers plug into socially responsible investing," The Globe and Mail, March 24, 2016.
  10. ^ a b "Wealthsimple Wins Webby Award, Partners with Mint," TechVibes, May 3, 2016
  11. ^ Fiona Collie, "Wealthsimple launches platform for advisors," [Investment Executive], May 24, 2016.
  12. ^ Din, Suleman (24 January 2017). "U.S. robo adviser market opens up to foreign competition". United States: Financial Planning. SourceMedia. Retrieved 25 March 2017.
  13. ^ Kyle. "Wealthsimple Review". Retrieved 24 December 2017.
  14. ^ Marjo Johne, "Meet the next generation of wealth," The Globe and Mail, May 9, 2016.
  15. ^ Robb Engen, "The Comparison: Battle of the robo-advisers," Toronto Star, March 14, 2016.
  16. ^ Andrew Rickard March, "Robo advisor drops minimum investment requirement to $0," The Insurance & Investment Journal, March 9, 2016.
  17. ^ Greenwood, Max (5 April 2018). "Wealthsimple Launches Savings Account to Compete with Big Banks". Techvibes. Retrieved 7 April 2018.
  18. ^ "Robo-adviser Wealthsimple launches savings account with premium rate". Financial Post. 2018-04-05. Retrieved 2018-05-14.
  19. ^ "Power Financial invests C$50 million in 'robo-adviser' Wealthsimple". Reuters. 2017-05-11. Retrieved 2017-05-12.
  20. ^ Pett, David (9 April 2015). "Power Financial Corp to invest up to $30-million in robo-adviser Wealthsimple" (FP Street). Canada: Financial Post. Postmedia Network Inc. Retrieved 28 March 2017.
  21. ^ Alexander, Doug (18 January 2016). "Bank of Montreal Enters Robo-Advising Ahead of Other Lenders" (Tech). United States: Bloomberg News. Bloomberg L.P. Retrieved 25 March 2017.
  22. ^ Lawler, Ryan. "Robo-advisor Wealthsimple raises another $37 million from Power Financial". TechCrunch. Retrieved 2017-11-20.
  23. ^ Douglas Soltys, “Happy Birthday, #Producthuntto,” Betakit.com, August 28, 2015.

External links[edit]