Wealthsimple

Wealthsimple Inc. is a Canadian online investment management service. The firm was founded in September 2014 by Michael Katchen and is based in Toronto.[1] As of November 2021, the firm holds over C$15 billion in assets under management.[6] It is primarily owned by Power Corporation indirectly at 70.1% through investments made through their holdings in Power Financial, IGM Financial and Portag3.[7]

Wealthsimple Inc.
TypePrivate
IndustryFinancial services, online investment management
FoundedSeptember 2014; 7 years ago (2014-09)[1]
FounderMichael Katchen, (CEO)[2]
Headquarters,
Canada[2]
ServicesRobo-advisor, stockbroker, electronic trading platform
AUMCA$15 billion (2021)[3]
OwnerPower Corporation of Canada (70.1%)[4]
Number of employees
>600[5] (2021)
Websitewealthsimple.ca

HistoryEdit

Pre-foundingEdit

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][8]

2015 acquisition of Canadian ShareOwner Investments Inc.Edit

In December 2015, Wealthsimple merged with Canadian ShareOwner Investments Inc., a Canadian order-execution only broker-dealer.[9] 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.[9][10] The acquisition of Canadian ShareOwner Investment Inc. resulted in the assets under management comprising CA$400,000,000 across 10,000 customer accounts.[9]

2016–present: focus on product offeringsEdit

In 2015, Product Hunt Toronto honored Wealthsimple with its first-ever Product of the Year Award.[11] In 2016, the 20th Annual Webby Awards named Wealthsimple its Best Financial Services/Banking website.[12]

In March 2016, Wealthsimple began offering clients access to socially responsible investment funds.[13]

In May 2016, the firm announced a partnership with Mint, thus allowing clients to sync their Wealthsimple investment account to Mint's budgeting software.[12] Also that month, Wealthsimple 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.[14]

On 5 April 2018, the firm launched Wealthsimple Save, a high-interest savings account with a rate that will always be higher than traditional banks.[15][16] Wealthsimple Trade, a zero-commission stock and exchange-traded fund (ETF) trading mobile app, was available as a beta in August 2018 and publicly launched in March 2019.[17][18]

As of March 2019, Wealthsimple publicly supports Wealthica synchronization via their secure, open API.[19]

In January 2020, Wealthsimple launched Wealthsimple Cash for Canadian customers, a hybrid savings/chequing account offering high interest on balances. Spending features such as a Visa Debit card, e-transfers, bill payments, and paycheque/cheque deposits are planned to be rolled out through 2020.

As of March 2020, Wealthsimple Trade became unable to handle the volume of trades their customers were placing and began capping the number of users and putting some investors on to waitlists.[20]

In November that year, Wealthsimple Cash transitioned from a savings account to a peer-to-peer cash transfer app. Having first launched in beta, the app was made widely available in March 2021.[21]

On 8 July 2021, Wealthsimple Trade announced that they would launch fractional shares in the platform, starting the next day.

Products and servicesEdit

InvestEdit

Wealthsimple Invest is the company's automated investing service, which manages users' investments via a personalized portfolio of low-fee exchange-traded funds.[22]

Via Wealthsimple for Advisors and also for firms via Wealthsimple for Work, Wealthsimple combines a robo-advisor platform with access to live advisors.[23][24][25] Each client is provided an investment advisor who helps match investments to the client's long-term goals and risk tolerance. The company 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.[26][27]

In September 2018, the company started offering a micro-investing service called Roundup, which automatically rounds up purchases and invests the extra change into one's Wealthsimple investment account.[28]

CashEdit

Wealthsimple Cash is a peer-to-peer cash transfer platform.[22]

In April 2018, the company began offering Smart Savings (later known as Wealthsimple Save), a savings account with a 1.7% interest rate.[29][30] Their site now promotes the rate at 0.5%.[31]

In January 2020, the company launched Wealthsimple Cash for Canadian customers, a hybrid savings/chequing account offering high interest on balances. That November, Wealthsimple Cash transitioned from a savings account to a peer-to-peer cash transfer app. Having first launched in beta, the app was made widely available in March 2021.[21]

On 29 March 2021, Wealthsimple simplified the names of their products and how users see their accounts. Since the update, users are only able to have one Wealthsimple Cash account, and any accounts that are not connected to the Wealthsimple Cash app now appear as Wealthsimple Save.[32]

Trade and CryptoEdit

Wealthsimple Trade is a self-directed investment platform, allowing users to buy and sell various individual stocks and exchange-traded funds (ETFs) on major Canadian and U.S. exchanges.[22] This platform was introduced in March 2019, offering a stock and ETF trading account with zero-commission fees in the U.S. and Canada.[17][18] Wealthsimple Trade was the first commission-free trading platform in Canada.[33]

Wealthsimple Crypto is the company's platform for buying and selling several cryptocurrencies, including BTC and ETH. This service is offered through the same app/web portal as Trade. Much like Trade, this service has no fees.[34] WealthSimple Crypto now allows users to deposit and withdraw select cryptocurrencies to and from self-custody wallets.[35][36]

TaxEdit

Wealthsimple Tax (formerly SimpleTax) is an all-in-one tax preparation and filing platform.[37]

In September 2019, Wealthsimple acquired SimpleTax, a Canadian tax software company originally launched in 2012. The acquisition of SimpleTax added online tax-return preparation and filing service to Wealthsimple's suite of financial products.[37][38][39]

Current operationsEdit

ClientsEdit

Year # of Clients
2021 >1.5 million[3]
2019 August 15 175,000[40]
2019 May 22 150,000[41]
2018 October 10 100,000[42]
2018 February 21 65,000[43]
2017 May 11 30,000[44]
2017 15,000[2]
2016
2015 December 10,000[9]
2015 April 1,000[1]

FinancesEdit

Funding

In May 2014, the company initially raised CA$1.9 million from investors Eric Kirzner, Joe Canavan, and Roger Martin.[9][1]

In April 2015, the firm received $10 million from Power Financial Corporation in an agreement structured to allow for a future investment of $20 million within 12 months.[45] In total, Power Financial Corporation has invested $30 million in Series A funding.[2][46] It is now primarily owned by Power Corporation indirectly at 77.4% (the investments were through their holdings in Power Financial, IGM Financial, and Portag3).[7]

In October 2020, Wealthsimple raised $114 million (US$87 million) in funding from an investor group led by Technology Crossover Ventures, in addition to Greylock Partners, Meritech Capital Partners, Two Sigma Ventures, and Allianz X.[47]

Assets under management
Year CA$
2021 Nov 15 billion[3]
2021 Feb 5 8.4 billion[3]
2019 Aug 15 5 billion[40]
2019 May 22 4.5 billion[41]
2018 Oct 10 3 billion[42]
2018 Feb 21 1.9 billion[43]
2017 750 million[2][48]
2016
2015 400 million[9]

ReferencesEdit

  1. ^ a b c d e f g h i Casey, Quentin (10 April 2015). "Wealthsimple aims to turn financial services industry on its head with new low-cost approach to investing". No. FP Startups. Canada: Financial Post. Postmedia Network Inc. Retrieved 27 March 2017.
  2. ^ a b c d e 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 "About Wealthsimple: Who we are". wealthsimple.com. Retrieved 2022-02-05.
  4. ^ "Power Corporation of Canada | Organization Chart". www.powercorporation.com. Retrieved 28 February 2021.
  5. ^ "About Wealthsimple: Work with us". wealthsimple.com. Retrieved 1 April 2022.
  6. ^ "Who We Are | Wealthsimple".
  7. ^ a b "Power Corporation of Canada | Organization Chart". www.powercorporation.com. Retrieved 2019-05-15.
  8. ^ Joe Castaldo, "How Wealthsimple founder Michael Katchen is shaking up financial advice," Canadian Business, March 9, 2015.
  9. ^ a b c d e f Chevreau, Jonathan (2 December 2015). "Millennial-focused Wealthsimple to buy boomer robo-adviser ShareOwner, its first acquisition". No. Personal Finance – Young Money. Canada: Financial Post. Postmedia Network Inc. Retrieved 28 March 2017.
  10. ^ "Wealthsimple Acquires Automated Investment Manager to Innovate Canadian FinTech," TechVibes, December 2, 2015.
  11. ^ Douglas Soltys, “Happy Birthday, #Producthuntto,” Betakit.com, August 28, 2015.
  12. ^ a b "Wealthsimple Wins Webby Award, Partners with Mint," TechVibes, May 3, 2016
  13. ^ Clare OíHara, "Canadian robo-advisers plug into socially responsible investing," The Globe and Mail, March 24, 2016.
  14. ^ Fiona Collie, "Wealthsimple launches platform for advisors," [Investment Executive], May 24, 2016.
  15. ^ "Robo-adviser Wealthsimple launches savings account with premium rate | Financial Post". Financial Post. 5 April 2018. Retrieved 16 May 2019.
  16. ^ "Wealthsimple Save: High Interest Savings". www.wealthsimple.com. Retrieved 16 May 2019.
  17. ^ a b "The Wait(list) is Over: Say Hello to Wealthsimple Trade". Wealthsimple Magazine. March 13, 2019. Retrieved 16 May 2019.
  18. ^ a b O’Hara, Clare (August 15, 2018). "Wealthsimple launching zero-commission trading platform". The Globe and Mail. Retrieved 16 May 2019.
  19. ^ Boulet, Simon (12 March 2019). "Announcing support for the new Wealthsimple API!". Journey to $10B : Wealthica. Retrieved 16 May 2019.
  20. ^ "Retail investors say they're losing thousands as brokerages struggle with record traffic due to coronavirus panic - Financial Post". Financialpost. 25 March 2020. Retrieved 25 March 2020.
  21. ^ a b "Wealthsimple Peer to Peer App Goes National - Investment Executive". 12 March 2021. Retrieved 30 April 2020.
  22. ^ a b c https://help.wealthsimple.com/hc/en-ca/articles/4404787366039-What-is-Wealthsimple-Invest-
  23. ^ Din, Suleman (24 January 2017). "U.S. robo adviser market opens up to foreign competition". United States: Financial Planning. SourceMedia. Retrieved 25 March 2017.
  24. ^ Kyle. "Wealthsimple Review". Retrieved 24 December 2017.
  25. ^ Marjo Johne, "Meet the next generation of wealth," The Globe and Mail, May 9, 2016.
  26. ^ Robb Engen, "The Comparison: Battle of the robo-advisers," Toronto Star, March 14, 2016.
  27. ^ Andrew Rickard March, "Robo advisor drops minimum investment requirement to $0," The Insurance & Investment Journal, March 9, 2016.
  28. ^ "Introducing Roundup. Automatically Invest Your Spare Change". Magazine. Retrieved 2020-01-30.
  29. ^ Greenwood, Max (5 April 2018). "Wealthsimple Launches Savings Account to Compete with Big Banks". Techvibes. Retrieved 7 April 2018.
  30. ^ "Robo-adviser Wealthsimple launches savings account with premium rate". Financial Post. 2018-04-05. Retrieved 2018-05-14.
  31. ^ "Learn about the Wealthsimple Save interest rate". Retrieved 2021-10-19.{{cite web}}: CS1 maint: url-status (link)
  32. ^ "Account name update to Wealthsimple Save – Help Centre". help.wealthsimple.com. Archived from the original on 2021-04-16.
  33. ^ "Wealthsimple Trade in-depth review 2021: The pros and cons". MoneySense. 2021-03-05. Retrieved 2021-11-12.
  34. ^ "Wealthsimple Crypto: Buy & Sell Bitcoin & Ethereum Instantly". www.wealthsimple.com. Retrieved 2021-05-02.
  35. ^ "We've Got Wallets (Crypto, Not Velcro!)". www.wealthsimple.com. Retrieved 2022-04-05.
  36. ^ "Deposit cryptocurrency from an external wallet - Supported cryptocurrencies when making a deposit".{{cite web}}: CS1 maint: url-status (link)
  37. ^ a b "Wealthsimple Tax review 2021". MoneySense. 2021-04-12. Retrieved 2021-11-12.
  38. ^ "Wealthsimple expands into tax software space with acquisition of SimpleTax". Retrieved 2019-09-27.
  39. ^ Bloomberg, B. N. N. (2019-09-24). "Wealthsimple expands into tax software with SimpleTax acquisition - BNN Bloomberg". BNN. Retrieved 2019-09-27.
  40. ^ a b "Who we are". www.wealthsimple.com. 2021-02-19. Retrieved 2021-02-19.
  41. ^ a b Browne, Ryan (2019-05-22). "Wealthsimple raises $75 million and says it's closer on path toward an IPO". CNBC. Retrieved 2019-08-22.
  42. ^ a b Browne, Ryan (10 October 2018). "Robo-advisor Wealthsimple will likely raise more funding and definitely wants to IPO, CEO says". CNBC. Retrieved 15 May 2019.
  43. ^ a b "Power Financial adds to investment in robo-adviser Wealthsimple". The Globe and Mail. 2018-02-21. Retrieved 2018-02-21.
  44. ^ "Power Financial invests C$50 million in 'robo-adviser' Wealthsimple". Reuters. 2017-05-11. Retrieved 2017-05-12.
  45. ^ Pett, David (9 April 2015). "Power Financial Corp to invest up to $30-million in robo-adviser Wealthsimple". No. FP Street. Canada: Financial Post. Postmedia Network Inc. Retrieved 28 March 2017.
  46. ^ Alexander, Doug (18 January 2016). "Bank of Montreal Enters Robo-Advising Ahead of Other Lenders". No. Tech. United States: Bloomberg News. Bloomberg L.P. Retrieved 25 March 2017.
  47. ^ Bloomberg, B. N. N. (14 October 2020). "Wealthsimple tops $1B valuation in latest fundraising round - BNN Bloomberg". BNN. Retrieved 28 February 2021.
  48. ^ Lawler, Ryan. "Robo-advisor Wealthsimple raises another $37 million from Power Financial". TechCrunch. Retrieved 2017-11-20.

External linksEdit