Company:Wealthsimple

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Short description: Canadian investment management company
Wealthsimple Inc.
TypePrivate
IndustryFinancial services, online investment management
FoundedSeptember 2014; 9 years ago (2014-09)[1]
FounderMichael Katchen, (CEO), Rudy Adler (CMO), Brett Huneycutt (CPO)[2]
Headquarters
Toronto, Ontario
,
Canada[3]
ServicesRobo-advisor, stockbroker, electronic trading platform
AUMCA$30 billion (2024)[4]
OwnerPower Corporation of Canada (54.2%)[5]
Number of employees
>600[6] (2021)
Websitewealthsimple.ca

Wealthsimple Inc. is a Canadian online investment management service. The firm was founded in September 2014 by Michael Katchen, Brett Huneycutt, Som Seif, and Rudy Adler and is based in Toronto.[1][2] As of January 2024, the firm holds over C$30 billion in assets under management.[7] It is primarily owned by Power Corporation indirectly at 54.2% through investments made through their holdings in Power Financial, IGM Financial and Portag3.[5]

History

Pre-founding

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.

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 offerings

In 2015, Product Hunt Toronto honoured 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.[citation needed]

In October 2022, Wealthsimple announced that it had become Canada's first nonbank, non-credit-union to be approved for a direct settlement account by the Bank of Canada, paving the way for its access to Canada's future real-time-rail payment system.[22]

Products and services

Invest

Wealthsimple Invest is the company's automated investing service, which manages users' investments via a personalized portfolio of low-fee exchange-traded funds.[23]

Via Wealthsimple for Advisors and also for firms via Wealthsimple for Work, Wealthsimple combines a robo-advisor platform with access to live advisors.[24][25][26] 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.[27][28]

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.[29]

Micro-investing is a type of investment strategy that is designed to make investing regular, accessible and affordable, especially for those who may not have a lot of money to invest or who are new to investing.[30][31]

Cash

Wealthsimple Cash is a peer-to-peer cash transfer platform.[23]

In April 2018, the company began offering Smart Savings (later known as Wealthsimple Save), a savings account with a 1.7% interest rate.[32][33] Their site now promotes the rate at 1.0%.[34]

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.[35]

Trade and Crypto

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.[23] 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.[36]

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.[37] WealthSimple Crypto now allows users to deposit and withdraw select cryptocurrencies to and from self-custody wallets.[38][39]

Tax

Wealthsimple Tax (formerly SimpleTax) is an all-in-one tax preparation and filing platform.[40]

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.[40][41][42]

Current operations

Assets under management

In December 2023, Mike Katchen announced the company is targeting CA$100B in assets under administration within five years.[43]

Year # of Clients CA$
2024 Jan >3 million[44] >30 billion[44]
2023 Dec >3 million[43] >25 billion [43]
2023 Sep 30 2.3 million[45] 24.9 billion[45]
2022 Dec 31 2 million[46] 18.3 billion[46]
2021 Dec 31 1.6 million[47] 18.8 billion[47]
2020 Dec 31 500 thousand[48] 9.7 billion[48]
2019 Dec 31 250 thousand[49] 6.3 billion[49]
2018 Dec 31 100 thousand[50] 3.4 billion[50]
2018 Oct 10 100,000[51] 3 billion[51]
2018 Feb 21 65,000[52] 1.9 billion[52]
2017 May 11 30,000[53] 1 billion[53]
2017 Jan 10 15,000[3] 750 million[3][54]
2015 Dec 2 10,000[9] 400 million[9]
2015 April 10 1,000[1]

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.[55] In total, Power Financial Corporation has invested $30 million in Series A funding.[3][56] 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).[57]

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.[58]

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Casey, Quentin (10 April 2015). "Wealthsimple aims to turn financial services industry on its head with new low-cost approach to investing" (in en). Postmedia Network Inc.. Canada: Financial Post. http://business.financialpost.com/entrepreneur/fp-startups/wealthsimple-aims-to-turn-financial-services-industry-on-its-head-with-new-low-coast-approach-to-investing. 
  2. ↑ 2.0 2.1 Clifford, Catherine (2017-07-21). "29-year-old CEO who manages $1 billion warns young people: Buying a home can be a 'terrible investment'". https://www.cnbc.com/2017/07/21/ceo-michael-katchen-says-buying-a-home-can-be-a-terrible-investment.html. 
  3. ↑ 3.0 3.1 3.2 3.3 Ho, Solarina (10 January 2017). "Canadian fintech startup Wealthsimple sees major 2017 growth" (in en). CNBC LLC.. United States: CNBC.com. https://www.cnbc.com/2017/01/10/reuters-america-canadian-fintech-startup-wealthsimple-sees-major-2017-growth.html. 
  4. ↑ "Wealthsimple is starting to look like Canada's next big bank" (in en). The Globe and Mail. https://www.theglobeandmail.com/investing/personal-finance/article-wealthsimple-ceo-michael-katchen-big-bank/. 
  5. ↑ 5.0 5.1 "Power Corporation of Canada | Power Corporation Reports Third Quarter 2022 Financial Results" (in en). https://www.powercorporation.com/en/news/press-releases/2022/power-corporation-reports-third-quarter-2022-financial-results-122640/. 
  6. ↑ "About Wealthsimple: Work with us" (in en). https://www.wealthsimple.com/en-ca/about/work-with-us. 
  7. ↑ Carrick, Rob (2023-12-05). "Wealthsimple is starting to look like Canada's next big bank". The Globe and Mail. https://www.theglobeandmail.com/investing/personal-finance/article-wealthsimple-ceo-michael-katchen-big-bank/. 
  8. ↑ Joe Castaldo, "How Wealthsimple founder Michael Katchen is shaking up financial advice," Canadian Business, March 9, 2015.
  9. ↑ 9.0 9.1 9.2 9.3 9.4 9.5 Chevreau, Jonathan (2 December 2015). "Millennial-focused Wealthsimple to buy boomer robo-adviser ShareOwner, its first acquisition" (in en). Postmedia Network Inc.. Canada: Financial Post. http://business.financialpost.com/personal-finance/millennial-focused-wealthsimple-takes-over-boomer-robo-adviser-shareowner. 
  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. ↑ 12.0 12.1 "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" (in en-CA). Financial Post. 5 April 2018. https://business.financialpost.com/news/fp-street/robo-adviser-wealthsimple-launches-savings-account-with-premium-rate. 
  16. ↑ "Wealthsimple Save: High Interest Savings". https://www.wealthsimple.com/en-ca/product/save/. 
  17. ↑ 17.0 17.1 "The Wait(list) is Over: Say Hello to Wealthsimple Trade". March 13, 2019. https://www.wealthsimple.com/en-ca/magazine/news-trade-launch. 
  18. ↑ 18.0 18.1 O’Hara, Clare (August 15, 2018). "Wealthsimple launching zero-commission trading platform". The Globe and Mail. https://www.theglobeandmail.com/investing/article-wealthsimple-launching-zero-commission-trading-platform/. 
  19. ↑ Boulet, Simon (12 March 2019). "Announcing support for the new Wealthsimple API!". https://wealthica.com/blog/announcing-support-for-the-new-wealthsimple-api/. 
  20. ↑ "Retail investors say they're losing thousands as brokerages struggle with record traffic due to coronavirus panic - Financial Post". Financialpost. 25 March 2020. https://business.financialpost.com/investing/retail-investors-say-theyre-losing-thousands-as-brokerages-struggle-with-record-traffic-due-to-coronavirus-panic. 
  21. ↑ 21.0 21.1 "Wealthsimple Peer to Peer App Goes National - Investment Executive". 12 March 2021. https://www.investmentexecutive.com/news/industry-news/wealthsimples-peer-to-peer-app-goes-national/. 
  22. ↑ "Wealthsimple secures access for upcoming real-time-rail payment system". The Globe and Mail (Toronto, ON: The Canadian Press). 19 October 2022. https://www.theglobeandmail.com/business/article-wealthsimple-secures-access-for-upcoming-real-time-rail-payment-system/. 
  23. ↑ 23.0 23.1 23.2 "What is Wealthsimple Invest? – Help Centre". https://help.wealthsimple.com/hc/en-ca/articles/4404787366039-What-is-Wealthsimple-Invest-. 
  24. ↑ Din, Suleman (24 January 2017). "U.S. robo adviser market opens up to foreign competition" (in en). SourceMedia. United States: Financial Planning. https://www.financial-planning.com/news/newest-robo-adviser-will-serve-us-clients-from-canada. 
  25. ↑ Kyle. "Wealthsimple Review". https://youngandthrifty.ca/wealthsimple-review. 
  26. ↑ Marjo Johne, "Meet the next generation of wealth," The Globe and Mail, May 9, 2016.
  27. ↑ Robb Engen, "The Comparison: Battle of the robo-advisers," Toronto Star, March 14, 2016.
  28. ↑ Andrew Rickard March, "Robo advisor drops minimum investment requirement to $0," The Insurance & Investment Journal, March 9, 2016.
  29. ↑ "Introducing Roundup. Automatically Invest Your Spare Change.". https://www.wealthsimple.com/en-ca/magazine/news-roundup. 
  30. ↑ "The Innovators – Meet the 65 Companies and Their Owners Who Have Conjured Up the Latest Wave of Products, Services, and Technologies". May 1, 2001. https://money.cnn.com/magazines/fsb/fsb_archive/2001/05/01/302520/. 
  31. ↑ Lucchetti, Aaron (22 December 1999). "E-Tailers Allow Buyers to Add Fund Investments to Carts" (in en-US). Wall Street Journal. https://www.wsj.com/articles/SB945730607441550739. 
  32. ↑ Greenwood, Max (5 April 2018). "Wealthsimple Launches Savings Account to Compete with Big Banks". Techvibes. https://techvibes.com/2018/04/05/wealthsimple-launches-savings-account-to-compete-with-big-banks. 
  33. ↑ "Robo-adviser Wealthsimple launches savings account with premium rate" (in en-US). Financial Post. 2018-04-05. http://business.financialpost.com/news/fp-street/robo-adviser-wealthsimple-launches-savings-account-with-premium-rate. 
  34. ↑ "Learn about the Wealthsimple Save interest rate". https://help.wealthsimple.com/hc/en-ca/articles/360058456853. 
  35. ↑ "Account name update to Wealthsimple Save – Help Centre". https://help.wealthsimple.com/hc/en-ca/articles/1500004677002-Account-name-update-to-Wealthsimple-Save. 
  36. ↑ "Wealthsimple Trade in-depth review 2021: The pros and cons" (in en-US). 2021-03-05. https://www.moneysense.ca/save/investing/wealthsimple-trade-review/. 
  37. ↑ "Wealthsimple Crypto: Buy & Sell Bitcoin & Ethereum Instantly." (in en). https://www.wealthsimple.com/en-ca/product/crypto/. 
  38. ↑ "We've Got Wallets (Crypto, Not Velcro!)" (in en). 2 March 2022. https://www.wealthsimple.com/en-ca/magazine/crypto-wallets. 
  39. ↑ "Deposit cryptocurrency from an external wallet - Supported cryptocurrencies when making a deposit". https://help.wealthsimple.com/hc/en-ca/articles/4405752552859-Deposit-cryptocurrency-from-an-external-wallet#:~:text=Supported%20cryptocurrencies%20when%20making%20a%20deposit. 
  40. ↑ 40.0 40.1 "Wealthsimple Tax review 2021" (in en-US). 2021-04-12. https://www.moneysense.ca/save/taxes/wealthsimple-tax-review/. 
  41. ↑ "Wealthsimple expands into tax software space with acquisition of SimpleTax". https://www.theglobeandmail.com/business/article-wealthsimple-expands-into-tax-software-space-with-acquisition-of/. 
  42. ↑ Bloomberg, B. N. N. (2019-09-24). "Wealthsimple expands into tax software with SimpleTax acquisition - BNN Bloomberg". https://www.bnnbloomberg.ca/wealthsimple-expands-into-tax-software-with-acquisition-of-simpletax-1.1320920. 
  43. ↑ 43.0 43.1 43.2 "Wealthsimple Aims to Quadruple Assets to $74 Billion in Five Years" (in en). https://www.bnnbloomberg.ca/wealthsimple-aims-to-quadruple-assets-to-74-billion-in-five-years-1.2007729. 
  44. ↑ 44.0 44.1 "Wealthsimple: Grow your money" (in en). https://www.wealthsimple.com/en-ca. 
  45. ↑ 45.0 45.1 "Power Corporation Third Quarter Report for 2023" (in en). https://www.powercorporation.com/media/uploads/reports/quarter/bpcc-2023-q3-eng.pdf. 
  46. ↑ 46.0 46.1 "Power Corporation Annual Report for 2022" (in en). https://www.powercorporation.com/media/uploads/reports/annual/bpcc-2022-annual-report-final.pdf. 
  47. ↑ 47.0 47.1 "Power Corporation Annual Report for 2021" (in en). https://www.powercorporation.com/media/uploads/reports/annual/power_corporation_-_2021_annual_report-final.pdf. 
  48. ↑ 48.0 48.1 "Power Corporation Annual Report for 2020" (in en). https://www.powercorporation.com/media/uploads/reports/annual/pcc-ar-2020-en_pX1OAm0.pdf. 
  49. ↑ 49.0 49.1 "Power Corporation Annual Report for 2019" (in en). https://www.powercorporation.com/media/uploads/reports/annual/pcc-2019-annual-report-web_4C2nebJ.pdf. 
  50. ↑ 50.0 50.1 "Power Corporation Annual Report for 2018" (in en). https://www.powercorporation.com/media/uploads/reports/annual/pcc_ar_2018_en.pdf. 
  51. ↑ 51.0 51.1 Browne, Ryan (10 October 2018). "Robo-advisor Wealthsimple will likely raise more funding and definitely wants to IPO, CEO says" (in en). CNBC. https://www.cnbc.com/2018/10/10/wealthsimple-will-likely-raise-more-funding-definitely-wants-to-ipo.html. 
  52. ↑ 52.0 52.1 "Power Financial adds to investment in robo-adviser Wealthsimple". The Globe and Mail. 2018-02-21. https://www.theglobeandmail.com/globe-investor/power-financial-adds-to-investment-in-robo-adviser-wealthsimple/article38047474/. 
  53. ↑ 53.0 53.1 "Power Financial invests C$50 million in 'robo-adviser' Wealthsimple". Reuters. 2017-05-11. https://www.reuters.com/article/canada-wealth-idUSL1N1IB1YQ. 
  54. ↑ Lawler, Ryan. "Robo-advisor Wealthsimple raises another $37 million from Power Financial" (in en). TechCrunch. https://techcrunch.com/2017/05/11/weathsimple-37m-power-financial/. 
  55. ↑ Pett, David (9 April 2015). "Power Financial Corp to invest up to $30-million in robo-adviser Wealthsimple" (in en). Postmedia Network Inc.. Canada: Financial Post. http://business.financialpost.com/entrepreneur/fp-startups/power-financial-corp-to-invest-up-to-30-million-in-robo-adviser-wealthsimple. 
  56. ↑ Alexander, Doug (18 January 2016). "Bank of Montreal Enters Robo-Advising Ahead of Other Lenders" (in en). Bloomberg L.P.. United States: Bloomberg News. https://www.bloomberg.com/news/articles/2016-01-18/bank-of-montreal-jumps-into-robo-advising-ahead-of-other-lenders. 
  57. ↑ "Power Corporation of Canada | Organization Chart" (in en). https://www.powercorporation.com/en/companies/organization-chart/. 
  58. ↑ Bloomberg, B. N. N. (14 October 2020). "Wealthsimple tops $1B valuation in latest fundraising round - BNN Bloomberg". https://www.bnnbloomberg.ca/wealthsimple-tops-1b-valuation-in-latest-fundraising-round-1.1507929. 

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