Wealthsimple

Wealthsimple Inc. is a Canadian online investment management service focused on millennials. The firm was founded in September 2014 by Michael Katchen and is based in Toronto. As of February 19, 2021, the firm holds over C$8.4 billion in assets under management. It is primarily owned by Power Corporation indirectly at 70.1% through investments made through their holdings in Power Financial, IGM Financial and Portag3.
History.
Pre-founding.
Prior to founding Wealthsimple, Michael Katchen worked for 1000Memories, a Silicon Valley-based startup. After Ancestry.com bought 1000Memories in 2012, Katchen developed a spreadsheet with tips to help his colleagues set up investment portfolios. Interest in the spreadsheet helped inspire the idea for Wealthsimple. In 2014, he returned to Toronto to launch the company.
2015 acquisition of Canadian ShareOwner Investments Inc..
In December 2015, Wealthsimple made its first acquisition with acquiring Canada's first robo-advisor service, Canadian ShareOwner Investments Inc. 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. The acquisition of Canadian ShareOwner Investment Inc. resulted in the assets under management comprising CAD $400,000,000 across 10,000 customer accounts.
2016 – present: focus on product offerings.
In March 2016, Wealthsimple began offering clients access to socially responsible investment funds.
In May 2016, the firm announced a partnership with Mint, thus allowing clients to sync their Wealthsimple investment account to Mint's budgeting software.
Also in May 2016, 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.
On April 5, 2018 the firm launched Wealthsimple Save, a high interest savings account with a rate that will always be higher than traditional banks.
As of March 2019, Wealthsimple publicly supports Wealthica synchronization via their secure, open API.
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.
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 onto wait lists.
In November 2020, Wealthsimple Cash transitioned from a savings account to a peer-to-peer cash transfer app. Having first launched in beta the peer-to-peer cash transfer app was made widely available in March 2021.
Products and services.
Invest.
Wealthsimple combines a robo-advisor platform with access to live advisors. 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. 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.
In September 2018, the company started offering a micro-investing service called Roundup, which automatically rounds up purchases and invests the extra change into your Wealthsimple investment account.
Wealthsimple offers their platform for advisors via Wealthsimple for Advisors and also for firms via Wealthsimple for Work.
Cash.
In April 2018, the company starting offering a savings account with a 1.7% interest rate. Their site now promotes the rate at 0.75%.
Wealthsimple Cash offers a higher savings rate than Wealthsimple Save, with full service chequing account features planned to be in service by the end of 2020.
Trade.
In March 2019, the company offered a stock and ETF trading account with zero-commission fees in the U.S. and Canada.
Crypto.
As of current Wealthsimple offers a crypto platform which allows users to trade cryptocurrency (BTC and ETH). This service is offered through the same web portal as the Trade service. Much like Trade, this service has no fees.
Wealthsimple has come under criticism because the private keys to any crypto currency's are held by Wealthsimple itself. This means that users can't transact outside of Wealthsimple with their cryptocurrency.
Tax.
In September 2019, Wealthsimple acquired SimpleTax, a Canadian tax software company. The acquisition of SimpleTax adds online tax-return preparation and filing service to Wealthsimple's suite of financial products.
Current operations.
Finances.
In May 2014 the company initially raised CAD $1.9 million from investors Eric Kirzner, Joe Canavan, and Roger Martin.
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. In total Power Financial Corporation has invested $30 million in Series A funding. 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).
In October 2020, Wealthsimple raised CAD$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.
An annual fee is charged ranging from 0.4% to 0.5% based on account size.
Wealthsimple clients whose accounts have in excess of C$100,000 whereby their management fee is 0.4%.
Recognition.
In 2015, Product Hunt Toronto honored Wealthsimple with its first-ever Product of the Year Award. In 2016, the 20th Annual Webby Awards named Wealthsimple its Best Financial Services/Banking website.