article-aa

The fintech will offer commission-free trading via a mobile app in the coming weeks, and plans to offer the trading of other cryptocurrencies. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: Wealthsimple is entering a crowded space that includes Binance, Coinbase and Gemini. The last firm, which has $200 million in cold storage insurance, will act as a custodian for Wealthsimple’s crypto assets. This cryptocurrency division is one of several the company is forming via partnerships. In August 2019, the firm announced a partnership with wealth management firm Grayhawk Investments. In January, it launched chequing accounts with 2.4 per cent interest in a partnership with two of the Big Six banks. Whether partnerships are a path for growth for Wealthsimple remains to be seen. There is, however, initial interest in the crypto platform: over 44,000 people have signed up for a waitlist so far.

article-aa

The accounts come with no monthly or low-balance fees. Wealthsimple will also roll out ATM fee reimbursements, foreign-exchange-transaction fees and a tungsten metal card with the accounts. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: Today’s move is a challenge to Canada’s big banks. In its press release, Wealthsimple highlights how much more money would accrue at a 2.4 per cent interest rate compared to high-interest savings or traditional chequing accounts from other institutions. At the same time, however, this chequing account is only possible because Wealthsimple has made a deal with two of Canada’s Big Six banks to actually hold the money, as the company does not have a banking licence. Keeping banks happy while trying to take their customers isn’t the only tightrope to walk for Wealthsimple: it’s heavily backed by financial services giant Power Corporation, but so is Koho, which already offers a bank account.

article-aa

The Toronto-based fintech recently incorporated three subsidiaries: Wealthsimple Digital Assets, Wealthsimple Payments and Wealthsimple Cash. The Digital Assets and Payments moves were first reported by the newsletter OPM Wars. (The Globe and Mail, OPM Wars)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: Wealthsimple CEO Michael Katchen said he wants to offer chequing accounts to customers, and the company’s new subsidiaries also come with licences for money transfers, foreign exchanges and dealing in cryptocurrencies. The new ventures follow similar moves from Wealthsimple’s rivals. Last month, Questrade applied for a banking licence. In November 2019, The Logic broke the news that RBC was exploring building a cryptocurrency trading platform. These licences will potentially create greater overlap between Wealthsimple and Koho, both of which are heavily backed by insurance firm Power Corporation. Koho already offers bank accounts. U.K.-based fintechs Revolut and TransferWise, both of which are trying to expand in Canada, also have licences for electronic money transfers and foreign exchange.

article-aa

Wealthsimple is building a digital platform for Grayhawk’s clients, which are 30 of Canada’s wealthiest families with combined assets of $800 million. Grayhawk will use Wealthsimple’s platform to automate processes like account opening and administration. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: This is the largest deal by Canada’s biggest robo-adviser, coming on the heels of a growing number of  partnerships between fintech firms and banks. Another Canadian robo-adviser, Nest Wealth, started partnering with traditional services with a B2B platform in late 2016—it was among the first. CI Financial, looking to build an online investment tool, bought a majority stake in Vancouver-based robo-adviser WealthBar earlier this year. In April, U.S. robo-advising giant Betterment partnered with Goldman Sachs and BlackRock. And, banks like RBC, TD, and BMO have all recently launched their own robo-advisers.

article-aa

The funding round represents one of the biggest investments in a Canadian fintech company, said Wealthsimple CEO Michael Katchen. Investments include $30 million from Power Corporation, which, along with its subsidiaries Portag3 and IGM, owns a 88.6 per cent stake in the robo-adviser. Wealthsimple did not disclose how much Allianz, a Germany-based global insurance and investment company that manages close to €2 trillion in assets, invested, or what its stake in Wealthsimple will be. (Globe and Mail)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: The company’s partnerships with Power Corporation and Allianz are a departure from tech companies’ typical approach to fundraising. Rather than seeking out venture capital, Wealthsimple has gone after bigger investments with an eye on the longer term. “Financial services is a different kind of animal that requires building very long-term trust with clients and institutional partners,” said Katchen during the announcement on Wednesday. “And because of that, strategic financial services partners make a lot of sense for the type of business we’re building.” Wealthsimple plans to use the investment—and its partners’ credibility—to expand its product line beyond investing, savings and trading, said Katchen, and to move into more markets as it plans an IPO within the next few years.

article-aa

The robo-adviser fintech increased its AUA by over $900 million in the first three months of 2019. Over the same period, Power Financial and its subsidiaries invested an additional $30 million, bringing the firm’s total voting interest in Wealthsimple up to 88.6 per cent. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: Wealthsimple is growing, in part, because of its new offerings like Wealthsimple Invest, Wealthsimple Save, Wealthsimple Trade, Wealthsimple for Advisors and Wealthsimple for Work. Earlier this month, CEO Michael Katchen spoke with David about the company’s push for open banking in Canada. The same day, the firm launched a foundation to help one million low-income children save for school. All these new offerings—not to mention the marketing spend accompanying them—require a fair bit of cash. Power Financial is providing that money. So far, the firm has invested $238 million in the fintech.

Clarification: This story has been updated to clarify Power Financial’s 88.6 per cent voting interest.

article-aa

The robo-advising firm said families can sign up for Registered Education Savings Plans (RESPs) from home in 10 minutes in lieu of signing up at a bank. Wealthsimple said this will help low-income families and it hopes to reach one million children within 10 years. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: The RESP market has largely not been disrupted in Canada, even though there’s a lot of money to be made in those investment vehicles. RESP money is tax-free, and the government will contribute up to $7,200 in matching funds. Wealthsimple relaunched its RESPs in March 2017, promising a simpler investing process. Reaching low-income families isn’t just about making the process simpler—although millennial parents may prefer the ease of online services—it’s also about reaching people who typically use fewer banking services. One thing that may help Wealthsimple reach that group is a new partnership, as part of the foundation, with Pathways to Education, an organization that provides scholarships for post-secondary education and mentoring for low-income kids.

article-aa

The financial technology firm had $3.4 billion in assets under administration (AUA)—the amount of money being invested through the platform—as of Dec. 31, 2018, compared to $1.7 billion the previous year, according to parent company Power Financial’s annual report. Wealthsimple—not yet five years old—now has over 100,000 clients. (The Logic, with a h/t to the reader who spotted it)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: Wealthsimple’s growth has been fuelled partly by a flurry of product announcements in new areas. It launched a white-label option for financial advisers in 2016, and group retirement plans for employers the same year. And, the company’s figures are likely to see a significant boost from its most recent launch, a stock trading app for users who want to make investment decisions proactively, rather than leaving them to the platform’s algorithms. Wealthsimple won’t charge a commission—an attractive proposition to the millennial first-time investors that have been its core demographic so far.

article-aa

Karney Li has worked at Wealthsimple since 2015, during which time the company rapidly expanded its customer base, moving into the U.K. and developing investing platforms targeting segments like socially-responsible investing. Li’s Instacart team will build the products and APIs that help its partners launch and maintain their Instacart storefronts. (BetaKit)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: This is the first major hire for Instacart in Canada, after the company announced last year that it would be expanding its Toronto office to 200 people to focus on research and development. Li will be responsible for the company’s retail engineering division, and should have a wealth of talent to tap into—Toronto is one of the top five markets in North America for high-quality tech talent, according to the CBRE. Instacart is set to open the new office this year as the grocery-delivery space heats up in Canada; the company has become a key delivery partner for grocery chains in Canada hoping to compete with Amazon, like Loblaw and Walmart, and it recently added luxury grocer Pusateri’s to its roster of Canadian partners.

article-aa

Independent advisers will operate under the robo-adviser’s brand, and build portfolios for clients that include both exchange-traded funds (ETFs) and mutual funds. Advisers will now be able to use the company’s technology while still managing their clients’ funds themselves, which was not previously possible. Wealthsimple—which is controlled by insurance giant Power Corporation—also launched savings accounts last April, and has offered group retirement plans since 2016. (Globe and Mail)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: This is a lateral move for Wealthsimple, the core product of which is a robo-adviser platform that lets retail investors buy combinations of ETFs online. The company’s diversification efforts come as traditional financial institutions aggressively move onto its turf—Royal Bank of Canada launched a robo-adviser service in November, while TD Bank and U.S. giant Vanguard will debut theirs in the coming months.