Canadian fintech success story, Wealthsimple, is expanding into the United States, the company announced today. Backed by $50 million in funding from Power Financial Corporation group, a management and holding company, Wealthsimple’s services will now be available to U.S. residents in all 50 states, via wealthsimple.com, or by downloading the company’s iOS or Android app.
Based in Toronto and founded just over two years ago by 29-year-old Michael Katchen, Wealthsimple’s mission was to provide financial guidance at a price lower than most other financial institutions, including Canada’s big 5 banks. One of the biggest reasons why Wealthsimple took off as a fintech company, was because of it’s model that encouraged Canadians with any level of net worth, whether $100 or $100,000, to invest.
“We think pretty big and our ultimate vision is to help everyone in the world meet their financial goals and live the life they want to live. Coming to the US means millions of more people can now use Wealthsimple and we’re that much closer to achieving our mission,” Katchen told VICE Money.
Canadians pay some of the highest fees in the world when it comes to investing — the average fee collected by a wealth manager to invest in say a mutual fund, is 2.5 percent in Canada, as opposed to just 0.8 percent in the States.
Recently, Canada’s big banks, realizing the competitive threat that fintech companies like Wealthsimple pose, have set up their own robo-advisors — National Bank’s Nest Wealth and BMO’s SmartFolio all aim to encourage investing, regardless of age or net worth, at a very low cost. Robo-advisors, for those who are unfamiliar with the term, are basically online wealth management programs (or apps) that provide automated, algorithm-based portfolio management advice without the use of human financial planners.
“Investing for most folks is this scary, overwhelming, complex thing. And unless you have a ton of money you really can’t access great advice. We’re trying to democratize access to really high-end, sophisticated advice — at a low cost,” Katchen told the Financial Post in a 2015 interview, when the company was still in its early stages of growth.
Wealthsimple has over 20,000 users right now, with $750 million in assets. 85 percent of its clients are under the age of 45, which speaks to Wealthsimple’s business model that does not discriminate users based on how much money they have to invest.
Katchen was in the news this past weekend for taking a stance, along with other tech company executives, on Trump’s travel ban, that prevents immigrants from seven countries — Iran, Iraq, Syria, Sudan, Somalia, Libya and Yemen — from entering the United States. In a statement issued two days ago, Katchen asked the federal government to provide visas to people displaced by Trump’s executive order.
“I don’t think the travel ban directly affects anyone on our team, but have made it clear to our employees that if it does, we will be 100% supportive in any way we can be, including ensuring this does not impact their work at Wealthsimple. This will also in no way impact our recruitment strategy, which is to hire, train and mentor the very best people we can find, no matter where they were born,” Katchen told VICE Money.
Cover: CNW Group/Wealthsimple