Wealthsimple wants to expand abroad

Photo: Jacques Nadeau Le Devoir
Michael Katchen, aged 29 years, gave birth to Wealthsimple counseling friends in their investments.

“We are still a new company,” said Michael Katchen. He is right. Wealthsimple, an investment service online, has been founded in 2014. But three years later, the toronto-based firm has more than a billion in assets under management. “Building the team, the values, the culture while building the business model… Manage the scope of our growth has been a challenge. “


Since 2014, Wealthsimple, arrival by the wave of “advisors robots” that are designed for investors in their twenties and thirties, the attention of the large institutions already established. The Financial Power has so far injected $ 100 million into the company, which gave him a controlling interest. It is now heading to Europe, starting with Britain, having opened an office in the United States at the beginning of 2017.


“Too many canadian companies are forced to build a small canadian company,” says Mr. Katchen, co-founder and chief executive officer, transition in the offices of the Duty on Monday. “The country should think bigger and see the opportunities for building large international companies. Especially in technology and innovation. Borders count less and less. […] It is difficult, but so far it’s going well. “The u.s. market is the largest, most competitive,” he said. The competitors, the giants appointed as Betterment, Wealthfront and Vanguard, are ” faster, more sophisticated “.


The board robot is part of the emergence of a new species of financial products based on the evolution of technologies. The phenomenon is also manifested in the field of insurance, lending and payments.


Dominant player


Wealthsimple occupies about 80% of the market in which it is located in Canada, one of the investment online. Its business model, that banks are in the process of copy, is to offer customers the opportunity to invest in a combination of Exchange-traded funds, whose management fees are lower than mutual funds. The rebalancing of assets is done automatically. Unlike some players in the american market, Wealthsimple offers access to a human being, a requirement that the canadian authorities require all investment companies.


The idea of Wealthsimple is coming when the california-based company which employed Mr. Katchen and friends, 1000Memories, has been sold. His friends have received the money and, knowing his passion for investment, have asked him to propose ways to put these are. Excel file to support, they proposed combinations of Exchange-traded funds. These friends are now clients of Wealthsimple and employees of the company. The average client has about 35 years, ” he said.


The presence of Power


The first boost of Power came in the spring of 2015, at a time when the word “fintech” was on all lips. The agreement provided so that Power injected 10 million in the company reserving the option to put 20 million more over 12 months, and more in the following three years. At this time, Wealthsimple had approximately 1,000 customers, a figure that is multiplied by 50 by the result.


“As a new company in the financial services, people were asked to entrust us with their savings. It’s big, ” says Mr. Katchen, age 29 years. “In the beginning, people were telling us “how many clients do you have ?”, “how many assets do you have ?”, “what is your history ?”. We had nothing of it. It was very difficult to convince people to trust us. It is easier today. The Bank of Montreal celebrates its 200th anniversary. It was not that. People trust banks because they are large and old. We are trying to build trust in another way. “

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