We started from the bottom now we’re here. Who’s we? Wealthsimple is the new kid on the fintech block kicking butt and taking names. If you haven’t heard of Wealthsimple, they’re only the biggest online investment and trading platform in the country. They’re on a mission to make “financial freedom a fundamental human right,” starting with Canadians. It all began with one clever Canadian boy. Then, add one super simple idea and a dash of that Silicon Valley magic fairy dust, and poof! A $5 billion dollar financial revolution is taking Canada by storm. But you need a little more than brains and bootstraps to earn that kind of street cred. Co-founder and CEO, Michael Katchen, has friends in high places. Who owns Wealthsimple? Let’s take a look at Wealthsimple’s origin story and the investors helping turn his dream into reality.
Wealthsimple: how it started
What do Ancestry.com and Wealthsimple have in common? Canadian wunderkind, Michael Katchen. Like many tech visionaries before him, Katchen began his journey in the heart of Silicon Valley. He worked for online-based company, 1000Memories; a site that allowed people to create a digital scrapbook of old family photos and memories they could use to build a family tree.
By 2012, 1000Memories was bought by Ancestry.com. In case you live off the grid, Ancestry.com is only the world’s largest genealogy company, no big deal. Shortly thereafter, Katchen’s co-workers started coming to him for investing advice. So he built a spreadsheet to teach them how to create their own investment portfolios without going through an expense advisor.
The spreadsheet was a hit. Such a hit, in fact, it inspired Katchen to build a company that made investing easy and accessible for everyday people. Wealth shouldn’t be scary, complicated, or reserved for the upper echelons of society. Wealth should be available to everyone, and it should be simple. In September 2014, Wealthsimple was born.
Katchen moved back to Toronto to turn that simple idea into something special. By 2015, he acquired Canadian ShareOwners Investments Inc, a discount trading brokerage. And he gained $400 million dollars of managed assets and 10,000 customers in the process. It wasn’t long before Wealthsimple caught the eye of heavy-weight management and holding company, the Power Corporation of Canada.
Power who? You might not have heard of the Power Corporation of Canada (POW). But maybe you’ve heard about the powerhouse family behind POW? Montreal’s own Desmarais family. In 1968 Paul Desmarais bought Power Corporation from founders Arthur J. Nesbitt and Peter A.T. Thomson. From there, Paul grew the company into a juggernaut, holding just shy of $630 billion dollars in assets. They currently own over 70% of Wealthsimple.
Before his passing in 2013, Paul Desmarais was the 4th richest person in Canada. His family has connections to Canada’s political elite. According to Forbes, his personal net worth tipped the scales at $5.81 billion dollars. But if you’ve never heard of Paul Demarais before, maybe you’ve heard of Wealthsimple’s other investors.
Ryan Reynolds and Canadian national treasure, Michael J. Fox, have joined the star-studded list of private investors. On May 3rd 2021, Katchen announced on Twitter that Wealthsimple had just raised one of the largest investments in Canadian history, a whopping $750 million dollars; closing the Tweet with “Oh, and did we mention @Drake chipped in?” Even Canada’s beloved rap prodigy has invested in Wealthsimple, pushing their valuation to an impressive $5 billion dollars.
Wealthsimple: how it's going
From little acorns do mighty oaks grow. What began as informal investing advice from one co-worker to another has grown into Canada’s largest online investing and trading platform. They started with a singular mission; to make financial freedom a human right.
Wealthsimple has leveraged the golden age of technology to provide smart, simple and elegant financial tools available to everyone, “regardless of age, net worth, background or education.” It doesn’t matter if you have one dollar or one million of them, Wealthsimple has removed the complicated and overwhelming systemic barriers that previously stood between regular people and financial independence.
They started with their marquee product, Wealthsimple Invest. For the first time, anyone with any amount of money could invest in the stock market with just a few taps of a button. Wealthsimple Invest offers its clients low-cost index investment portfolios tailored to their goals and risk appetite. Their fuss-free process asks you a few simple questions, then automatically designs the perfect portfolio for you.
Do you even know what “index investing” is? It doesn’t matter. Wealthsimple has taken the stress-inducing process of investing your money into something you don’t fully understand and made it easy, elegant and empowering. Your portfolio is built with a robo-advisor, cutting-edge computer software that uses math and trend analysis to put “your money to work like the world’s smartest investors.” And they include real human advisors to make the most of your investment.
Sounds pretty amazing right? You’re not the only one who thinks so. Currently, Wealthsimple boasts over 1.5 million investors; everyday people like us. And they manage about $8.4 billion dollars of assets. That’s a lot of cheddar. So they expanded their platform to become your one-stop personal finance shop. Wealthsimple now offers a diversified line-up of products to help you bring home even more bacon. Let’s take a look.
What does Wealthsimple offer?
Wealthsimple Invest
Wealthsimple Invest is a robo-advisor product that automates investing. You simply answer a few questions to determine your risk tolerance and financial goals. Their computer software creates a personalized portfolio of Exchange Trade Funds (ETF), so your money is invested across the entire stock market. And it only takes 5 minutes.
Wealthsimple Trade
Wealthsimple Trade offers commission-free stock trading. If you’re a more hands-on investor and prefer to manage your own portfolio, you can get started with as little as $1. Low account fees keep more money in your pocket, helping you grow your wealth faster. For $3 a month, you can upgrade to Trade Premium for real-time prices and instant deposits up to $1000. The Wealthsimple Trade platform is one of the most popular in Canada.
Wealthsimple Cash
Wealthsimple Cash is Canada’s answer to Venmo. They’ve introduced a new peer-to-peer payment platform. You can send money to friends and family instantly through the app. It’s completely free to use and you can even make money by referring your friends. Did I mention the prepaid card? You can sign up for a prepaid card linked to your Wealthsimple Cash account.
Wealthsimple Crypto
Wealthsimple Crypto offers cryptocurrency trading through their federally regulated trading platform. You’ll find this feature inside Wealthsimple Trade. There is no minimum deposit to get started and there are 24 popular coins to choose from. You’ll pay a small operations fee when you buy or sell crypto, but you’ll never be charged to move your Canadian funds on or off the platform.
Wealthsimple Tax
Wealthsimple Tax offers simple, easy-to-use tax filing software for those who like to do it themselves. They guarantee a maximum refund and will even pay you the difference if someone else gets you more money. The best part? You decide what to pay when you file with Wealthsimple Tax, even if it’s $0.00. If you upgrade your account, you’ll get access to audit and priority support.
Final thoughts
I’m a former banker with about 10 years of experience under my belt. The most important thing I learned working with Canadians from all walks of life is this; it’s not how much you make, it’s how you manage it. So when a company like Wealthsimple comes along and says to hardworking people “hey, you deserve better,” I get weak in the knees. Wealthsimple’s passion for people and staggering success has made one thing clear; invest in people, and the universe will pay you back in dividends.
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About The Author: Heidi Unrau
Heidi Unrau is the senior Finance Journalist at Hardbacon. She studied Economics at the University of Winnipeg, where she fell in love with all-things-finance. At 25, she got her first bank job as an entry-level teller. She moved up the ranks to Credit Analyst, Loans Officer, and now a Personal Finance Writer. In her spare time, you'll find her hiding in the car listening to Freakonomics podcasts, or binge-watching financial crime documentaries with a pint of Häagen-Dazs. When she's not chasing after her two little boys, she's in the hot tub or arguing with her husband over which cash back card to use for date night. She’s addicted to coffee, crypto, and obsessively checking her credit score on Borrowell.
Fun Fact: Heidi has lived in five different provinces across Canada, loves her free Tangerine bank account, and will never cut back on Starbucks. Like ever.
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