Wealthsimple is based out of Toronto, founded by 27-year old Michael Katchen, who wants to make investing easy for today’s mobile generation. The recently launched iPhone app allows new users to register right on the iPhone to fund a TFSA, RRSP or non-registered account to invest in ETFs. It’s currently featured under the ‘Best New Apps’ category in the App Store.
The app can easily develop a “personalized, low-cost portfolio” of Exchange Traded Funds (ETFs) for clients right on their device. The app’s Wealth Concierges—registered Portfolio Managers with the Ontario Securities Commission—are reachable via email, text, call or video chat to answer any investment questions.
The benefits of Wealthsimple being virtual and paperless allows the startup to only charge a 0.5% management expense ratio (MER) annually, compared to rates of 2% and higher from big banks. Katchen says “Investing is way too expensive in this country. Canadians pay the highest investment fees of any country in the world.”
What’s New in Version 1.1
Say hello to simple signups!
You can now open and fund a Wealthsimple TFSA, RRSP, or non-registered account from your phone. No more paperwork or trips to the bank branch, we are the first investment company in Canada to let you open an account from your phone.
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The app includes a passcode lock for security along with Touch ID support. The company says they are the first investment company in Canada to enable opening of new accounts from a smartphone.
The startup’s founder told The Financial Post it has 1,000 clients (minimum investments are $5,000), but among them some have multi-million dollar accounts, highlighting “Eighty per cent of our clients are under 45 years old, which is the inverse of a traditional advisory practice.” Wealthsimple’s client base, according to Katchen is growing at the rate of 20 percent per week.
When people doubt whether they can trust their money inside a company like Wealthsimple, Katchen explains the startup can’t touch its clients’ accounts, but only provide trading advice; all accounts are insured up to $1 million by the Canadian Investor Protection Fund.
The startup also has some notable investors and advisors, including the former CEO of Assante Wealth Management, Joe Canavan, and Roger Martin (formerly with Rotman School of Management at the University of Toronto), to which Katchen says “this isn’t a startup team.”
Back in April, the startup received $10 million in Series A funding from Power Financial Corporation, with possibly $20 million coming next year.