Toronto-based fintech Wealthsimple pulled in $17 billion in net inflows last quarter, its best result ever, and it’s thanks to the company’s ongoing monthly million dollar giveaway contest, according to a report from Investment Executive.
The Monthly Millionaire program launched in May, as a way to get people to sign up. Clients register, open a chequing account and get 500 entries. Every dollar added in net deposits earns another entry, while setting up direct deposit doubles your total, and a successful referral adds 5,000.
So where the heck did the marketing idea come from? It was inspired by the United Kingdom, as Britain’s Premium Bonds program has been running for 70 years and works on the same logic: no interest paid, but every pound held gets entered into a monthly prize draw. So basically you trade guaranteed returns for a shot at a payout.
Wealthsimple’s chief growth officer Simon Lejeune told Investment Executive the company was pouring money into Facebook and Google ads and decided to redirect it. He said he wondered why they couldn’t take that budget and put it back into clients’ pockets, and that these campaigns are far more efficient than traditional marketing.
As for some numbers, that $17 billion quarter is up roughly 55% over the previous three months. For comparison, RBC brought in $9.8 billion in net new assets across its entire wealth management business in its second fiscal quarter.
Wealthsimple crossed $155 billion in assets under administration on June 30, up 24.7% from March and 84.1% year over year.
Now, Wealthsimple isn’t alone in throwing cash at new clients. Competitors such as Qtrade offers up to $2,000 for transfers of $200,000 or more. TD Wealth spent the summer paying $1,000 to clients who opened two or more eligible accounts and moved at least $150,000 over, while everyone is reimbursing transfer fees.
Lejeune said Monthly Millionaire got a million clients to act faster than any campaign the company has run.
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