Mandeville, Smart Money introduce WealthPort service

Toronto-based Wealthsimple Financial Inc. has received fresh funding of $50 million from Montreal-based Power Financial Corp. to fuel its expansion in the U.S. and Canada as the robo-advisor firm announced that it now has 30,000 clients on its roster and $1 billion in assets under administration (AUA).

Power Financial, which has a substantial stake in Wealthsimple, has now invested a total of $100 million in the firm, which launched less than three years ago.

“[This is] a major testament and endorsement to our mission, which is to bring smart, simple, sophisticated financial services to everybody, regardless of where you come from or how much money you have,” says Michael Katchen, CEO of Wealthsimple, who spoke at an event at the firm’s headquarters in Toronto on Thursday with Prime Minister Justin Trudeau as the guest of honour. “In two years, we’ve built an entirely new category of investments in Canada, one that makes investing, easy and accessible for everyone.”

About 40% of Wealthsimple’s client base, Katchen notes, are first-time investors. Although many robo-advisors have sought to transform the industry inside out, Katchen casts Wealthsimple as more of a collaborator than a disruptor, with its moves to work with established financial services institutions, regulators and financial advisors to broaden their reach.

“Our approach has always been to partner,” Katchen says. “We often also partner with regulators across the country to help bring financial services into the digital era. Our story is really one of how startups, large companies, regulators and government can work together to support Canadians and bring innovation [here].”

In recent months, Wealthsimple has been on an ambitious streak, from pursuing an expansion south of the border to setting its sights on mass-affluent investors with a new tier of services — personalized financial plans and tax strategies — modelled after the offerings of traditional wealth-management firms but without the prohibitive management fees that may deter novice investors.

Read: Wealthsimple introduces premium service for mass affluent investors

Read: Wealthsimple launches to U.S. clients

Financial technology (fintech) startups such as Wealthsimple have found an ally in the federal government, which pledged to help these firms “realize their full growth potential” in this year’s federal budget.

“As one of Canada’s most innovative online services, Wealthsimple is an example of fintech innovation at its finest,” Trudeau says. “Hitting $1 billion in [AUA] is no small feat for any company, let alone one that’s only [more than] two years old. The success of this business has turned heads all over the world.”

In turn, Katchen extended Wealthsimple’s willingness to work with the government to help tackle issues such as retirement readiness, financial literacy and financial wellness: “We hope to work closely with your team to encourage financial education, good financial habits that would make Canada a leader in promoting financial wellness around the world.”

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