Estimated valuation: Not available

Product: Digital financial services

IPO Timeline: TBD

Date Founded: 2014

Wealthsimple, founded in 2014 by Michael Katchen, conquered the robo-advisor arena in Canada and is now taking on U.S. millennial investors. Wealthsimple is a low-fee digital financial advisor whose platform offers broadly diversified investments and access to human financial advisors. With zero minimum investment required to sign up and the first $5,000 managed for free, this platform is making a splash in the crowded robo-advisor field. After the initial $5,000, you’ll pay 0.50% of assets under management (AUM) up to $100,000.

Targeting Young Investors Humorously

Wealthsimple is trying to lure users with its provocatively-headlined articles like When Am I Too Old to Ask My Parents for Money? and the average Wealthsimple user is 29 years old. Despite offering a predominantly digital platform, the company strives to provide a true human presence. Akin to SoFi, Wealthsimple hopes to provide more than a digital experience, including offering events, physical spaces and related offerings to clients.  

Wealthsimple's offerings have a lot in common with its robo-advisory brethren. It claims to offer a “smarter portfolio” and promises low-fee funds diversified to meet clients' financial goals. The Wealthsimple ETFs cover the following asset classes and market sectors:

The firm also offers socially-responsible portfolio choices for investors looking to do good with their dollars.

A medium risk-diversified corporate bond portfolio seems to be lacking in Wealthsimple's investment offerings. Its bond offers appear to be bifurcated: high-yield bonds are a risky class while government and inflation-protected bonds are very conservative. A middle-of-the-road bond ETF as an option doesn't seem to exist.

Fees and Pricing

Wealthsimple promises simple pricing. The company’s fee structure compares favorably with most traditional financial advisors pricing models. The zero account minimum is compelling as is the free account management for your first $5,000 invested. The firm doesn’t charge any trading, account transfer or rebalancing fees.

The Wealthsimple Basic account management fee for AUM values up to $100,000 is 0.5%. When your account surpasses $100,000, you move into the Wealthsimple Black class with a lower 0.4% management fee and added benefits. Wealthsimple Black customers enjoy added features such as access to tax-loss harvesting and VIP airline lounge use.

When investing with Wealthsimple you get a personalized, diversified portfolio of low-fee ETFs allocated towards your personal risk level. When your investments deviate from your preferred asset allocation, they are automatically rebalanced. Any dividends are automatically reinvested.

Its socially responsible investment portfolios provide access to six ETFs with various laudable foci. For additional guidance with this option, you’re invited to speak with a portfolio manager. At present, you can set up a personal, Roth IRA or traditional IRA account.

Wealthsimple is capitalizing on the trend of hybrid financial advisors employing both automated and human financial advisors. Additionally, the company was recognized with a 2016 Webby for the Best Financial Services Website. (For related reading, see: Growth of Hybrid Robo-Advisors to Outpace Pure Robos.)

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