Wealthsimple launches crypto investing for group retirement funds

WS Crypto

Wealthsimple has launched a new cryptocurrency investment product, allowing for crypto investments through its group retirement fund product.

The launch is part of Wealthsimple Work, a division of the FinTech company that offers a Group Registered Retirement Savings Plan (GRSP) for companies. With today’s announcement, Wealthsimple claims to be the first-ever group retirement fund in Canada that allows people to invest in crypto.

GRSPs are employer-sponsored retirement savings plans, similar to an individual RRSP, but administered on a group basis by the employer. The employer makes contributions by payroll deduction, on a pre-tax basis.

“We’re seeing this massive trend of millions of Canadians transacting cryptocurrencies, talking about cryptocurrencies, and being interested in getting exposure to this asset class.”

Employers with GRSPs under Wealthsimple Work can opt-in for this new offering as of October 21.

“What Wealthsimple Work does is it brings a lot of the innovation that Wealthsimple has brought to individual investing into that group retirement space,” said Tim Kalimov, head of Wealthsimple Work.

“With all of the products that we launch, we obtain our mission, which is to help everyone achieve financial freedom, no matter who they are, or where they’re from, and I really view being ready for retirement as a core component of reaching financial freedom,” he added. “When a Canadian has access to a group retirement plan at work they are much more likely to be ready for retirement … and also to be saving and investing outside of a workplace plan.”

Wealthsimple Work has been available for a number of years after it was originally developed as a program for internal employees. However, the Canadian company began focusing more on marketing the product over the last year. Kalimov joined as head of Wealthsimple Work around a year ago, and told BetaKit Wealthsimple has doubled down on bringing the GRSP to market in that time. He also hinted at more Wealthsimple Work offerings are in the pipeline, but declined to provide details just yet.

According to its website, Wealthsimple Work is used by a number of employers across Canada, including Breather, Altus Assessments, and Sagard Holdings, the latter a notable Wealthsimple investor.

Individuals whose employers have a group retirement plan through Wealthsimple can now choose to make crypto exchange-traded fund (ETF) investments alongside a range of portfolio options, including socially responsible investing and Halal. Between one and three percent of the GRSP money can be invested into crypto ETFs, made up of Bitcoin and Ethereum. “The rest of your money is invested in the same type of globally diversified stocks and bonds as all our portfolios,” Wealthsimple stated.

While crypto investments cannot be held in retirement saving plans, as regulations work to catch up with the digital currency market, crypto ETFs can. Crypto ETFs are considered a more safe and reliable investment, as ETFs are a basket of securities that trade on an exchange and are considered qualified investments. Canada became the first country to approve Bitcoin ETFs when it approved Evolve ETFs and Purpose Bitcoin ETF earlier this year. In the United States, the Securities and Exchange Commission (SEC) approved its first Bitcoin ETF this week.

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There is now a handful of crypto ETFs in Canada, many of which are available through Wealthsimple. Canadian Bitcoin ETFs include those from Purpose, Evolve, CI Galaxy Bitcoin, and 3iQ.

Wealthsimple’s move into crypto for GRSPs comes as the digital currency is becoming increasingly popular among consumers, and, more notably perhaps, institutional investors.

“We’re seeing this massive trend of millions of Canadians transacting cryptocurrencies, talking about cryptocurrencies, and being interested in getting exposure to this asset class,” said Kalimov. “And we see this as an opportunity to bring an innovative product to market, like we’ve done in the past, but that will actually help get more people invested while getting exposure to a potentially transformational technology while doing so in a really risk-managed way.”

Risk management in investing is something Wealthsimple is focused on across the board, said Kalimov. He called matching that risk mitigation with getting more people exposed to investing Wealthsimple’s “secret sauce.”

With the crypto market still being a volatile one, with constant ups and downs, Wealthsimple expressly pointed to plans to ensure its crypto GRSP investing is risk-averse.

“If crypto prices skyrocket, retirement portfolios will automatically rebalance and reallocate your gains into more stable investments like stocks and bonds,” the company said. “In the event the entire crypto sector tanks, we’ll never liquidate your other retirement investments to buy more. So you get the opportunity for upside but limit your exposure to downside.”

Wealthsimple has been at the forefront of much digital platform investing in Canada. The startup works closely with the Canadian Securities Administrators, which has allowed it to test out technologies that sit outside of typical securities regulation. Through the CSA Regulatory Sandbox, Wealthsimple became the first regulated crypto exchange in Canada last year. In June, Wealthsimple was able to add 14 new tokens and cryptocurrencies to its consumer crypto trading platform.

Meagan Simpson

Meagan Simpson

Meagan is the Associate Editor for BetaKit. A tech writer that is super proud to showcase the Canadian tech scene. Background in almost every type of journalism from sports to politics. Podcast and Harry Potter nerd, photographer and crazy cat lady.