Wealthsimple to spin out advisory service into separate company


Toronto-based FinTech startup Wealthsimple is separating its direct to consumer and Wealthsimple for Advisors businesses and will transition the advisor-focused offering to a new company, BetaKit has learned.

“We’re currently focused on identifying the right partner to support your business on a future platform.”

Wealthsimple for Advisors is the company’s automated management platform targeted toward financial planners, investment advisors, portfolio managers, and dealers. The company announced the news to separate the entities in an email obtained by BetaKit and sent to clients on Monday.

Wealthsimple plans to announce the move on Tuesday morning. In a statement to BetaKit, the company noted that Wealthsimple for Advisors will transition in the coming months, and is currently looking for partners to support advisors on a new platform.

“We are at a pivotal stage in our business where we have a very real, very unique, once-in-a-generation opportunity to transform financial services for Canadians,” said Michael Katchen, co-founder and CEO of Wealthsimple, in the statement to BetaKit. “To take full advantage of that opportunity, we need to be laser-focused on delivering transparent, accessible financial services to consumers, both directly and in collaboration with our institutional partners.” 

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Wealthsimple called the new company a strategic decision to help further its vision of becoming the primary financial institution of its users through a suite of direct to consumers services, as well as institutional partnerships.

The Wealthsimple for Advisors platform allows advisors to streamline client onboarding, account management, and compliance through front- and back-office solutions. The service launched in May 2016. The company said this most recent move allows its advisor platform to focus exclusively on serving financial advisors, which currently consists of hundreds of advisors.

The platform allows the advisor to retain full ownership of the client relationship and allows advisors to set the fee that a client pays, charging up to a 0.35 percent management fee. J-F Courville, who has been heading up the advisor-targeted business since May 2018, will continue to lead Wealthsimple for Advisors as CEO.

“Over the past three years, we’ve had the unique opportunity to build a platform to support you as you serve your clients,” the company wrote in the emailed statement. “During this time, we’ve also had the opportunity to learn from you and to see firsthand the incredible value you provide to your clients every day. We believe that there is a tremendous opportunity for technology to enhance your work, and to help transform your business.”

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“We’re currently focused on identifying the right partner to support your business on a future platform that is capable of delivering a seamless client experience with even more features and services for you,” Wealthsimple said in its email to customers. “We are committed to supporting you during this period of change and to making your transition process as smooth as possible.”

Wealthsimple has expanded its product offerings over the last year and a half, launching its trading service in the summer of 2018 and growing to attract high-net-worth investors through a partnership with Grayhawk Investment Strategies and the launch of a premium service. In January, Wealthsimple launched Wealthsimple Advisor Services Inc., a mutual fund dealer firm that offers Wealthsimple’s technology to advisors, similar to how Wealthsimple for Advisors operates for financial planners.

The news of the new comapny comes two months after Wealthsimple announced it had acquired SimpleTax, a web-based tax preparation app, and seven months after Wealthsimple raised a $100 million investment round led by Allianz X.

Wealthsimple plans to continue to support advisors and their clients during the transition, which is expected to be complete before the end of 2020.

Image courtesy Wealthsimple. With files from Meagan Simpson.

Isabelle Kirkwood

Isabelle Kirkwood

Isabelle is a Vancouver-based writer with 5+ years of experience in communications and journalism and a lifelong passion for telling stories. For over two years, she has reported on all sides of the Canadian startup ecosystem, from landmark venture deals to public policy, telling the stories of the founders putting Canadian tech on the map.

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