“The future is coming, whether the banks are ready for it or not,” Wealthsimple co-founder and chief product officer Brett Huneycutt proclaimed yesterday before a hometown crowd at Evergreen Brick Works during the company’s inaugural product showcase.
At the first Wealthsimple Presents, the Toronto FinTech firm revealed new banking products with fewer fees and without the branch visits required by its incumbent competitors. These included the company’s first credit card, an instant line of credit, an expanded chequing account, and home bank draft, cheque, and cash deliveries.
On stage, Huneycutt spun a vision of a future when Wealthsimple “negotiates rates for you, builds and adjusts your portfolios as your life situation changes, minimizes your taxes, makes payments, [and] transfers money,” and hinted that the next edition of Wealthsimple Presents, slated for this fall, will focus more on investing.
Wealthsimple aims to become “the one-stop shop for financial services for Canadians.”
In an interview with BetaKit afterwards, Huneycutt outlined the company’s vision for the future of banking and investing in more detail, teased that it has been thinking about insurance, and shared where yesterday’s announcements put Wealthsimple on the path to being “the one-stop shop for financial services for Canadians.”
“I think we’ve taken a big step forward today with ‘The End of Banking,’” he said, referring to the branding of the event. “But there’s a lot of stuff that we don’t yet offer that we’d like to, so there will be a lot more to come,” he said.
Since its launch as a robo-advisor in 2014, Wealthsimple has broadened its investment capabilities and moved into other areas of money management. Wealthsimple now offers investing, crypto, tax filing, spending, and saving products. The company, which is majority owned by Power Corp. affiliates, relies on partnerships with banks to offer banking services and hold and guarantee its deposits. It has become profitable, amassed more than three million clients, and was most recently valued at $5 billion CAD.
When Wealthsimple initially launched both its robo-advisor and brokerage, Huneycutt said “The perception in the market was that we were for beginners or for early investors and only young people.” The company has worked to change that in recent years, and Huneycutt believes its efforts to woo other groups, including wealthier clients, have proven successful.
“The numbers that we’ve announced speak for themselves in terms of the amount of deposits that we’ve been able to accumulate,” he said.
Wealthsimple held $73 billion in assets under administration (AUA) as of March 31, after more than doubling since the end of 2023, when its AUA was $31 billion, per Power Corp. reports.
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At the event, Wealthsimple introduced a combination of brand-new products and some expanded capabilities for existing offerings, including mobile cheque deposits.
Huneycutt noted that unlike the banks the company is competing against, Wealthsimple does not have expensive branches to operate.
“The way that we are able to offer better prices to our customers is that we operate at a much lower cost structure,” he said.
Wealthsimple intends to bring some of the services that banks only offer in person directly to customers’ doors. As Huneycutt said on stage, “We think that everything that you do in a branch you should be able to do wherever you want.”
Earlier this week, Wealthsimple senior product director Sam Newman-Bremang told BetaKit that the company is also betting that chequing account and credit card users are more likely to invest through its platform and leverage its other products.
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When asked if Wealthsimple views its chequing account and credit cards as potential loss leaders for the business, Huneycutt emphasized that Wealthsimple tries to think of its client relationships holistically when it comes to unit economics.
“Not every individual product needs to be hugely profitable,” Huneycutt said—though he does believe credit cards could prove very profitable for Wealthsimple over the long run.
At the next Wealthsimple Presents, the company intends to replace its robo-advisor with more sophisticated and personalized trading capabilities, offer access to new private markets, and share some crypto-related product news, among other things.
“Not every individual product needs to be hugely profitable.”
Brett Huneycutt
“There will be more to say about how we’re killing our robo-advisor and reinventing it into something much better,” Huneycutt said, indicating that Wealthsimple is also working to ensure that its brokerage offering is both more “compelling and complete.”
Wealthsimple could face more competition on this front soon from one of its larger American peers: US trading platform Robinhood Markets recently struck a deal to buy Toronto crypto company WonderFi and shared plans to develop its offering in Canada.
Huneycutt said he is not worried about the threat of Robinhood coming to Canada. He said he is confident in the suite of products Wealthsimple has developed, and embraced the idea of more competition.
“I’m excited for the energy it will bring to the market and our team to make something better for our clients,” he said.
“In general, our view is [that] the financial services market in Canada is not very competitive,” Huneycutt added. “It will benefit from more competition, and so I think it’s exciting for the market and for us, that another international player is interested [in Canada].”
As to what Wealthsimple’s product roadmap might look like beyond refining its approach to investing, Huneycutt told BetaKit that he believes the company could do more when it comes to mortgages—where it has been partnering with Toronto-based digital mortgage provider Pine—and indicated that insurance is another big vertical that the firm has been thinking about.
Feature image courtesy Wealthsimple.