“We always say that Canada doesn’t need another bank, it needs something better. I think that’s what we aspire to do,” says Wealthsimple CEO and co-founder Michael Katchen. Patrick Ryder
Michael Katchen, CEO of Wealthsimple, is optimistic about the future of his online investment management platform and the financial prospects of its young user base. However, he expresses concerns about Canada's increasingly unaffordable housing market, growing innovation gap, and declining productivity. Wealthsimple, managing $30 billion in assets, was established after Katchen's first startup, 1000memories, was sold to Ancestry.com in 2012. Following the sale, Katchen and his co-founders sought to maximize their earnings, prompting him to develop financial models and teach his friends about investing. Their positive response led to the creation of Wealthsimple, aiming to simplify investing for individuals overwhelmed by the complexities of traditional financial tools.
Nearly a decade later, Wealthsimple has become one of Canada's most successful software startups, with three million Canadian users, half of whom are first-time investors. The platform, serving one in every five Canadians under the age of 40, has amassed $30 billion in assets under management. Katchen attributes the platform's success to addressing a personal problem and offering a solution that resonates with young Canadians who seek a different financial experience from traditional banking institutions.
Before founding Wealthsimple, Katchen lived in San Francisco but chose to return to Toronto due to his pride in being Canadian and personal reasons, including his relationship. He started the company from a studio apartment, where he and his co-founders worked tirelessly to launch the platform. Despite the challenges of starting a business, Katchen's partner was supportive and accommodating.
Wealthsimple's focus on younger Canadians stems from the founders' desire to address a personal problem rather than a strategic decision to target a specific demographic. However, the platform's emphasis on simplicity and accessibility has resonated with young Canadians seeking a different banking experience. Katchen believes that empowering younger generations financially is crucial for Canada's long-term prosperity.
Housing affordability is a significant concern for many younger Canadians, and Katchen acknowledges the challenges it poses to the country's economic growth. Wealthsimple has taken steps to address this issue by launching the First Home Savings Account and expressing interest in offering mortgages. Katchen envisions Wealthsimple's mortgage offering to be simple, accessible, and aligned with the platform's mission to provide a seamless financial experience.
While Wealthsimple offers a range of banking-like products, Katchen believes the platform offers something better than traditional banks. He emphasizes the importance of using artificial intelligence (AI) to enhance productivity and anticipates AI becoming ubiquitous in the financial industry. Despite being labeled a robo-adviser, Katchen believes AI is a powerful tool that can improve financial management and productivity.
Wealthsimple's evolution from a wealth management platform to offering brokerage services was driven by the founders' desire to empower users to manage their finances independently. Despite concerns about speculative investing and the recent surge in equities and crypto, Katchen is proud of Wealthsimple's performance and commitment to providing users with relevant information to make informed decisions.
Finally, Katchen encourages aspiring entrepreneurs to take action and start building their ideas without hesitation. He believes that hands-on experience is invaluable and that the first few months of entrepreneurship can teach more than years of planning. Katchen's journey with Wealthsimple reflects his commitment to innovation and his belief in the potential of Canada's entrepreneurial ecosystem.
