How many digital investment managers can claim to have wowed Canadian PM, Justin Trudeau at their HQs in May 2017 with their ability to stake claim to an elephantine 80% share of the Canadian market in just over three years of operation?
Just one, Wealthsimple.
We were fortunate to nab an interview with the firm’s dynamic CEO, Toby Triebel, the firm’s European torch-bearer as they plot their route to a successful regional launch. We touched base on the journey to building traction in new markets, why the term ‘robo-advisor’ may be doing more harm then good and why complacency is a cost London cannot afford in the aftermath of Brexit.
FTC: Wealthsimple is a Toronto-based online investment management firm launching in the UK this September and you are at the helm of the journey. Can you outline Wealthsimple’s path to development in Canada and why the firm has opted to tackle the European market, particularly in the wake of Brexit?
TT: Wealthsimple was born out of the idea that everyone should have access to high-quality financial products and advice, no matter their age or income. When we started the company in Canada the idea of automated investing was still a novel one. Premium fees charged by financial advisors, along with account minimums for access to services, were barriers for people looking to invest and those that were investing paid too much for it. To change this, we built a product that combines user-friendly digital tools and on-demand personal financial advice that makes smart investing transparent, accessible and affordable.
Three years later, we now have over 80% market share in Canada and serve 40,000 clients globally with over £750 million in assets under administration. To celebrate this milestone we hosted Canadian Prime Minister Justin Trudeau at our headquarters in Toronto in May of this year.
Our aim has always been to become a global financial company but we knew that before launching in another country we wanted full confidence in the product, team and service we were introducing. In January we made the decision to launch in the US and in September we introduced Wealthsimple to the UK.
The UK has always been part of our long-term plans as there are a lot of people who are being underserved by the financial services industry, including 5.5 million UK residents who have a bit of money to invest but no access to financial advice. Ultimately, our goal is to be a global financial company that provides great investment tools and advice to investors all over the world. Our launch in the UK is an exciting step towards this goal and we've already seen great traction from early adopters.
FTC: Where do you stand on the ‘human vs. robo’ advisor debate as it pertains to investment management. Do you favour one approach over the other?
TT: At Wealthsimple, we think of ourselves as combining the human element with technology. We don't love the term 'robo advisor' as we're a team of people. As a business we use technology to build a product that is simple and intuitive to use, and while you can easily sign up and fund your account in five minutes through your mobile phone or computer, we think we stand out from the crowd by allowing any client to speak directly with our team of investment advisers whenever they want. You can't take the human side out of technology if you want to build a truly exceptional product.
FTC: Where do you think the city you are based in ranks now, among the various global fintech hubs and what do you think will be the effect on London as the world’s leading FinTech hub post-Brexit
TT: London has traditionally been an international hub for finance but Brexit creates an opportunity for other European cities to challenge this position. We shouldn't be complacent in London retaining its status as an international hub for Fintech.
Berlin, Lisbon and Stockholm all have expanding technology sectors that have benefited from activity in the greater EU region. We're going to start seeing more activity and opportunity in these cities that will attract established Fintech companies and encourage the founding of more local startups as well.
It remains to be seen what arrangements will be put in place and what effect it will have on companies established, or looking to establish their business in the UK.
FTC: Passporting rights and concerns over attracting and retaining talent are by far the most concerning aspects of a post-BREXIT society for UK fintech executives. What do you think the mid-to-long term consequences of the leave vote will be for UK FinTech?
TT: We're already seeing a trend of Fintech companies setting up multiple teams across the EU, with a focus on building agile outposts that will be able to support a company's headquarters whether that be in London or elsewhere.
In the short term the leave vote allows an accelerated opportunity for growing Fintech hubs in the EU to attract international companies looking to launch and provide greater access to local talent. My opinion is that in the long-term we will see a redistribution of fintech clout that is more balanced throughout the region versus being concentrated in one central hub. Companies will have to be strategic in understanding where their product has the best opportunity and regulatory environments will additionally have more influence when it comes to attracting global companies by providing a strong ecosystem to grow a business.
The potential loss of passporting rights through the Brexit vote has already had an impact on company's business plans, with companies regulated in the financial services space having to secure access to the single market through European subsidiaries.
FTC: This year you will take part in the all-new FinTech Founder’s Forum as a keynote panellist and advisor. What is the one key point that you would share with budding entrepreneurs aiming to transform the financial sector?
TT: Collaboration is the key to drive impactful innovation. The Fintech industry depends on traditional financial institutions like banks to exist, and similarly banks need to adopt a startup approach when it comes to product and service delivery in order to compete in the consumer market today. I don't see either succeeding without the support from both sides of the industry coming together.