Betterment announced Thursday it has acquired Toronto-based robo-adviser Wealthsimple Inc.’s U.S. book of business, which manages $197 million in assets and more than 17,400 clients.
Wealthsimple will transfer all of their existing U.S.-based customers to Betterment, and will no longer support accounts based in the U.S, according to the announcement. Betterment will only be acquiring Wealthsimple's U.S.-based customers and their account assets; they will not be acquiring its technology, employees or operations as a part of this deal.
Wealthsimple accounts will be transitioned to Betterment by June. Meanwhile, Wealthsimple customers will have the option to opt out of this transfer.
Wealthsimple’s U.S. clients and assets sale represent a shift by Wealthsimple to focus on its core Canadian business, said Michael Katchen, co-founder and CEO of Wealthsimple.
The move makes sense for Wealthsimple, which manages 8.4 billion Canadian dollars and has more than 1.5 million Canadian users, as of October 2020. Wealthsimple has also grown its trading mobile app — Wealthsimple Trade — to more than 280,000 users since its launch in the Canadian market in March 2019.
“The U.S. robo-adviser space is far more competitive than the Canadian market, and Wealthsimple has struggled to gain a strong foothold in the U.S. market despite having a quality service,” said David Goldstone, head of research for Backend Benchmarking.
The difference in adoption between the two markets helps explain why Wealthsimple sold its U.S. assets and is concentrating on the Canadian market.
“Focusing on the Canadian market will allow them to deploy the recently raised $87 million into their fast-growing Canadian business in preparation for a potential IPO,” Goldstone said.
In October, Wealthsimple announced the $87 million funding round that made it the latest tech unicorn with a valuation of just over $1 billion dollars.
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.