Wealthsimple with Dave Nugent (CIO) | EP01

The democratization of investing with the CIO of the only robo-advisor operating in Canada, the US, and the UK.

Summary:

Welcome to the very first episode of the Fintech Impact podcast, with Jason Pereira, award-winning financial planner, university lecturer, writer, and host of this show that offers expert insight into the Fintech world of financial technology. Today, Jason interviews David Nugent, the CIO and Co-Founder of Wealthsimple, Canada’s largest robo advisor and digital investment solutions for clients.

Show Notes:

●      01:10 – Wealthsimple is a robo advisor that started in the Fall of 2014, and now

                    services about 60,000 clients with offices in Canada, United States, and the

                    UK.

●      01:34 – Power Financial is the main backer of Wealthsimple thanks to about $165

                    million in capital with a millennial investor client base and B2B offerings.

●      03:13 – David Nugent’s personal journey includes: starting out in the business at 22

                    “asking businesses owners for their life savings” as an advisor and shifted

                    from advice to technology.

●      04:42 – Wealthsimple focuses on the customer experience. Most of the team

                    comes from technology and design, less from the financial world –

                    addressing problems from a usability standpoint.  

●      05:11 – Millennials are great clients because they are at the start of their careers,  

                    have a lot of future earning power and life transitions ahead, and possible

                    inheritances.

●      05:59 – On the advisor side of the business, it’s how do you help advisors service

                    more of those clients that are intimidated, while still allowing them do the

                    planning.

●      09:04 – The reaction to the advisor company towards Wealthsimple in the financial

                    planner sector has really been onboard.

●      10:13 – Wealthsimple is unique in that they are a robo advisor that operates in

                    multiple counties. The UK has proven to be at the forefront of regulatory

                    change.

●      11:14 – The scope of size of the U.S. is that the financial industry in Canada is

                     smaller than that of just the state of California.

●      12:22 – There is a challenge in the cost of acquisition.

●      14:56 – Wealthsimple has maintained a great relationship with Power Financial,

                    who have made about a dozen acquisitions in wealth, insurance, bank, and

                    credit card areas.

●      16:40 – The average age of a Wealthsimple customer is 31.

●      17:57 – As far as accounts in the United States, about 50 cents on the dollar has

                    been allocated to socially responsible investing.  

●      20:02 – One dollar accounts are possible to democratize investing and remove all

                    excuses people have for not getting started.

●      22:25 – Data collection and behavioral nudging has begun with a card system

                    within the application.

●      24:54 – Nontraditional marketing for Wealthsimple has stemmed from hiring a

                    brand leadership team, and none of them come from the financial services

                    industry.

●      27:24 – “Investing for Humans” is a tagline that underlines Weathsimple’s push to

                    talk with clients and not down to them just to “sound smart.” They won

                    back-to-back Webby Awards (like the Oscars of the Internet) for Best

                    Financial Services Website globally – with two different websites.

●      29:13 – They would like to start to offer more products.

●      31:25 – The Wealthsimple value proposition to the end client is democratizing

                    investing. On the advisor side, it is that plus automating and

                    systematizing the operational workflow that they do daily.

3 Key Points:

1.   Millennials are key clients that offer a whole lifetime of earning power still ahead of them, major life stages ahead like buying a house, and possible inheritances down the line.

2.   Empower the good advisor to do more business, and expose the bad advisor, and they are going to be in trouble.

3.   One dollar accounts are possible to democratize investing and remove all

     excuses people have for not getting started.

Tweetable Quotes:

-     “When the Canadian model got up and running, the biggest difference between the two models is that we had to call every single client with a phone call. Where in the U.S. none of that actually happens.“ – David Nugent.     

-     “Good advisors who want to do holistic planning don’t want to spend their time doing paperwork. They want the transparency, they want the efficiencies. And we are basically giving it to them.” – David Nugent.     

-    “Millennials, in our minds, are fantastic clients because they’re just at the beginnings our their careers. They’ve got a whole lifetime of earnings ahead of them .” – David Nugent.    

Resources Mentioned:

● LinkedIn – Jason Pereira’s LinkedIn

● Facebook – Jason Pereira’s Facebook

● Woodgate Financial – Website for Woodgate Financial

● Lending Loop – Jason Pereira’s Facebook

● Wealthsimple – Weathsimple Website    

● David Nugent’s LinkedIn –LinkedIn for David Nugent