It is indeed quite interesting that its innovation and competitive pricing (https://news.ycombinator.com/item?id=42838063) in the last couple years has happened under old, established Power Corp.
Any educating theories about why this is happening now?
But I think the point still stands. WealthSimple is probably not perceived by the median customer as a traditional bank. So people using it is a counter-example to GGP's point that people won't use "startup" banks.
Vanguard asset allocation ETFs are at like $1.3T [2]. 4 Of Canada's Big banks appear to add up to just over 2T Assets under management based on what Google just gave me as summary. So while I think this is a great outcome for a startup (even with Power backing them), to me it seems in a similar space as the above article that we're still talking a relatively small market share, and likely still closer to early adopter status.
[1] - https://en.wikipedia.org/wiki/Wealthsimple#:~:text=As%20of%2... [2] - https://www.vanguard.ca/en/product/investment-capabilities/a...
Well in fairness Wealthsimple is an investment management platform providing some bank-like features through their partnership with other Schedule 1 banks (previously was Equitable Bank, don't know if they are still with them).
Wealthsimple calls themselves a non-bank [0]. My understanding is that when Wealthsimple says that funds are CDIC ensured, they mean that they are held in a bank account from a third party bank whose funds are CDIC ensured.
I am not a lawyer or a banker, but Wealthsimple always scared me a bit after seeing what happened to (albeit far sketchier) Yotta when a fintech company they relied on (Synapse) folded. While funds are insured, if your funds are not "lost" but simply inaccessible, the insurance isn't really worth anything. Likewise, my understanding is that if WS goes belly-up (unlikely) there's a possibility where funds are still made inaccessible and the CDIC insurance doesn't kick in since the third-party bank is still alive and well.
