Online Brokerage Wealthsimple Moves Into Commercial Banking

Online investing platform Wealthsimple Inc. is getting into commercial banking.

Wealthsimple Chief Executive Officer Michael Katchen announced that his company is offering a new cash account to consumers. And that cash account comes with a non-promotional 2.4% interest rate and minimal fees. Mr. Katchen told Bloomberg News that the new account is aimed at further simplifying the investment process.

The online financial services firm has been ramping up its product offerings in recent months, buying Vancouver-based online tax-return filing service SimpleTax and striking a partnership with Grayhawk Investment Strategies Inc. to provide technology, dealer and advisory services to high-net worth clients. Katchen now says that Wealthsimple’s next move may be to get into the mortgage business.

"One of the biggest reasons for churn is unhappy clients. It’s clients that need money for a down payment. They take out their investment account to fund a down payment on their house and it would make a lot of sense for us to help them with a mortgage when they’re ready for that," said Katchen.