Why Drop’s Strategy and Growth Lead Loves Wealthsimple
Wealthsimple: the next generational way for millennials to invest their money.
Hi, I’m Christal! I’m currently working at Drop on an externship from Bain. As Drop’s strategy and growth lead, I manage our US launch, which has been very fun and exciting! When I graduated from university in 2015 and landed my job at Bain, one of my “adult” goals was to begin investing my hard-earned money.
Investing can be extremely confusing, especially when investing for the first time. Most of us begin investing after we start our first job, and have little to no clue what to do. We hear buzz words being thrown around — from the simple 401k to the complex tax liens. On top of this, the “low interest rate environment, compounded with extremely volatile stock market returns” leave us confused about where and how to invest. Should we put our money in bonds to be safe? What’s all the buzz about cryptocurrencies? Maybe ETFs? What even is an ETF?
I remember asking around in my group of friends to figure out what other people were doing. They largely fell into 3 groups. The first were the investment-savvy friends; they have been investing for as long as they could remember, and actively manage their own portfolio. The second were those with their “parents’ investment guy”; their money was managed by an investment professional who their parents had a longstanding relationship with. The last group were those who had no clue what to do (or were too lazy to figure it out) and had their money sitting in their bank’s TFSA, RRSP, or savings account; these friends virtually haven’t seen their money grow at all.
Amongst the noise, a couple of my more tech savvy friends pointed me towards the concept of Robo Advisors (digital financial advice based on mathematical rules or algorithms), and more specifically, Wealthsimple. To be honest, I’m not the earliest of adopters and was skeptical at first. It took 3 or 4 people referring me to finally get me on board. I downloaded the app to check it out and was surprised at how simple and intuitive the entire process was.
Signing up and portfolio selection
The first thing that stood out was how clean and well-designed the Wealthsimple app was. The interface was easy to use and processes easy to understand. The sign-up process was quick — it only took a total of 5 minutes for Wealthsimple to recommend me a portfolio. I was asked some questions about what I was saving up for, what my risk tolerance was, and how experienced I was with investing. Something I noticed was that I didn’t know the answer to some of these simple questions; it was a wakeup call that it was time to really reflect on my financial goals.
Investing, funds transfer, and returns
Once my account was set up, I transferred money over from my chequings account — $3,000 to test the waters. The process was painless and my funds were in my account within three days.
I have to admit, it was pretty fun checking in on the dashboard periodically and seeing what Wealthsimple has been doing. Your returns and cumulative portfolio value are displayed clearly and you can access investment and dividend management activity as well.
Within 3 months of funding my account, I had earned $200 on the $3,000 initial investment. Based on their calculations, this is a 5.8% time-weighted return. Wealthsimple’s investment strategy urges users to view their investment over a longer time horizon, such as 3–5 years.
Other non-investment experience
On top of the actual investment service provided, there are many other things that I love about Wealthsimple.
My favorite part, besides the actual investment service provided, is actually the “Learn” page of the app. In the app, you can access a section where the Wealthsimple Magazine lives. Here there are articles that answer questions about investing, advice from industry leaders, and much more. The best part is that the tone itself is always candid, frank, and easy to understand.
Another cool aspect of Wealthsimple is that they engage in socially responsible investment (SRI). This may not be important to everyone, but for me it’s definitely a priority. SRI means choosing an investment portfolio that only includes companies that meet a certain threshold of social responsibility — think environmental impact, social issues, and governance concerns.
Lastly, everything is free AND you’ll actually get paid for starting an account. With Drop you can get up to a $10,000 investment managed for free and you’ll earn an extra $75 (75,000 Drop points)! Don’t forget to go through Drop to open the account.
