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One datapoint: On /r/PersonalFinanceCanada a very common advice is to save money in WealthSimple or Questrade type of online financial institutions. And people

One datapoint: On /r/PersonalFinanceCanada a very common advice is to save money in WealthSimple or Questrade type of online financial institutions. And people seem to be very happy with doing this. Any financial institution that makes the act of investing money simple and legible will win some market share. I have some savings accounts in RBC Canada, and the UX seems to be designed by monkeys throwing around crayons.

smnrchrds 2y ago
Wealthsimple is a subsidiary of Power Corporation, a gigantic financial services company that has existed for 100 years. Its success is more an example of insider innovation rather than outsider disruption.
- BenoitEssiambre 2y ago
  Ah that's an interesting tidbit. I have a Wealthsimple account through my (YC company) employer. The Desmarais (Power corp folks) gave me a scholarship back in the day. I hadn't made the connection.
- abdullahkhalids 2y ago
  Interesting. I did not know that. But not surprising in retrospect. 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.
  - kevin_nisbet 2y ago
    I don't know if the point should be that people won't use a startup bank, just that the assets being directed to the startups/disruptors are not presently threatening to the big banks. I would suspect this is currently the case with WealthSimple here in Canada as well. WealthSimple is at something like $50 billion assets under management [1]. 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%20September%2018%2C%202024,billion%20in%20assets%20under%20management. https://en.wikipedia.org/wiki/Wealthsimple#:~:text=As%20of%2... [2] - https://www.vanguard.ca/en/product/investment-capabilities/asset-allocation-etfs https://www.vanguard.ca/en/product/investment-capabilities/a...
    - smnrchrds 2y ago
      I don't think the total assets under management is the correct indicator. Vanguard, Big 5 Canadian banks, and even Power Corp cater not only to consumers but also to institutional investors and ultra high net worth individuals. Wealthsimple, to the best of my knowledge, is purely consumer-facing. It is not competing for the same markets as the other ones. Its parent company Power Corp, which is competing in the same area, has an AUM that is comparable to the Big 5 banks. I wonder if there is enough public data to compare consumer products in isolation.
  - jszymborski 2y ago
    > WealthSimple is probably not perceived by the median customer as a traditional bank. 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. [0] https://archive.is/58zoJ https://archive.is/58zoJ
- dlenski 2y ago
  As I understand it, Wealthsimple was founded independently but then quickly bought by Power Corporation. It is indeed quite interesting that its innovation and competitive pricing (https://news.ycombinator.com/item?id=42838063 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?
dlenski 2y ago
Glad you're not the only one to point out Canada's comparatively stodgy financial industry. https://news.ycombinator.com/item?id=42838063 https://news.ycombinator.com/item?id=42838063 The account management interfaces of Canadian banks are pretty universally terrible. Even the neo-banks like Tangerine.
- jszymborski 2y ago
  Tangerine still insists on making login credentials your account number, and a 4 digit pin. There used to be a second system where they'd show you a secret combination of images after login and you'd provide an answer to one of four security questions, which kinda made things better as I just provided passwords as the answer to the questions, but now they've replaced that with drumroll SMS 2FA. Security is a clown show at Tangerine, I no longer use it and can't suggest other folks do.
  - dlenski 2y ago
    Indeed. Their 2FA manages to hit the sweet spot of being incredibly laggy, never remembering me, and maximally insecure. > I no longer use it and can't suggest other folks do. Same. I was lured in by their interest rate bonuses a couple years ago, but they're no longer offering anything that isn't beat by WealthSimple and others.
AdamN 2y ago
Come to Germany and try Deutsche Bank. Those monkeys are just throwing !@#$# at the wall. Moving from the US to Germany is like taking a time machine to another era when it comes to online banking.

smnrchrds 2y ago

Wealthsimple is a subsidiary of Power Corporation, a gigantic financial services company that has existed for 100 years. Its success is more an example of insider innovation rather than outsider disruption.

BenoitEssiambre 2y ago
Ah that's an interesting tidbit. I have a Wealthsimple account through my (YC company) employer. The Desmarais (Power corp folks) gave me a scholarship back in the day. I hadn't made the connection.
abdullahkhalids 2y ago
Interesting. I did not know that. But not surprising in retrospect. 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.
- kevin_nisbet 2y ago
  I don't know if the point should be that people won't use a startup bank, just that the assets being directed to the startups/disruptors are not presently threatening to the big banks. I would suspect this is currently the case with WealthSimple here in Canada as well. WealthSimple is at something like $50 billion assets under management [1]. 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%20September%2018%2C%202024,billion%20in%20assets%20under%20management. https://en.wikipedia.org/wiki/Wealthsimple#:~:text=As%20of%2... [2] - https://www.vanguard.ca/en/product/investment-capabilities/asset-allocation-etfs https://www.vanguard.ca/en/product/investment-capabilities/a...
  - smnrchrds 2y ago
    I don't think the total assets under management is the correct indicator. Vanguard, Big 5 Canadian banks, and even Power Corp cater not only to consumers but also to institutional investors and ultra high net worth individuals. Wealthsimple, to the best of my knowledge, is purely consumer-facing. It is not competing for the same markets as the other ones. Its parent company Power Corp, which is competing in the same area, has an AUM that is comparable to the Big 5 banks. I wonder if there is enough public data to compare consumer products in isolation.
- jszymborski 2y ago
  > WealthSimple is probably not perceived by the median customer as a traditional bank. 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. [0] https://archive.is/58zoJ https://archive.is/58zoJ
dlenski 2y ago
As I understand it, Wealthsimple was founded independently but then quickly bought by Power Corporation. It is indeed quite interesting that its innovation and competitive pricing (https://news.ycombinator.com/item?id=42838063 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?

dlenski 2y ago

Glad you're not the only one to point out Canada's comparatively stodgy financial industry. https://news.ycombinator.com/item?id=42838063 https://news.ycombinator.com/item?id=42838063 The account management interfaces of Canadian banks are pretty universally terrible. Even the neo-banks like Tangerine.

jszymborski 2y ago
Tangerine still insists on making login credentials your account number, and a 4 digit pin. There used to be a second system where they'd show you a secret combination of images after login and you'd provide an answer to one of four security questions, which kinda made things better as I just provided passwords as the answer to the questions, but now they've replaced that with drumroll SMS 2FA. Security is a clown show at Tangerine, I no longer use it and can't suggest other folks do.
- dlenski 2y ago
  Indeed. Their 2FA manages to hit the sweet spot of being incredibly laggy, never remembering me, and maximally insecure. > I no longer use it and can't suggest other folks do. Same. I was lured in by their interest rate bonuses a couple years ago, but they're no longer offering anything that isn't beat by WealthSimple and others.

AdamN 2y ago

Come to Germany and try Deutsche Bank. Those monkeys are just throwing !@#$# at the wall. Moving from the US to Germany is like taking a time machine to another era when it comes to online banking.