TORONTO — Three months after expanding its millennial-targeted robo-adviser service to the United States, Wealthsimple is now seeking to capture an older demographic south of the border due to the burden of student loan debt there.CEO Michael Katchen said while he’s pleased with Wealthsimple’s early success in the U.S, he doesn’t expect to see 25- to 35-year-olds — the company’s key adopters in Canada — signing up for its online investment management services in large numbers in the U.S. any time soon.“If I said 25 to 35 in Canada has really been a sweet spot for us, (it is) maybe 35 to 45 in the U.S.,” he said.Still, he added, since co-founding Toronto-based Wealthsimple about two-and-a-half years ago, “our pick up in the U.S. has actually been much faster than it ever was in Canada when we first launched the business.”“In terms of new client numbers, we’re seeing growth that took us 18 months to get to in the Canadian business in just three months in the States,” he said, declining to specify how many clients and assets Wealthsimple has under management in the United States. Combined, Wealthsimple has over $750 million in assets under administration and approximately 30,000 clients in Canada and the U.S.Although student loan debt is an issue in Canada, Katchen said Wealthsimple’s anecdotal experience in the U.S. shows that unlike in Canada it is a barrier to investing.“The reaction in the U.S. is often, ‘Oh amazing service, sounds great, but I’ve got 10 more years of paying down my student debt before I can even think about investing,”‘ he said.Wealthsimple in part attributes the reception to the higher cost of education in the U.S., meaning young Americans are graduating with more debt, making it harder for them to start investing.The average Canadian student graduated with over $28,000 in debt in 2015, according to the Canadian Federation of Students. Meanwhile the average U.S. student debt for the class of 2016 is US$37,712, according to the National Association of Colleges and Employers.
With the assistance of the Better Than Cash Alliance, which is hosted by the UN Capital Development Fund (UNCDF), the Government of Ghana will focus on transitioning forms of Government payments to electronic ones, beginning with the digitization of government workers’ salaries. It subsequently plans to expand the use of electronic payments to the Livelihood Empowerment against Poverty (LEAP) social welfare programme in the hope that 71,000 Ghanaian households will reap the benefits of transparency, cost savings and financial inclusion.“Ghana’s digital innovation is renowned and is reflected in this commitment to transition away from cash in all government payments. Evidence and the experience of our members show that electronic payments has great potential to increase people’s access to financial services when designed appropriately and we look forward to seeing greater inclusion in Ghana,” Dr. Ruth Goodwin-Groen, Managing Director of the Better Than Cash Alliance, said in a press release. “There is also strong evidence to show that integrating digital payments into the economies of emerging countries such as Ghana will promote broad economic growth and individual financial empowerment.” Funded by the Bill & Melinda Gates Foundation, Citi, Ford Foundation, MasterCard, Omidyar Network, United States Agency for International Development and Visa Inc, the Better Than Cash Alliance works with governments, the development community and the private sector to promote the use of electronic payments as a safer and more efficient form of financial transaction. Efforts aim to help people who lack access to formal financial services such as bank accounts, and who often subsist almost entirely in an informal, cash-only economy.