While most advisor clients fall in the generation X and boomer demographics, millennials are expected to come on stream. However, as they turn to technology for investment advice, there is a worry that planners won’t be able to wean them off websites and this may eventually mean a shortage of clients.
One company fuelling the fear is Wealthsimple Financial Inc., which, aside from already providing innovative information and services to generation Y, is now acquiring Canada’s first robo-adviser service, Canadian ShareOwner Investments (CSI) Inc.
Together the two combined companies make for a serious competitor to established firms focused on retail, low-asset investors. Many young people using them for investment advice now, may stick with them and struggle to make the transfer to a planner when their assets eventually call for it.
Wealthsimple is an online tool, with a modern and sleek interface, using colloquial language and modern-day references to tap into the psyche and needs of millennials. It provides investors with savings plans and helps them reach their long-term goals.
While it is providing a good service to those clients who might not yet have the assets advisors require to work with them, it’s hoped that one day they’ll outgrow internet information and turn to advisors for more in-depth advice.
While advisors can keep their fingers crossed, Wealthsimple expands their reach by acquiring CSI. CSI is a robo-advisor that helps investors build portfolios.
The deal, subject to the regulatory approval, would make this Wealthsimple’s first acquisition.