Canadian’s lack of financial literacy fuelled the rise of the country’s first robo-advisor.
Having shelved the initial idea way back in 2003 because the technology and clients were not ready, Tea Nicola – along with husband Chris – launched WealthBar five years ago knowing just how back-to-basics they had to go.
The platform, which has its HQ in Vancouver, has since grown to $335 million in AUM and last year joined CI Financial, but it was valuable lessons learnt during Nicola’s two spells at Sun Life Financial that sparked its successful beginnings.
She told WP: “My experiences at Sun Life emphasized the lack of financial literacy in the consumer. The questions people would ask me would blow my mind. You constantly needed to go back to the basics because the level of financial literacy was so low.
“When we started WealthBar, it was important that we were clean, simple and straightforward. We didn’t want to confuse the customer with analysis to the point where they couldn’t make a decision because they either didn’t understand what we were trying to do or had too many options.”
The plan now is to leverage WealthBar’s new resources to expand its products and lines of business. She added: “I want to provide Canadians with more personal finance products and solutions right from their phone. It’s a lofty goal, but long term, I think we can get there. The technology is available, the industry is ready, consumers are ready, and it’s just a matter of completing the puzzle to have that seamless experience.”
A refugee who came to Canada from Bosnia in 1994, Nicola was encouraged by her parents her to learn something that would be transferable to any society. In university, that meant mechanical engineering, although she soon fell in love with the finance industry while working as a summer student for Nicola Wealth Management.
In her final summer before graduation, she and Chris digitized the firm’s filing system, making everything searchable and giving advisors remote access.
After she graduated in 2003, Nicola Wealth Management chairman and CEO John Nicola approached the pair with another project to digitize the financial advisor’s services. “John is someone who loves his job, but also loves travel, so he wanted to be able to do what he does from anywhere in the world,” Nicola said. “At the time, we did a lot of research and concluded the industry and the clients were not ready. The technology of the industry wasn’t up to par to do this.”
It wasn’t the right time but it was something that both Nicola and her husband kept in mind as they developed their own careers. Nicola went on to take a position with Sun Life Financial, providing corporate training. She held positions in both financial services and mechanical engineering for the next few years, even becoming an advisor herself.
Working with Chris at a software company called Vision Critical, the pair observed that most people were unable to get access to the same financial advice they had seen at Nicola Wealth. The penny dropped that the project they started researching years ago might now be possible with the help of software.
“We thought a financial software would be possible in Canada,” Nicola said. “We saw it in the US and thought it would work here. We knew we couldn’t copy it exactly, but there was no reason why we couldn’t do it. We went to John and asked what he thought, he said it was a great idea and came on board. Chris and I then found another external investor, then a few more came on board, and we founded WealthBar in September 2012.”
Throughout the growth of WealthBar, Nicola has never turned away from her passion to increase financial literacy among investors. She continues to teach, speak, write and host webinars on financial literacy but said she would still like to do more, such as helping governments establish a curriculum for teaching financial literacy in schools.
And WealthBar’s role in leading the robo-advisor revolution in Canada is a huge source of pride.
“What has made me most proud is that we are truly the first robo-advisor in Canada. We had to convince the regulators that we could do this. It has only been five years, but now the banks even have their own versions. I am pretty proud that I created something that is now being implemented by multinational, multi-billion-dollar organizations.”
She added: “I wish the government took financial literacy more seriously and introduced a curriculum at the elementary level, or at least at high school.
“Kids graduate from high school, go to university, get a credit card, get into debt and just dig a hole that is hard to get out of. With just a little information when they need it, everyone could be a lot more financially successful. There is an opportunity for us to raise the level of awareness because people don’t have a grasp on the basics.”