Wealthsimple CEO, Michael Katchen on investing and insurance
Insurance

Insurance, investing, deductibles, portfolios… The financial landscape sounds costly and complicated, but does it really have to be? That’s what Michael Katchen thought too before starting Wealthsimple. We sat down with Michael to get the inside scoop on Canadian fintech, investing and how insurance fits into your financial health.

Of course, we have to ask...Why did you start Wealthsimple?

Michael:

I started Wealthsimple because when I looked at what the options were for investing, I saw three major problems. First, it’s hard to access great services and advice. Unless you have a lot of money, most really good investment advisors don’t want to work with you. Second, the costs are high. And third, the experience sucks. Who looks forward to going to the bank to open an investment account or buy a mutual fund? With Wealthsimple, we’ve kept the fees low and created a simple, user-friendly experience. Now, anyone can get a diversified portfolio and advice whenever they need it.
Why is it so important to you to make wealth management accessible and affordable to everyone?

Michael:

Financial freedom is one of the greatest forces for good on the planet. It means you have the power to control your financial destiny. It enables you to do the work you love, to provide for your loved ones, and to invest in your community. Our purpose is to make sure everyone has the ability to access the tools that can let them achieve that freedom. Simple, affordable investing services – and not just investing, but all financial products and services – that are available to everyone, are a crucial part of enabling that.
You talk a lot about the importance of financial freedom.How does insurance fit into that?

Michael:

Insurance is a really important part of someone’s whole financial picture. If you think about finances throughout your working life… First, you pay off debt. Then, you start to put money aside in savings and investments accounts. Then, maybe you make some big purchases – a home, a car. The next step is insurance to protect those assets. Insurance is crucial for safeguarding the things we work hardest for in life and for ensuring that our loved ones are cared for.
Do you have a real-life example of how insurance has protected what you’ve worked so hard for?

Michael:

Yes, actually. I had to make an insurance claim for Wealthsimple. Our first office had a catastrophic flood – the sprinkler system had been triggered overnight and it was raining from the ceiling. Every computer, every piece of furniture, every paper in a filing cabinet was destroyed. But thanks to insurance (and the cloud), we were able to quickly pick up the pieces and move on.
So, what do investing and insurance have in common?

Michael:

Both investing and insurance have historically been really confusing and intimidating to people. It can be really hard for someone looking for these services to get a clear picture of what their options are and exactly how much each one costs. That often results in people putting off getting the services they need – which can have serious financial consequences. That’s why companies like ours are working to make these services more transparent and accessible.

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How are companies that leverage technology (like Wealthsimple and Sonnet) evolving the financial services landscape to adapt to customer needs?

Michael:

I think that Canadians are becoming more open to looking beyond the big banks for financial services. A few things are driving this shift. One is technology. People, especially in their 20s and 30s, expect to use technology to access services. The big institutions haven’t been able to move quickly enough to meet these changing demands. Another is trust. This generation came of age during the financial crisis. They’re more skeptical of big institutions than perhaps their parents were. Transparency is really important to these clients. They want to see exactly what their options are, how much they’re paying and to whom. And that’s something the industry hasn’t historically been great at delivering.
You recently bought your first home and car – congrats! Tell us a bit about how you protected those big investments.

Michael:

Thanks! Yes, in the past year I bought my first home and car and of course, insurance was an important next step to make sure they were protected. I decided to insure both with Sonnet. I liked how simple and transparent the quoting process was. I could easily compare my options and understand exactly what my plan covers. It was a really seamless experience, which is so refreshing for the insurance industry.

Confused by your home and auto insurance? Get coverage that’s straightforward. Quote and buy online in 5 minutes with Sonnet.