Wealthsimple this week announced the official launch of margin trading for eligible clients.
The Toronto-based financial technology upstart, founded in 2014, “has spent the last several years unlocking access to sophisticated investing products like private equity and venture capital so that Canadians everywhere, not just the ultra-wealthy, can benefit,” according to Swapnil Parikh, who serves Wealthsimple as Vice President of Product.
Margin trading, a feature initially unveiled last year, represents “the next step in Wealthsimple’s sophisticated trading strategy,” Parikh stated in a memo.
It was a “top ask” from customers.
“By allowing clients to borrow funds against their existing portfolio, margin trading unlocks greater trading power—and with it, greater potential returns,” the VP said.
Parikh also noted that, acknowledging the higher risk of margin trading, Wealthsimple was “intentional in how we designed our product and in just how much we could lower the usual bar to entry without introducing additional risk.”
Through beta testing and user feedback, “we devised a quick-yet-rigorous approval process to get eligible clients up and running, with no physical paperwork or branch visits required,” he said. “We also built in a margin health tracker, which gives them a clear and constant gauge of their account’s risk level.”
Additionally, Wealthsimple intends to “roll out new educational materials” for margin trading clients.
The Canadian fintech is “robustly profitable and continues to grow at a record pace,” according to a statement last year from chief executive Michael Katchen.
Katchen, who has said he wants to grow Wealthsimple into something better than a bank, is a notable member of Build Canada, a newly formed movement targeting national prosperity.
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