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Wealthsimple adds crypto portfolios to group-retirement plans

BNN Bloomberg | Kevin Orland | Oct 21, 2021

TheClose Wealthsimple crypto and group retirement funds - Wealthsimple adds crypto portfolios to group-retirement plansPower Corp. of Canada’s online financial-services company Wealthsimple is adding retirement portfolios that include Bitcoin and Ethereum for its group-retirement clients, another sign of the possible mainstreaming of cryptocurrencies.

Employees of companies with retirement plans run by Wealthsimple Work will be able to allocate 1 per cent to 3 per cent of their holdings into exchange-traded funds made up of Bitcoin and Ethereum, Wealthsimple said Thursday. The plans will automatically rebalance to keep the crypto, stock and bond portions of their portfolios at their targeted levels.

For Wealthsimple, adding cryptocurrencies to retirement plans is a way to differentiate its offerings from those of other financial-services providers and lure more companies to sign up with Wealthsimple Work. The move also is meant to encourage younger employees -- who may be enthusiastic about crypto, but less interested in saving for retirement -- to start contributing to Wealthsimple Work plans.

“When you’re young, that’s the best time to start saving for retirement,” Tim Kalimov, head of Wealthsimple Work, said in an interview. “So getting those folks invested is really critical.”

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Wealthsimple has more than 2 million users and in May raised $750 million (US$609 million) in a funding round that valued it at about US$4 billion, more than three times what it was worth just seven months earlier. Wealthsimple Work manages group retirement plans for hundreds of companies, according to the company’s website.

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Meanwhile, Morgan Stanley Chief Executive Officer James Gorman said last week that he doesn’t think crypto is a fad, pitting him against JPMorgan Chase & Co. CEO Jamie Dimon, who said days earlier that he personally thinks Bitcoin is “worthless” though some of his clients disagree. Former Goldman Sachs Group Inc. CEO Lloyd Blankfein said crypto “may be one of the thousand things that I never in a million years thought would work, and it may work.”

“It’s clearly a part of the cultural conversation,” Kalimov said. “There is a potential that cryptocurrencies and the blockchain technology that underpins them are really transformational, and that’s where the excitement in the market is coming from.”

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