Presentation from Wealthsimple's Lunch & Learn at OneEleven

1. 5 SIMPLE RULES OF SMART INVESTING
@getwealthsimple
@mkatchen

2. Wealthsimple is Canada’s fastest growing online
investment manager. We make smart investing
easy, low-cost, and transparent.

3. “Focus on what you can control and think long term.”
- Burton Malkiel, author

4. Rule #1: Start early

5. Albert Einstein called compounding "mankind's greatest
discovery”
3 friends (ages 30, 35, 40) start investing
$5,000 per year until they are 65. By that
time, they will have invested:
$125,000
$150,000
$175,000
40 35 30

6. 10 years can add $0.5MM+ to your long term savings
$935,511
$399,772
30
Impact of start date on wealth*
35 65
Age
40
$616,729
*Assumes $5,000 annual contribution, 8% annual returns.

7. Rule #2: Keep costs low

8. Canadians pay the highest investment fees of any developed
country in the world
Average equity mutual fund fees by country (%)
2.42
0.82
Canada
USA
China
India
Italy
Belgium
Spain
Norway
Korea
France
Thailand
Taiwan
Singapore
UK
New Zealand
Japan
Germany
Denmark
South Africa
Sweden
Netherlands
Switzerland
Australia
*Morningstar Global Fund Investor Experience Report, 2013

9. Would you pay $300K for financial advice?
$800,594
$509,858
1.6% in additional fees can destroy 36% of
0
your long-term wealth
15 30
Years
Growth at 2.42% fees Growth at 0.8% fees
* Average Canadian equity mutual fund charges 2.42% vs USA average fee of 0.8%
** Assumes $100,000 initial deposit, 8% annual returns

10. Rule #3: Diversify

11. Harry Markowitz won a Nobel Prize for discovering that
diversification reduces risk without hurting returns
Asset classes don’t always move in the same direction
Source: Morningstar, annual performance by asset class

12. Here’s how it works
Impact of diversification on risk and return
2 assets 6 assets 10 assets
2.26% returns 5.49% returns 9.72% returns
13.3% risk 8.49% risk 10.17% risk
0.17 return/risk 0.65 return/risk 0.96 return/risk
Source: Bloomberg as of 3/31/14, 10 years from January 2004 - February 2014

13. Rule #4: Drown out the noise

14. Know your risk profile
Risk survey Risk discussion
• Online survey
• Ability & willingness
to take risk
• Meet with an
investment advisor
• Investment goals

15. Have the discipline to stick to your plan
In 2009, $150B flowed out of equity funds
even as markets came roaring back
2002 2008 2013
Equity fund flows Market returns
Notes: Cash flows represent net cash moving in or out of stock funds. Market returns are based on the S&P/TSX Composite Index.
Sources: Morningstar for cash-flow data; Thomson Reuters Datastream for market returns.

16. Rule #5: Don’t pick stocks

17. Over 80% of professional stock pickers fail to beat the market
Percent of funds that under perform
CN Equity
US Equity
Int’l Equity
CN Bonds
72
81
86
98
0 50 100
Source: Vanguard calculations using data from Morningstar. Fund classifications and
benchmarks provided by Morningstar.

18. Personal anecdote: winning a stock picking contest at age 12…

19. … my winning pick lost 95% of its value between 1999 - 2001
MGI Software closing stock price
Contest close
12/06/1999
Acquisition
12/04/2001
$24.40
$1.18
Source: CBC acquisition announcement, Canada Trust Investment Challenge contest details

20. HOW WE DO IT

22. We assess your risk profile and investment goals to help you
create and stick to a long-term investment plan
Risk survey Suitability call
• Online survey
• Ability & willingness
to take risk
• Phone call with your
Wealth Concierge
• Investment goals

23. We build you a fully-diversified portfolio across 8-10 asset
classes, customized for your risk tolerance

24. We monitor your portfolio every day and automatically
rebalance it to keep you on track
Expected return
Your asset allocation will drift from its
target as markets move
Risk

25. We automatically optimize your portfolio for tax efficiency on a
daily basis
$25 “harvestable” tax-loss
benefit per share.
Tax-loss harvesting example*
$75
$100
Aug Sept Oct
* Illustrative example

26. Transparent and intuitive reporting via web and mobile

27. We charge a lot less than everyone else

28. Michael Katchen, Founder & CEO
• Head of Ancestry.ca, VP at 1000memories
• McKinsey & Co. financial services practice
• Named one of the “500 people that will
define the next 12 months” by Askmen
Brett Huneycutt, COO
• Co-founder, 1000memories
• Director of Product, Ancestry.com and Stripe
• McKinsey & Co., financial services
• Rhodes Scholar
Dave Nugent, PM & CCO
• Investment Advisor, RBC Dominion
Securities with shared $300MM book
• Canadian Investment Manager (CIM)
• President of Student Council, Huron
Peter Graham, Engineer
• Engineering, 1000memories and
Ancestry.com
• Computer Science at Colby College
• Mobile intern at AOI Pro in Tokyo
Rudy Adler, Product Design
• Co-founder, 1000memories
• Wieden+Kennedy creative
• Launched award winning campaigns for
Apple, Levi’s, Focus Features
Kate Murphy, Engineer
• Hacker School and HackLab.TO
• Ladies Learning Code
• Engineer at Virgin mobile, Konrad Group
Alex Rascanu, Marketing
• Director or Marketing, Conversion Media
and Powered by Search
• Founder, Marketers without Borders and
Marketers Unbound
Kayla Wilson, Associate Wealth Concierge
• Sales assistant at Raymond James
• Business Marketing at George Brown
• Canadian Securities Course Candidate
Our team

29. Our advisors
Joseph Canavan, Executive Chairman
• Former CEO, Assante Wealth Management
• Founder, Synergy and GT Global
• “Person of Influence of the Decade” at the
Canadian Investment Awards 2004
Prof. Eric Kirzner, Investment Committee
Roger Martin
• Former Dean, Rotman Business School
• Former co-head of Monitor Company
• Placed 3rd on the list of most influential
global business thinkers in 2013
Brent Belzberg
• Managing Partner, Torquest
• Founder, Harrowston (acquired in 2001)
• Director, CIBC and Mount Sinai
David Ossip
• CEO, Ceridian HCM
• Founder of Dayforce and Workbrain
• Ernst and Young Entrepreneur of the Year
Award, Top 40 under 40 in 2004
Dan Debow
• SVP at Salesforce.com
• Co-Founder, Rypple (acquired in 2012)
• Founding team, Workbrain
Christian Lassonde
• Managing Partner, Impression Ventures
• Managing Director, Next36 Ventures
• Founder, Millions of Us, Virtual Greats
Andrew D’Souza
• President, Bionym
• Former COO, Top Hat, Top Prospect
• McKinsey & Company
• John H. Watson Chair in Value Investing at
the Rotman School of Business
• Author of 13 books on investment finance
• Founder of the Easy Chair Portfolio

30. Disclosures
Wealthsimple Financial Inc. is registered as a Portfolio Manager in Ontario and British
Columbia. Securities in your account are protected up to $1,000,000 CDN. See
www.cipf.ca for more details.
!
Past performance is no guarantee of future results. Any historical returns, expected
returns, or probability projections may not reflect actual future performance. All securities
involve risk and may result in loss. We do not provide financial planning services to
individual investors. Read our Full Disclosure at wealthsimple.com/legal/.disclosure.
!
Copyright 2014 Wealthsimple Financial Inc.