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Canadian robo-adviser Planswell is closing down after losing a $20-million round of funding from a group of investors that included Sun Life Financial Inc.

Planswell chief executive officer Eric Arnold announced the closing and the layoffs of 57 employees on the company’s website on Monday afternoon. In a blog post, Mr. Arnold wrote it had been a difficult month and that the company had been “built on a series of miracles,” but was “one miracle short.”

“Our leadership spent every waking moment on emergency calls and in board rooms while our team broke client service records. … It wasn’t enough,” Mr. Arnold wrote.

Financial documents show that, at the end of August, the company was running short of cash and needed fresh capital to continue to make its payroll.

“Our hearts were ripped from our chests,” Mr. Arnold wrote of the closing. “[Planswell] could not be saved."

A source with knowledge of the financial situation, whose identity The Globe is keeping confidential because they are not authorized to speak publicly, said Sun Life and the rest of the investor group was set to provide a $1-million bridge financing loan in mid-October that Planswell needed before the close of the $20-million round of funding. However, the funding round fell apart shortly after a former Planswell employee went public with sexual misconduct allegations against an ex-senior executive.

Planswell entered the industry as a small startup in January, 2018, offering Canadians free online financial planning services, including investments, insurance and mortgage advice. It relied on investor capital and had secured about $13.8-million in initial rounds of seed funding. But it had difficulty capturing significant assets from investors. Today, it manages just more than $20-million in assets on its robo-adviser platform and has completed about 100,000 financial plans for clients.

The company quickly caught the eye of large financial institutions. A second source confirmed that earlier this year, two mutual funds from Fidelity Investments Canada provided $4-million in investments, while Sun Life Financial provided $300,000 to launch a three-month pilot project with the company. The Globe and Mail is keeping the identity of the source confidential because they are not authorized to speak publicly.

The source said the life insurer also received $4-million in stock warrants that would give it just more than 10 per cent ownership in Planswell. Sun Life would not comment on whether it has exercised its warrants.

“Sun Life made a small investment in Planswell early this year and also established a commercial relationship,” spokesman Darren Friesen said in an e-mail. “We were piloting their financial road map tool for clients and advisers. We test and pilot many applications and digital technologies as we seek to achieve our purpose – to help our clients achieve lifetime financial security and live healthier lives. At this time, we have determined that further investment in Planswell does not align with Sun Life’s core investment strategy.”

The sexual harassment allegations were made public on LinkedIn on Sept. 26 by an anonymous poster, who said she had left the company in September, 2018, after a senior executive at Planswell sexually harassed her for 10 months.

Planswell launched an investigation in March, conducted by a third-party firm and the company’s lawyers. During the investigation, the senior executive resigned. As a result of the investigation, Planswell implemented a workplace sexual harassment policy and offered to pay for therapy for the complainant.

Mr. Arnold declined to comment this week. But in a September Twitter post, he confirmed the executive had left the company and apologized to the employee for what she had experienced.

The senior executive did not respond to requests for comment from The Globe and Mail.

For clients who hold assets in the company’s robo-adviser, Planswell Portfolios, the company is helping move accounts to several other robo-advisers that have similar set-ups, such as Justwealth, WealthBar and Smart Money. The company told clients on its website that it will manage their investments until the end of November.

“We continue to hold your assets at an independent custodian, BBS Securities. ... You still have access to your money and no changes will be made without your permission," a company blog post says.

Clients with insurance and mortgage accounts will continue with their policies through the third-party providers that Planswell was using.

Robo-advisers, also known as online portfolio managers, calculate an appropriate investment portfolio based on age, financial goals and risk tolerance – all for much lower fees than those usually offered by traditional financial advisers.

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