Nest Wealth is a Canadian robo-advisor that offers investors a convenient way to handle their investments. Their goal is to help investors, businesses, financial advisors, and financial institutions access the latest wealth management advice and solutions using automated, low-fee, direct-to-investor technology.
What Is Nest Wealth?
Launched in 2014, Nest Wealth is made up of a team of professionals to create a financial technology firm that is partnered with Metroland Media and National Bank, both of which hold a minority stake in the company.
The premise of Nest Wealth is to use low-cost diversified ETF portfolios that are based on the Modern Portfolio Theory, which uses a strategic mathematical framework return that is maximized for a given level of risk. Nest Wealth automates part of the investing process and is based on passive investing tactics that help simplify the entire process. Plus, the platform’s algorithms help maximize returns and minimize risk for a well-rounded investment portfolio that can help build wealth over the long haul.
Overview Of Nest Wealth
| Minimum investment | None |
| Types of accounts | – RRSP – Spousal RRSP – RESP – TFSA – LIRA – RRIF – Spousal RRIF – Joint ownership – Corporate Trust – Cash |
| Tax-loss harvesting | For larger accounts |
| Fees | – Less than $75,000: $20/month – $75,000 to under $150,000: $40/month – $150,000 and over: $80/month |
| Socially responsible investing (SRI) | No |
| Automatic re-balancing | Yes |
| Dedicated Portfolio Manager | Yes |
| Automation | Yes |
| Withdrawal Fees | No |
| Transfer Fees Covered | No |
| Accessibility | Browser-based and mobile app |
| Customer Support | Live support via telephone or email |
Setting Up An Account With Nest Wealth
To start the signup process, Nest Wealth will ask you to complete a quick questionnaire, which will given them a better understanding of financial goals. Next, you will need to navigate through a series of steps to complete the signup process.
Step 1
Fill out their online form with all the necessary personal and financial information. At this point, you will also need to upload copies of specific documents, including…
- Social Insurance Number
- Driver’s license
- Void cheque
Step 2
Nest Wealth will review your submissions and start the process of opening your account. When you working with Nest Wealth your money will be held in a custodian account with either…
- National Bank Independent Network (NBIN), or
- Fidelity Clearing Canada ULC (FCC)
Step 3
The final step is for you to fund your account via any of the following methods…
- Direct deposit
- Deposit through Bill Pay
- Transfer from another brokerage account
Investment Portfolio Options
One of the biggest benefits of choosing Nest Wealth, especially for those with little investing experience, is that they do most of the heavy lifting. Nest Wealth creates personalized investment portfolios with varying proportions from the following 7 EFTs:
| ETF | Asset Class | MER |
| Vanguard Canadian Short-Term Bond Index ETF (VSB) | Short-Term Bonds | 0.11% |
| BMO Aggregate Bond Index ETF (ZAG) | Medium-Term Bonds | 0.09% |
| iShares Canadian Real Return Bond Index ETF (XRB) | Real Return Bonds | 0.39% |
| iShares Core S&P/TSX Capped Composite Index ETF (XIC) | Canadian Equities | 0.05% |
| iShares Core S&P 500 Index ETF (CAD-Hedged) (XSP) | US Equities | 0.10% |
| iShares MSCI EAFE ETF (IEFA) | Global Equities | 0.08% |
| Vanguard REIT ETF (VNQ) | Real Estate | 0.12% |
Your personalized portfolio with be diversified and will reflect your risk tolerance and ultimately your financial goals.
How Personalized Are The Investment Portfolios?
As mentioned earlier, you will have a dedicated account manager to go over your options and gather as much relevant financial information as possible from you to help create a fully customized portfolio. It will be entirely based on your risk tolerance, financial goals, and current financial situation.
Once your investment portfolio is all set up, Nest Wealth will monitor and automatically rebalance it on your behalf. Nest Wealth creates investment portfolios from seven different ETFs from seven different asset classes for optimal diversification. Based on your risk score, you’ll own a specific proportion of each product. ETFs offer a cost-effective way to diversify your investment portfolio and allow you to get exposure to several asset classes.
How Much Does Nest Wealth Cost?
Nest Wealth’s regular fee structure is as follows:
- Less than $75,000: $20/month
- $75,000 to under $150,000: $40/month
- $150,000 and over: $80/month
There are also fees that will be charged by Nest Wealth’s two custodians: National Bank Independent Network and Fidelity Clearing Canada. Custodian charges are as follows:
| Fidelity Clearing Canada | National Bank Independent Network | |
| Trading Fee | $7.99/trade | $9.99/trade |
| Annual Account Fee (registered account) | $36 | $100 |
| Annual Account Fee (non-registered account) | $25 | $75 |
In addition, ETF Management Expense Ratios (MERs) are charged by underlying fund companies. The average portfolio MER with Nest Wealth is 0.13%.
Benefits Of Choosing Nest Wealth
There are plenty of reasons why Nest Wealth makes a solid online investment platform to use:
- Fee-based service. Instead of paying a percentage of your investment holdings, you’ll be charged a flat fee, which makes your payments much more predictable.
- Assigned account manager. Any time you have a question about your investments, you’ll have direct access to an account manager to answer them.
- Capped trading fees. You’ll never pay over $100 on trading fees. Nest Wealth will cover everything over that amount.
- Robo-advisor/human advisor hybrid model. Nest Wealth offers the convenience and affordability of a robo-advisor while also offering the personalized touch of a human advisor.
- Low average MERs. The average MER is 0.13% for balanced portfolios, which is lower than most investment platforms.
- User-friendly platform. The Nest Wealth platform is very easy to use and navigate and gives you a view of your progress as it relates to meeting your goals.
- Excellent customer service. You’ll have access to your account manager via phone or email.
- Automatic rebalancing. Your portfolio will be rebalanced automatically as necessary to keep your funds growing while hedging against risk.
- Low-cost ETFs. Investing has never been more affordable and accessible thanks to Nest Wealth.
- Security. Nest Wealth portfolios are protected by the Canadian Investor Protection Fund that gives you up to $1,000,000.
Should You Use Nest Wealth Or Work With A Human Advisor?
The decision to use a robo-advisor versus a human advisor will totally depend on your style, needs, and investment strategy. Here are some scenarios that may warrant the use of a robo-advisor:
- You’re comfortable with the investment fees that are charged based on your investment portfolio’s performance.
- You’re OK with not having too much direct contact with a real-life advisor.
- You don’t have a large amount of capital to start investing with.
- You’re comfortable with having your investments automated and monitored without your intervention, whether by an algorithm or an account manager behind the scenes.
On the other hand, a robo-advisor may not be the right fit if any of the following applies to you:
- You’re uncomfortable with having your entire investment dealings conducted online.
- You prefer direct contact with a human advisor at all points along the investment spectrum.
- You want to have lots of control over your investments.
Who Is Nest Wealth Best Suited For?
Nest Wealth is ideal for investors along any part of the spectrum of investing, from a complete novice to a well-rounded investor. That said, novice investors without a lot of startup capital will find Nest Wealth especially helpful because of the low fees, low investment capital requirements, and convenience of having everything you need on display on your computer monitor or mobile device screen.
Nest Wealth is also great for investors who appreciate having their investment portfolios automatically managed and adjusted as the market changes. Rather than working with a traditional brokerage and paying sky-high fees, Nest Wealth investors can enjoy more affordable fees without having to sacrifice personalized advice and customer service.
