Nest Wealth Review (2024): Flat Monthly Fee Robo-Advisor

Are you in search of a robo-advisor that can help you achieve your investment goals?

The robo-advisor market is booming with several options that Canadians can choose from. Deciding on the right options is challenging, with so many choices.

I’ve used several robo-advisors, and Nest Wealth is one of the more interesting products that I’ve come across. 

This Nest Wealth review will hopefully provide you with the information you need to understand whether this robo-advisor will suit your needs.

Things to Consider Before Using a Robo-Advisor

Robo-advisors provide investment management online, usually to exchange-traded funds (ETF), with minimal to moderate involvement of humans. They rely on the latest fintech developments to help you make the most of your investment capital.

Use a Robo-Advisor if:

• You want to invest in ETFs
• You don’t want to spend much time investing
• You don’t want to make your own self-directed portfolio.
• You want to pay lower fees for investing your capital than mutual funds.
• You still want access to human advisors but don’t need to see them face-to-face.

Don’t Use a Robo-Advisor if:

• You want to construct your own portfolio and have a self-directed investment account. 
• You prefer a lot of face-to-face time with financial advisors.
• You want to learn about buying and selling stocks to rebalance your portfolio.

What is Nest Wealth?

Founded by Randy Cass in 2014, Nest Wealth is a wealth management company that offers personalized investment portfolios to Canadians. It is one of the first robo-advisors launched in Canada.

The founder is a CFA Charterholder with experience of more than 15 years in managing substantial investment portfolios. He hosted the show Market Sense on BNN for several years.

Fidelity Clearing Canada (FCC) or The National Bank Independent Network (NIBN), a subsidiary of the National Bank, holds all the client assets for Nest Wealth. The wealth management company is not owned by NIBN or FCC. It only uses FCC and NBIN as third-party institutions for handling client assets.

Nest Wealth employs a team of financial experts, engineers, and techies to provide a cutting-edge wealth management service. 

Features and Benefits

In this part of my Nest Wealth review, we will take a look at several features and benefits offered by the hybrid robo-advisor.

Accounts Offered at Nest Wealth

You can open several types of common investment accounts with Nest Wealth, including:

• Tax-Free Savings Account (TFSA)
• Registered Retirement Savings Plan (RRSP)
• Spousal RRSP
• Locked-In Retirement Account (LIRA)
• Registered Education Savings Plan (RESP)
• Registered Retirement Income Fund (RRIF)
• Spousal RRIF
• Corporate Account
• Trust Account
• Joint Ownership Account
• Cash Account

Nest Wealth Portfolios

In this section of my Nest Wealth review, I will walk you through the ETF portfolios offered by the wealth management product. This aspect of Nest Wealth makes it unique. Where most robo-advisors offer investment portfolios based on pre-made template portfolios, Nest Wealth creates personalized ETF portfolios for each client.

It uses a combination of seven different ETFs to create your portfolio:

ETF Name	Asset Class	MER
Vanguard Canadian 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	0.06%
iShares Core S&P 500 Index ETF (XSP)	US Equities	0.11%
iShares Core MSCI EAFE IMI Index ETF (XEF)	Global Equity	0.08%
Vanguard US REIT ETF (VNQ)	Real Estate	0.12%

Nest Wealth offers a truly tailor-made investment portfolio through its geographically diversified ETFs divided across these asset classes.

Nest Wealth Account Features and Benefits

In addition to its low-cost ETFs and a unique diversified investment portfolio, Nest Wealth offers you the following features:

• Automatic Rebalancing: Whenever the asset allocation in your investment portfolio veers away from its preferred targets, Nest Wealth automatically rebalances it to align with your financial goals.
• Professional Financial Advice: The financial experts working at Nest Wealth offer you personalized financial advice based on your goals and circumstances. You will have access to a dedicated portfolio manager whom you can contact through text, phone call, or email.
• Investor Protection: Nest Wealth ensures the protection of your personal data through bank-level encryption. It stores your funds separately in an account under your name at FCC or NBIN – members of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF).Your assets have protection through coverage by the CIPF in case of Nest Wealth’s insolvency for up to $1,000,000.
• Lower Fees: Nest Wealth’s 3-Tier subscription monthly fee structure offers you a relatively lower cost for using the robo-advisor as opposed to other similar products that typically charge fees based on the percentage of the account. Nest Wealth also caps the transaction fee to $100 per year, taking care of additional transaction fees itself. I will take a more comprehensive look at the fee structure in the next section of my Nest Wealth Review.
  

Nest Wealth Fees

Where most robo-advisors have a tiered fee structure based on the percentage of accounts, Nest Wealth takes a different approach. Its 3-tiered flat subscription fee is based on your portfolio, and it looks like this:

Range of Investment	Fees
From $10,000 to $74,999	$25 per month
From $75,000 to $149,999	$50 per month
From $150,000 to $325,000	$100 per month
From $325,000 and above	$150 per month

Example of how much you would pay:

• $10,000 invested = $300 / year in fees (3.00% annual fees) + MER
• $50,000 invested = $300 / year in fees (0.60% annual fees) + MER
• $75,000 invested = $600 / year in fees (0.80% annual fees) + MER
• $149,000 invested = $600 / year in fees (0.40% annual fees)  + MER
• $150,000 invested = $1,200 / year in fees (0.80% annual fees) + MER
• $325,000 invested = $1,800 / year in fees (0.55% annual fees) + MER
• $1,000,000 invested = $1,800 / year in fees (0.18% annual fees) + MER

This difference in fee structure offers you more savings on your investment in the upper tiers. On the lower tiers, you may be paying Nest Wealth a higher fee as opposed to other robo-advisors.

Nest Wealth charges two more types of fees than its flat monthly subscription, and it is transparent about them:

Custodian Fees

Nest Wealth uses two different custodians, and both of them charge different fees for each trade.

• Fidelity Clearing Canada (FCC)
  • Trading Fee: $7.99 per trade
  • Annual Account Fee: $36 (Registered Account), $25 (Non-Registered Account)
    
• National Bank Independent Network (NIBN)
  • Trading Fee: $9.99 per trade
  • Annual Account Fee: $100 (Registered Account), $75 (Non-Registered Account)

The custodian fees never exceed $100 in a year, and as previously mentioned, Nest Wealth covers any trading fee above $100. You can trade as much as you want without worrying about the trading fees. The custodians charge an account fee that Nest Wealth covers for your first account for you.

MER fees

ETF companies charge Management Expense Ratio (MER) fees, and that applies to all robo-advisors. Nest Wealth utilizes only low-cost ETFs that charge an average MER of 0.13% for balanced portfolios. Its MER fees are much lower than the average mutual fund fees in Canada, which is around 2%.

Nest Wealth At Work

Nest Wealth At Work is a free-of-cost program that it offers for employers that use this platform for setting up a Group RRSP for their employees. Nest Wealth charges the employees a flat 0.95% fee annually for this, which is lower than the traditional mutual fund fees.

Nest Wealth Pro and Plus

Nest Wealth Pro is a digital wealth platform that Nest Wealth offers to other financial institutions that want to enhance their wealth management systems. Financial institutions that use Nest Wealth Pro can reduce their operational costs and risks through this platform. They can increase their capacity for available advisors. It also allows them to improve their overall engagement with clients.

Nest Wealth Plus is a program that Nest Wealth offers to financial advisors, planners, dealers, and brokers who can use the state-of-the-art digital platform to enhance the service they provide to their own clients for a nominal fee. 

Nest Wealth Calculator and Asset Allocation

A feature that I appreciate about Nest Wealth is its calculator which gives you an overview of how you can expect your wealth to grow through the platform to achieve a few investment goals.

It starts with scrolling to the page for individual investors, filling out your age, how much you plan to invest, and clicking on “Build my portfolio.”

It then redirects you to the Nest Wealth Calculator page, where you will select your financial goal, plan to retire, and plan to save each year until you retire.

When you click on “See how we can help you,” it takes you to a page where it presents you an estimate based on the information and goals you’ve put in as well as a comparison of the returns you can get with a typical mutual funds product for the same period and goals. All of this information is available before you even sign up on the platform.

If you sign up for the platform, it shows you the nitty-gritty details of its asset allocation after getting to know you better. It creates a personalized portfolio after a risk assessment based on your answers to their questions.

The chart diagram is updated as you answer the questions, clearly showing the impact of your preferences on your personalized portfolio.

Based on the responses you give, they will weigh your risk tolerance and begin allocating the assets based on the risk tolerance determined by your answers. It is a lengthy series of questions that will help the platform accurately outline your ideal asset allocation.

This process clearly shows the fact that the platform is creating a customized portfolio that works for individual clients rather than utilizing preset templates. Even if you do not plan to use Nest Wealth’s services, the sign-up process can reveal valuable information regarding their recommendation for a personalized portfolio.

Is Nest Wealth Safe and Legit?

Nest Wealth is as safe an investment option as the custodians that the platform uses. Nest Wealth does not hold any of your assets itself. The platform offers you trading instructions for the account. The only money that Nest Wealth withdraws is its own advisor fee.

The custodians are responsible for keeping your funds safe. Even if Nest Wealth goes out of business itself, your assets will be safe. If the custodians themselves go bankrupt, any securities they hold up to $1,000,000 for each investor. The custodians themselves are not allowed to use your money in any way.

Nest Wealth Alternatives

When I think of alternatives that I can compare with Nest Wealth, I can think of Wealthsimple, Questwealth, and Wealthbar. 

Here is a comparison of their pricing as well as a look at some other differences:

	Nest Wealth	Wealthsimple	Questwealth
Management Fees	$20-$80 per month	0.4%-0.5% per year	0.2%-0.25% per year
MER	Average 0.13%	Around 0.2%	0.11%-0.23% Regular portfolio; 0.21%-0.35% SRI portfolio
Minimum Balance	None	None	$1,000

Nest Wealth vs. Wealthsimple

Wealthsimple, like Nest Wealth, is among the first robo-advisors in Canada. Wealthsimple is the most popular robo-advisor product in Canada. It offers its clients an extensive suite of features, benefits, and low fees.

Wealthsimple offers lower fees due to its percentage system when you have a smaller balance in your account.

Wealthsimple offers you a range of ETF portfolios ranging from conservative to aggressive risk tolerance. These are, however, preset templates that it recommends based on your risk tolerance. Nest Wealth offers you a truly personalized portfolio.

Wealthsimple does not have a minimum balance requirement. Nest Wealth requires an investment of at least $1,000 before the robo-advisor begins investing your funds. You can learn more about Wealthsimple in my Wealthsimple Review.

Nest Wealth vs. Questwealth

Questwealth Portfolios is the robo-advisor platform launched by Questrade in 2018. It is an improved version of one of the oldest robo-advisors. Questwealth’s actively managed portfolios are built and managed by financial experts who automatically adjust the portfolio to reduce risk and maximize returns for investors.

Nest Wealth does not offer Socially Responsible Investing options, unlike Questwealth and Wealthsimple. Questwealth offers tax-loss harvesting to all its customers, and Nest Wealth does not offer the option for any customers. You can learn more about Questwealth in my Questwealth Review.

Conclusion

Nest Wealth is not just another robo-advisor in Canada. It has value to offer its clients who can manage to invest more capital. It offers you a genuinely custom-made investment portfolio, and it provides you with a fixed fee compared to the percentage-based fee offered by most robo-advisors.

Nest Wealth gets an enthusiastic, yet cautious, thumbs up from Wealthawesome.

You can check out Nest Wealth by clicking here.