Nest Wealth vs Wealthsimple 2021: 2 of Canada’s Leading Robo-Advisors

Robo-advisors, or online portfolio managers, offer several advantages over traditional financial institutions when investing in exchange-traded funds (ETFs). Robo-advisors primarily make investing in ETFs easier and more cost-efficient than traditional banks and wealth management firms.

Wealthsimple and Nest Wealth are two of Canada’s leading robo-advisors. The companies offer more cost-effective, convenient, and unbiased advice for investment decisions to help you achieve your financial goals.

I prefer using Wealthsimple, but Nest Wealth is also a formidable platform. My Nest Wealth vs. Wealthsimple comparison post will give you a review and comparison of each product.

Reading this Nest Wealth vs Wealthsimple post will help you make a more well-informed decision regarding which platform to use for your investment goals.

Nest Wealth vs. Wealthsimple: A Look at the Two Canadian Robo-Advisors

This section of my Nest Wealth vs. Wealthsimple comparison will take a quick look at both robo-advisor products and introduce you to the two Canadian robo-advisor giants.

About Nest Wealth

nest wealth logo

Randy Cass, who owns Nest Wealth, is an industry veteran who launched the robo-advisor in 2014, making it one of Canada’s first robo-advisors.

You can open an account with the robo-advisor online through a secure and encrypted process that takes no more than five to ten minutes. Each client who uses a robo-advisor gets a customized portfolio based on their risk profile, financial goals, and economic circumstances.

Nest Wealth uses broad-based ETFs from iShares and Vanguard to create the portfolios. Nest Wealth offers a unique subscription pricing model, starting at $20 per month and capping at $80 per month, with an average management expense ratio (MER) of 0.13%. The fee structure works well with accounts that have larger amounts but eats into smaller accounts.

You can check out my detailed Nest Wealth review here to learn more about the robo-advisor.

Pros

  • Offers a three-tier flat subscription monthly fee
  • Covers any trading fees above $100
  • Is actively managed by human financial experts
  • Has customized portfolios for individual investors

Cons

  • Has no Socially Responsible Investment (SRI) options yet
  • Offers substantial savings only when you invest in large amounts

About Wealthsimple

Wealthsimple is widely regarded as one of the best robo-advisors worldwide. It is even more popular than Nest Wealth and offers several reasons to be considered the best.

Wealthsimple effectively acquired Canadian ShareOwner Investments Inc., Canada’s first robo-advisor service, to become one of the oldest entrants in the robo-advisor market. Wealthsimple is known for its incredibly fast, five-minute sign-up process that allows same-day funding.

Wealthsimple assigns a portfolio to clients based on their risk tolerance. Each portfolio is composed of eight to 10 ETFs, with each ETF representing a unique asset class. The company works with four of the world’s largest ETF providers.

While Wealthsimple offers features that are comparable to other robo-advisors, it has a wide range of premium benefits for clients in the Wealthsimple Black and Wealthsimple Generation plans.

You can check out my detailed Wealthsimple review here to learn more about the robo-advisor.

Pros

Cons

  • Portfolio fees are a little high
  • Trade platform is available only on mobile

Nest wealth vs. Wealthsimple – Features and Benefits

This section will discuss the features and benefits of both robo-advisors to give you an overview of the products before I go into a more comprehensive comparison between Nest Wealth and Wealthsimple.

Minimum Investment

There is no minimum investment required for both robo-advisors. You can begin investing with as little or as much money as you want to with Wealthsimple and Nest Wealth. One aspect to note here is that Wealthsimple offers more premium features for investors who have more significant account balances through Wealthsimple Black and Wealthsimple Generation.

At the basic level, however, both robo-advisors stand equal in this regard.

Customer Service

Wealthsimple’s client success team is efficient and effective. You can get in touch with them by filling out an online request form or through the phone. They operate from 8:00 am to 8:00 pm EST, Monday through Thursday, or 8:00 am to 5:30 pm on Fridays.

With Nest Wealth, you can initiate a live chat discussion online, send a note by email, leave them a voice message, or schedule a call with your portfolio manager.

Both robo-advisors are equal in terms of their customer service.

Security

Wealthsimple uses state-of-the-art security through a 256-bit SSL certificate to encrypt all information transmitted between their web servers and your browser. The robo-advisor uses it to keep your account information, including passwords and personal information, safe from any would-be hackers.

Wealthsimple also uses firewalls and backups to ensure that your information is safe and always accessible by you.

On the other hand, Nest Wealth uses bank-level security measures to ensure that your data is collected and stored safely. The platform encrypts all communication between their web servers and your browser, stores all your data on secure servers, and conducts several test processes to ensure the safety of your data.

Both robo-advisors offer top-notch security to ensure your wealth’s protection, effectively making them equal in this regard.

Financial Planning

The basic Wealthsimple platform does not offer users personalized financial planning for individual clients, unlike Nest Wealth. However, Wealthsimple Black and Wealthsimple Generation clients with account balances of over $100,000 and $500,000, respectively, can book a financial planning session with an advisor to review their financial goals and investment.

Wealthsimple Generation clients also have access to a personalized financial report based on their goals, including retirement income strategies, wealth preservation, cash flow analysis, net worth analysis, actionable steps they can take, and financial projections.

Both platforms offer access to human experts who can provide financial advice to clients regardless of their account balance. Nonetheless, Wealthsimple’s premium features make it win against Nest Wealth in terms of financial planning.

Tax-Efficient Investing

Wealthsimple offers tax-loss harvesting to lower the capital gains tax in non-registered accounts and other taxable accounts. Tax-loss harvesting is available only to Wealthsimple Black and Wealthsimple Generation clients who invest in a non-registered or taxable account.

Wealthsimple uses an algorithm to screen accounts for tax-loss harvesting. It seeks a specific decrease before it decides to sell. You can even turn the setting off or get a notification via email if you want to know if a trade has been triggered.

Meanwhile, Nest Wealth does not offer automatic tax-loss harvesting on accounts, making Wealthsimple the winner in this regard.

Nest Wealth vs. Wealthsimple – How Are They Similar?

This section of my Nest Wealth vs. Wealthsimple comparison will discuss the similarities that both robo-advisors share.

Investment Account Types

Both robo-advisors let you use various account types to store investments. Here are the investment accounts you can use with Nest Wealth and Wealthsimple:

  • Registered Retirement Savings Plan (RRSP)
  • Tax-Free Savings Account (TFSA)
  • Registered Education Savings Plan (RESP)
  • Non-registered Accounts
  • Registered Retirement Income Fund (RRIF)
  • Locked-In Retirement Account (LIRA)
  • Joint Accounts
  • Corporate Accounts

Human-Assisted Advice

A crucial feature that both robo-advisor products offer is access to human wealth management experts who can provide you with advice regarding your investments.

Most of the process of investing with both robo-advisors will be automated and based on online questionnaires that determine your risk tolerance and financial goals.

However, human financial advisors are available to give you advice over the phone, email, or live chat on both platforms.

Wealthsimple Black and Wealthsimple Generation clients even have access to better financial planning advice than Nest Wealth clients, but they are assigned dedicated portfolio managers. 

Portfolio Monitoring and Rebalancing

Nest Wealth and Wealthsimple constantly monitor the various investment portfolios that they offer to clients. If any of their portfolios no longer align with the clients’ investment goals, the robo-advisors automatically rebalance the portfolio’s holdings based on market movements and portfolio thresholds to re-align with their investment goals and risk tolerance.

Minimum Investment Amount

There is no minimum deposit to open an account and invest with Nest Wealth and Wealthsimple. However, Wealthsimple does offer better features for investors with greater amounts in their accounts through Wealthsimple Black and Wealthsimple Generation accounts.

Nest Wealth vs. Wealthsimple – How Much Do They Cost?

Most robo-advisors have a tiered fee structure based on the percentage of the account balance. Wealthsimple follows the standard approach for charging its clients based on their account balance, but Nest Wealth takes a three-tiered flat subscription fee based on the portfolio.

Wealthsimple Fees

Portfolio DepositsFee
$99,999 and less0.50%
Above $100,0000.40%

Wealthsimple MER

On top of the fees that Wealthsimple charges, there are also fees charged by the investment fund managers of the portfolio (i.e., MER). The ETF providers charge MER fees, which also apply to all robo-advisors.

  • Conservative Portfolio MER: 0.16%
  • Balanced Portfolio MER: 0.16%
  • Growth Portfolio MER: 0.13%
Wealthsimple Save Fee
$1 aboveNone

Nest Wealth Fees

Under $75,000$20 per month
From $75,000 to $149,999$40 per month
From $150,000 and above$80 per month

Nest Wealth is also transparent about charging two other fees aside from its flat monthly subscription charges.

Nest Wealth 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)

Nest Wealth MER

Nest Wealth specializes in using only low-cost ETFs that charge an average MER of 0.13% for balanced portfolios.

Overall, Wealthsimple offers a more cost-efficient solution for investors with lower account balances. However, Nest Wealth’s fee structure becomes more cost-efficient for investors with account balances higher than $250,000.

Nest Wealth vs. Wealthsimple – How Are They Different?

This section of my comparison will discuss the most prominent features that differentiate Nest Wealth and Wealthsimple.

Tax-Loss Harvesting

Wealthsimple basic and Nest Wealth do not offer tax-loss harvesting. However, Wealthsimple Black and Wealthsimple Generation customers have the benefit of tax-loss harvesting for their portfolios.

Socially Responsible Investing (SRI)

Wealthsimple offers a broader range of investment options for its customers, including SRI and Halal Investing. Nest Wealth does not offer either option at this time.

Unique Features

This section of my comparison will tell you about some features unique to each robo-advisor platform.

Nest Wealth Unique Features

Nest Wealth assigns a dedicated portfolio manager to each client. Before opening new accounts, Nest Wealth also discusses with each new client to create a completely customized portfolio based on their financial goals and help clients set their goals if they are not sure.

Wealthsimple Unique Features

Wealthsimple offers Wealthsimple Black and Wealthsimple Generation for clients with more than $100,000 and $500,000, respectively. Wealthsimple Black includes a lower management fee of 0.40%, financial planning, and tax-loss harvesting.

Wealthsimple Generation, on the other hand, includes the benefits offered by Wealthsimple Black, as well as in-depth financial planning, individualized portfolios, and 50% off on a Medcan Comprehensive Health Plan bundle.

Wealthsimple also offers both SRI and Halal portfolios for its clients. The robo-advisor covers the administrative transfer fees associated with account transfers that are greater than $5,000.

Nest Wealth vs. Wealthsimple – Final Thoughts

To conclude, here is a quick look at both robo-advisors and when it would be ideal to use them:

Use Nest Wealth if:

  • You have substantial investment capital of more than $250,000. This allows you to enjoy fees that are so low that they can be comparable to DIY investing strategies.
  • You want access to a dedicated portfolio manager who can help you create a completely tailor-made investment portfolio based on your financial goals and risk tolerance.

You can check out Nest Wealth by clicking here.

Use Wealthsimple if:

  • You seek a low-fee structure while you start out investing.
  • You seek expert financial advice with a higher investment capital of $100,000 for Wealthsimple Black and $500,000 for Wealthsimple Generation.
  • You seek Halal and/or SRI portfolios.

You can check out Wealthsimple by clicking here.

Conclusion

Wealthsimple has a low-cost structure that makes it ideal for investors of all tiers, from beginners with low capital to experienced investors with substantial capital.

Although Nest Wealth’s fee structure unlocks cost-effective investing for clients with a higher account balance, it costs more than Wealthsimple charges for lower account balances.

Wealthsimple also offers greater variety than Nest Wealth in terms of what you can invest. Hence, it comes as no surprise that Wealthsimple is arguably the most popular robo-advisor in Canada.

However, Nest Wealth’s tiered subscription structure can make it a more cost-effective investment solution for clients with larger account balances.

If I have to declare one robo-advisor better than the other, I will go for Wealthsimple. Wealthsimple provides several valuable benefits and features that make it a more attractive robo-advisor product than Nest Wealth.

However, depending on your age, investment experience, and fee tolerance, any of the two robo-advisors could work for you.

You can check out my list of the best robo-advisors in Canada to consider more options.

Nest Wealth vs. Wealthsimple - Canadian Robo-Advisor Giants
Photo of author
Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

Check Out These Posts:

Leave a Comment