Nest Wealth: Offering better choices for lower-risk investors

December 27, 2019
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Minimum Deposit 10
Service Fees7
MER Fees10
Portfolio Options7
Portfolio Performance7
Withdrawal and Deposit options10
Human Advice 10
Customer Service10
Referral Program0

Nest Wealth is one of Canada’s largest robo advisors and it offers a wide range of accounts and portfolios for every type of investor, but especially for those who seek lower-risk investing. With a fixed monthly fee that goes from $20 to $80 -depending on your account size- instead of the standard account percentage fee. Nest Wealth is one of the most cost-effective investment platforms available to Canadians today. 

We Recommend Nest Wealth IfYou’re interested in low-risk investment options. You’re looking for a robo advisor that is great for bigger investments. You like having a human touch in your investment with registered advisors monitoring and helping you.
We Don’t Recommend Nest Wealth IfYou prefer a robo advisor that’s more beginner-friendly. For this, you can check Wealthsimple. You want an account that’s easy to set up. Check out RBC InvestEase.

Nest Wealth offers customized portfolios, diversified asset allocation, consistent monitoring, automatic portfolio rebalancing and more, plus real human advisor support. This robo advisor not only has great features, but you get to have  all these services at your fingertips. In this post you’ll find all you need to know about Nest Wealth. 

What Is Nest Wealth?

Nest Wealth is one of the first robo-advisors in Canada and it’s supported by two custodians, the NBIN (National Bank Independent Network), which is a subsidiary of the National Bank (one of the largest banks in Canada), and FCC (Fidelity Clearing Canada ULC). This means that when you open an account with Nest Wealth and invest in it, your funds will be held by them. They will also be insured by CIPF (Canadian Investor Protection Fund), which covers individual accounts for up to $1,000,000.

Another great premise of Nest Wealth is that each account opened is unique and will be treated as such by the advisors who will be offering a custom portfolio built for you using Exchange-Traded Funds or ETFs.

So, How Do You Open An Account With Nest Wealth?

Nest Wealth prides itself in being a robo-advisor with a really simple onboarding process. The whole sign-up process shouldn’t take more than 10 minutes. Here’s how it works:

STEP 1: Gather Your Personal Information

Gather your personal documents including SIN and electronic copies (photos/scan) of your driver’s license and a void cheque.

STEP 2: Register

Visit Nest Wealth using this link. Enter your details and upload the required documents.

STEP 3: Review Documentation

Now, you have to wait for your documents to be reviewed and then, they’ll open an account for you with either NBIN (which is a subsidiary of National Bank) or with FCC. This is where your funds will be held. Both custodians charge a flat rate per trade. NBIN charges $9.99 and FCC charges $7.99.

STEP 4: Funding the account

Add funds to your account. You’ll be able to speak directly with a portfolio manager (online or by phone) to ensure all your questions are answered before your money is put to work. To start growing your account, you can do so in three ways, by:

  • Directly moving money from your bank account.
  • Making a cash deposit through Bill Pay.
  • Transferring funds from another brokerage account using a transfer form.

Types Of Accounts Offered By Nest Wealth

RRSP (Registered Retirement Savings Plan)

This account can hold savings and investments. Some of its greatest perks include contributions that are tax-deductible and investments that grow inside your RRSP basket tax-free.

TFSA (Tax-free Savings Account)

This type of account works similarly to the RRSP. You can fill your TFSA basket with cash and investments like stocks, bonds, GICs, ETFs, mutual funds, and money market funds.

Spousal RRSP

Think of this as an investment account for your spouse’s retirement. You’ll receive a tax deduction for the money you contribute. Your spouse will be able to make the withdrawals in retirement and pay the resulting income tax.

LIRA (Locked-in Retirement Account)

It is quite similar to the RRSP account, but with a few important differences. With this account, you cannot contribute to it or withdraw money from it. Like its name would suggest, that money is locked-in there until you retire and it is also tax-deductible.

RESP (Registered Education Savings Plan)

Nest Wealth offers a tax-sheltered education savings account that’s meant to help parents save for their children’s post-secondary education. With this account, you can start the RESP when your child is born and contribute until 31 years after the account was opened.

SPOUSAL RRIF (Spousal Registered Retirement Income Fund)

This is a tax-effective tool to help you and your spouse generate income during your retirement. Like a Spousal Registered Retirement Savings Plan (Spousal RRSP), a Spousal RRIF is what your Spousal RRSP turns into once you retire. So this means you don’t have to cash out the account entirely, you can use it as an income source. This also means that you avoid enormous tax bills.

Joint Ownership Account

The main two types of Joint Ownership Accounts are Joint Tenancy and Tenants in Common. With the first one, assets jointly owned are passed equally to the surviving account holders. And with the second one, assets are distributed based on the arranged asset ownership. Either of these allows two or more people to deposit cash which can then be used to buy stocks, bonds, ETFs, or other investments.

Corporate Account

This is an account that specializes in offering services for companies and offshore businesses.  What sets it apart from personal and investment bank accounts lies in the fact that it requires a cash deposit which you can then use to buy stocks, bonds, ETFs or other investments.

The Nest Wealth At Work Account

On March 27, 2018, Nest Wealth announced the introduction of “Nest Wealth at Work,” a group RRSP plan for small-to-medium-sized businesses and first of its kind in Canada.

This platform was built from the ground up for busy business owners and it’s free for employers. No initiation, administration, setup or monthly fees needed, the starting whole process is simple, fast and online.

Additionally, since the goal of any group saving plan is to better prepare the employees for their retirement, this one lets employees save even more because they’ll pay almost 2/3rds less than the average individual Canadian investor.

Account Benefits And Fees

Besides low-cost ETFs and a diversified portfolio, Nest Wealth offers these benefits:

Professional Financial Advice

Customers get personalized financial advice included with their accounts. This is pretty neat since it means you get financial advice matched exactly to your financial situation. All from a dedicated portfolio manager who you can contact through call, text or email.

Automatic Re-Balancing

If a portfolio asset allocation strays from your preferred targets, it will be automatically rebalanced to ensure it remains in line with your needs.

Investor Protection

The customer’s personal information remains secure because Nest Wealth uses bank-level encryption. Funds are kept separately within an account in the customer’s name at FCC or NBIN. Both custodians are members of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF) so basically, these assets are protected by the CIPF in the event of insolvency by the custodian for up to $1,000,000 of coverage.

Nest Wealth

#1 Minimum Deposit

Nest Wealth has no minimum deposit. 

Nest Wealth Minimum Deposit Score: 10/10

#2 Service Fees

Most people are initially interested in a robo advisor like Nest Wealth for its lower fees. While most robo advisors in Canada charge a percentage fee on your account balance, Nest Wealth charges a fixed amount. So, based on your portfolio size, Nest Wealth fees can go from $20 to $80 per month. Fees go from $20 per month on accounts of under $75,000. And $80 per month on accounts over $150,000. This flat fee is ideal for investors with larger balances since it means that instead of paying a percentage monthly, they will be charged a fixed fee monthly.

These fees are hundreds of dollars less than what you would pay for a comparable portfolio of mutual funds. 

Nest Wealth Service Fees Score: 7/10

#3 MER Fees

Nest Wealth offers a subscription-based pricing model. This means customers pay a fixed low-fee per month based on their account-size category. Fees are as follows:

  • Under $75,000: $20 fee per month ($240 per annum)
  • $75,001 to under $150,000: $40 fee per month (or $480 per annum)
  • $150,001 and Above: $80 fee per month ($960 per annum)

So, unlike the “percentage of account fee” pricing model utilized by most robo advisors, Nest Wealth pricing does not continue to rise linearly and indefinitely as the portfolio assets increase, which is a huge advantage of its unique model for you as an investor.

Another benefit of most robo advisors is their low management fees. 2.23% is the average annual management expense ratio (MER) charged by equity mutual funds. However, Nest Wealth, offers portfolio management at much lower fees.  Management fees on ETFs held in each portfolio are charged directly by the ETF providers and are on average about 0.15% (which is low compared to the industry average).

In addition to the standard management fees, when trades are required to rebalance the customer’s portfolio, transaction fees may incur. These could add unwanted expenses and reduce your earnings. However, with Nest Wealth, these transaction fees are capped at a maximum of $100 per year.

Nest Wealth MER Fees Score: 10/10

#4 Deposit And Withdrawal Options

Nest Wealth charges no transfer fees from accounts held at NBCN Inc. to your bank account. It also offers other options such as wire transfers, for which you will be charged a small fee.  

As for withdrawals, you can contact them here, and they will help you make the withdrawal. 

Nest Wealth Deposit & Withdrawal Options Score: 10/10

#5 Portfolio Options

Upon opening an account with Nest Wealth, they will build you a custom portfolio using seven ETFs that represent different asset classes and include international, US, and emerging market equities; including government fixed income, real-return bonds, real estate, and cash.

These ETFs are used to build a diversified portfolio that will match the customer’s risk tolerance and investment/return objectives.

Here the 7 ETFs they design their portfolios around:

  1. Vanguard Canadian Short-term Bond Index ETF (VSB): MER of 0.11%
  2. BMO Aggregate Bond Index ETF (ZAG): MER 0.09%
  3. iShares Canadian Real Return Bond Index ETF (XRB): MER 0.39%
  4. iShares Core S&P/TSX Capped Composite Index ETF (XIC): MER 0.05%
  5. iShares Core S&P 500 Index ETF (CAD-Hedged) (XSP): MER 0.11%
  6. iShares MSCI EAFE ETF (IEFA): MER 0.08%
  7. Vanguard REIT ETF (VNQ): MER 0.12%

Nest Wealth Portfolio Options Score: 7/10

#6 Portfolio Performance

Research suggests that a diversified, risk-balanced, passive all-index fund portfolio, like the one you’ll get with Nest Wealth, is likely to outperform an actively managed mutual fund portfolio. With Nest Wealth, you get the lowest fees and the best performance. What this ultimately means is that choosing Nest Wealth over a portfolio of mutual funds can greatly increase your income in the long run as well as help you save for retirement.

You can get an estimate of your portfolio’s performance by putting your details into the Nest Wealth investment calculator. By investing 20 minutes of your time, you could get a pretty good return.

However, always keep in mind that, when it comes to investing, there are no guarantees, regardless of whether you use a robo advisor or not.

Nest Wealth Portfolio Performance Score: 7/10

#7 Human Advice

This robo advisor combines customized portfolios with professional human advice. This way you get a hybrid that gets you the best of both sides, ensuring that your money is well managed. The process of rebalancing is automated, but as an investor, you get to talk or chat with a financial expert to discuss your portfolio options. Very importantly, this advice isn’t charged extra. 

Nest Wealth Human Advice Score: 10/10

#8 Usability 

While this robo advisor doesn’t have a mobile app, their website is smooth and easy to use. With enough white space to feel clean but with a clear layout that allows clients to easily find what they’re looking for both in the desktop and mobile version. It is overall a great website to use. 

Nest Wealth Usability Score: 5/10

#9 Customer Service

You can contact Nest Wealth’s team with any inquiry you may have through their email: Or call:  (647) 725-2559.

Nest Wealth Customer Service Score: 10/10

#10 Referral Program

As of right now, Nest Wealth does not offer a referral program. 

Nest Wealth Referral Program Score: 0/10

The Takeaway…

The fact that there’s no minimum deposit requirement is a great advantage for those who’re starting to invest. However, the fee system isn’t very attractive for those with small accounts since it favors customers willing to spend big. Those with smaller investments may prefer a robo advisor who takes an annual percentage, such as Wealthsimple or Justwealth, rather than one that charges a monthly rate.

Another strong point for Nest Wealth is its huge amount of low-risk options. This is ideal for people who don’t like to gamble and would prefer a steady but safe long-term income. However, those who would like to have more profitable options to invest, perhaps would be better off with other robo advisors. Justwealth, Wealthsimple, and Questwealth Portfolios all offer more diversified options in this respect.

So there you have it, everything you need to know about Nest Wealth. Have you used Nest Wealth or any other robo advisor before? Are you a low or a high-risk investor? Leave a comment and tell us what you think about it, we’d love to hear from you!

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