What’s Nest Wealth?
In late January 2024, the digital finance firm Nest Wealth was acquired by Objectway of Italy. Not a lot appears to have modified with this new acquisition. Nest Wealth was based in 2014 with the purpose of offering “digital wealth options for everybody.” Within the case of Nest Wealth, “everybody” contains not solely particular person traders such as you or me, but in addition:
- Monetary establishments
- Monetary advisors and planners
- Employers who function group RRSPs and extra
Nest Wealth’s option to deal with a number of niches is a double-edged sword. It signifies that particular person traders don’t get the extent of choices and suppleness that they might from different robo-advisors like Justwealth or Wealthsimple.
Nest Wealth’s providers for particular person traders is known as Nest Wealth Direct, and that is what we will likely be specializing in on this article.
By the top of this text, you need to have a strong image of what Nest Wealth can do for you and your investments.
How Nest Wealth Works
Nest Wealth relies on passive investing. Moderately than having you make trades your self, Nest Wealth does the investing for you primarily based in your private preferences. You don’t should be an knowledgeable to speculate efficiently – that’s one motive why we love robo-advisors.
To open an account with Nest Wealth, you’ll want:
- Your SIN
- A picture of your government-issued picture ID
- A picture of a void cheque or on-line banking login data
- Non-obligatory: an announcement for any current funding account (s) that you just want to switch to Nest Wealth
You’ll additionally full a few questionnaires that decide your monetary targets and degree of danger tolerance. Your entire course of ought to take not more than 10 minutes.
When you submit your data, Nest Wealth will overview your solutions and open an account for you inside a few enterprise days. A portfolio supervisor is accessible to reply any questions by telephone, textual content, or e mail.
You’ll be able to transfer cash into your Nest Wealth account in a number of methods:
- Straight out of your checking account
- By way of a money deposit
- By transferring funds from one other brokerage agency
The portfolio that Nest Wealth creates for you may be tailor-made to your particular monetary targets and attitudes in direction of danger. If you wish to earn earnings shortly and don’t thoughts a good quantity of danger, your portfolio will look very totally different from the one they’ll offer you for those who’re risk-averse and in search of someplace to develop your cash slowly and steadily.
Nest Wealth Evaluate: Charges
Nestwealth’s charges are very aggressive general when in comparison with the perfect robo advisors on the market. You’ll be able to learn our direct comparability to Justwealth additional down this web page and see precisely how they differ.
If you’re the tl;dr sort, then we will sum all of it up by saying Justwealth is a greater deal for smaller accounts, whereas the charge construction at Nest Wealth accommodates bigger accounts ($325,000 and past) a lot better.
Nest Wealth Annual Charges
In contrast to most robo-advisors, which cost a percentage-based fee, Nest Wealth fees a flat month-to-month charge primarily based in your account steadiness:
- Accounts underneath $10,000 pay a minimal of $5/month ($60/12 months)
- $10,000-$75,000 pay $25/month ($300/12 months)
- $75,000-$100,000 pay $50/month ($600/12 months)
- $150,000 to $325,000 pay $100/month ($1,200/12 months)
- Accounts over $325,000 pay $150/month ($1,800/12 months)
The tiered pricing mannequin can translate to some main, and never all the time beneficial, variations in value. Whereas accounts over $325,000 can see spectacular reductions vs typical robo-advisor charges, smaller accounts find yourself paying extra with Nest Wealth than they might with a percentage-based charge.
Nest Wealth’s charge construction additionally rewards traders on the higher finish of every vary. Say you have got $76,000 – your $50/month charge would characterize extra of your whole holdings than it will for somebody with $99,000.
There are additionally custodial charges whenever you open an account by means of Nest Wealth. This charge will likely be mentioned throughout account opening.
Buying and selling Charges
When Nest Wealth makes trades to rebalance your portfolio, you’ll incur a buying and selling charge of as much as $9.99 per commerce.
These charges are added to the month-to-month charge and are capped at $100 yearly per account – however contemplating that many Canadians have RRSPs, RESPs, and TFSAs, in addition to a non-registered funding account, this will add up shortly.
ETF MERs
Lastly, ETF administration charges aren’t included within the tiered charge construction. These are charged immediately by the suppliers and customarily common 0.13% throughout all robo-advisors.
Nest Wealth’s passive ETFs MERs vary from 0.06% to 0.37%.
Account Minimums
Whereas there isn’t a minimal to open or fund an account, your cash is not going to be invested till you attain a sure steadiness. Nest Wealth calls these “funding minimums”:
- Lower than $1000 = your account sits in money
- $1000 to $19,999 = your account will likely be invested in a one-ticket resolution
- Over $20,000 = your account will likely be invested in a personalized ETF portfolio
Nest Wealth Evaluate: Custom-made Portfolios
Nest Wealth invests your cash in ETFs, or Trade Traded Funds. ETFs are globally diversified, low-cost, and well-balanced collections of investments that make it straightforward to speculate with out the added accountability of choosing and selecting shares your self.
Nest Wealth affords 7 ETFs representing a spread of asset lessons. These funds are:
1. Vanguard Canadian Quick-term Bond Index ETF (VSB)—MER 0.11%
This fund is fitted to traders with a decrease danger tolerance. It tracks the Canadian authorities brief time period bonds, that are much less prone to be risky.
2. BMO Combination Bond Index ETF (ZAG)—MER 0.09%
This might be one other sensible choice for these with a low danger tolerance, because it tracks Canadian authorities medium time period bonds. Whereas the chance is a bit greater than a short-term bond index, so is your probability of incomes a better yield.
3. iShares Canadian Actual Return Bond Index ETF (XRB)—MER 0.39%
This ETF is for those who wish to put money into one thing that would assist hedge towards inflation.
4. iShares Core S&P/TSX Capped Composite Index ETF (XIC)—MER 0.05%
You probably have a better urge for food for danger, this might be a sensible choice. This ETF offers you vast publicity to quite a lot of Canadian equities.
5. iShares Core S&P 500 Index ETF (CAD-Hedged) (XSP)—MER 0.10%
If you would like publicity to the US market, this ETF is a superb alternative. It tracks the highest 500 performing corporations within the US, and is a good way to diversify your portfolio.
6. iShares MSCI EAFE ETF (IEFA)—MER 0.08%
One other nice ETF for diversification, this one offers you entry to a spread of securities from Europe, Australia and the Far East.
7. Vanguard REIT ETF (VNQ)—MER 0.12%
For those who wish to put money into US actual property with out having to bodily personal and handle properties internationally, this ETF is a superb possibility. An added advantage of REITs is they will give you a strong earnings in the long term.
Nest Wealth will construct a customized portfolio out of those ETFs that match your danger tolerance and monetary targets. Because the markets change, they’ll rebalance your portfolio robotically to ensure that it stays a superb match in your preferences.
We’re huge followers of ETFs, however a number of 7 isn’t significantly spectacular. Many robo-advisors put money into 10 or extra. We additionally prefer to see some socially accountable funding choices. Nest Wealth doesn’t supply any, which is unlucky.
The draw back of a robo-advisor like Nest Wealth is that you could’t dictate any a part of your portfolio choices. With a portfolio completely product of ETFs, you’ll miss out on some investments that may present glorious returns.
To study extra about our high ETF picks, take a look at our article on the 45 Greatest ETFs in Canada and the Greatest All-in-One ETFs in Canada.
If you wish to make the most of the potential for earnings progress that dividend shares supply, for instance, you’ll must look elsewhere (you possibly can take a look at our article concerning the Greatest Canadian Dividend Shares and the Greatest Canadian Dividend ETFs for extra data)
That being stated, Nest Wealth and different robo-advisors mean you can make investments your cash even when completely nothing concerning the inventory market. It’s good for somebody who’s simply beginning out or who doesn’t wish to go down the rabbit gap of studying the ins and outs of investing (and for those who do wish to study, we’ve obtained articles that may provide help to out!).
Nest Wealth Account Choices
Nest Wealth affords quite a lot of funding account choices. These embody the most typical funding accounts:
But additionally embody different choices similar to:
- LIRA
- RRIF
- Joint Possession Account
- Company Account
- Belief Account
- Money Account
Notice: Nest Wealth doesn’t supply a Registered Disabilities Financial savings Plan (RDSP) or First House Financial savings Accounts (FHSA).
Nest Wealth Options and Ease of Use
We’ve already mentioned how straightforward it’s to start investing with Nest Wealth. When you’re all arrange, listed below are among the options Nest Wealth affords:
Financial institution-level safety
Nest Wealth makes use of bank-level safety encryption to maintain your data protected. Your cash is held by a third-party custodian establishment that’s a member of the Funding Trade Regulatory Group of Canada (IIROC) and the Canadian Investor Safety Fund (CIPF).
Which means that securities in your account are protected as much as $1,000,000 by means of one of many custodians (NBIN Inc or Constancy Clearing Canada), ought to they go bancrupt.
As well as, Nest Wealth is regulated by the Ontario Securities Fee, which is remitted to guard shoppers.
Limitless Help
Nest Wealth accounts are managed by skilled portfolio managers. Account holders can seek the advice of with the Nest Wealth staff by telephone, textual content, or e mail.
Automated Rebalancing
If the market adjustments and your portfolio now not matches your wants, Nest Wealth will robotically rebalance it and produce it again into line along with your said targets.
Nest Wealth Cellular App Evaluate
One space wherein Nest Wealth falls far under different robo-advisors is cellular apps. Nest Wealth doesn’t have a cellular app in any respect. It’s an odd alternative for a digital finance firm that claims to be a pacesetter in know-how, nevertheless it’s a reality.
I counsel you learn our article about the perfect inventory buying and selling apps in Canada if utilizing your cell phone whereas buying and selling is a precedence for you.
Nest Wealth vs Justwealth
At any time when we overview a robo-advisor like Nest Wealth, we prefer to see the way it compares to our most beneficial robo-advisor, Justwealth.
Nest Wealth and Justwealth share some nice options:
- They’re straightforward to use for
- They provide a spread of funding accounts
- They customise an ETF portfolio primarily based in your preferences and targets
- They supply limitless help and recommendation.
We’ve put collectively a desk for a fast comparability of a few of their variations:
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7 ETFs that characterize 7 totally different asset lessons |
50 ETFs from 9 totally different suppliers which lead to over 80 portfolios |
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Customized Monetary Advisor |
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5-year returns (balanced portfolio) |
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$5 to $150/month (relying on account measurement) |
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$0 Account Minimal, however has “funding minimums”. Underneath $1000: account sits in money $1000 – $19,000: account invested in a single ticket resolution Over $20,000: account invested in customized ETF portfolio |
$5,000 (though there are exceptions for RESP and FHSA accounts) |
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$100-$500 Prompt Money Again |
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Payment construction: Justwealth fees a charge of 0.55% – 0.75% on all accounts (administration charge of 0.40% – 0.50% and ETF charge of 0.15% – 0.25%), whereas Nest Wealth fees a flat charge of between $5 and $150 a month relying on the account measurement, plus ETF charges.
We discovered that Justwealth’s charge construction gives higher worth for accounts underneath $325,000. You probably have a better steadiness than that, Nest Wealth’s charges are a greater deal.
Account minimums: Nest Wealth has “funding minimums”. You probably have lower than $1000, your account sits in money. Between $1000 to $19,999 your account will likely be invested in a one ticket resolution.
After getting over $20,000 then your account will likely be invested in a Nest Wealth customised ETF portfolio. Justwealth has an account minimal of $5000, though there are exceptions for RESP and FHSA accounts.
ETF choices: Nest Wealth has a number of 7 ETFs to select from. In the meantime, Justwealth has round 50 ETFs to create over 80 totally different portfolios to develop wealth, generate earnings, or protect wealth. Justwealth additionally affords socially accountable investing (SRI) choices in order that traders can align their cash with their morals.
Vary of providers and accounts: Nest Wealth Direct affords its particular person traders robo-advising solely. Justwealth can also be targeted on robo-advising, however affords its purchasers extra account choices together with target-date RESPs, and most notably, a personally devoted monetary advisor.
Cellular App: Justwealth has an app launched in late 2023. It isn’t fancy however given its 5-star ranking on the Apple App Retailer, we all know it’s extremely purposeful. If we may make one advice for Nest Wealth it will be to develop an app. Not having one is a critical draw back and is shockingly shocking for the 12 months 2024.
Our conclusion: whereas Nest Wealth is an effective robo-advisor, it’s missing in a number of areas in comparison with business leaders. Justwealth is our favorite for a motive, and for the on a regular basis investor, it’s nonetheless unparalleled. It additionally at present has a beneficiant join bonus. You’ll be able to learn all about Justwealth and why we like it in our Justwealth Evaluate.
Nest Wealth Evaluate : FAQ
Nest Wealth Evaluate: Our Verdict
Nest Wealth definitely has its strengths, similar to quite a lot of account sorts, service from skilled advisors, and a simple course of for making a portfolio tailor-made to your funding targets and magnificence.
Nevertheless, there are notable drawbacks. The a number of charges can accumulate, significantly for accounts underneath $325,000. This isn’t supreme for these beginning their funding journey. This problem is compounded by the truth that your cash will not be invested right into a personalized ETF portfolio till you have got a minimal of $20,000 invested. Moreover, the dearth of a cellular app is a big draw back in right now’s digital panorama.
Total it makes extra monetary sense to decide on Justwealth as your Canadian robo-advisor. With its glorious cellular platform, further account sorts, decrease monetary dedication to getting began, and personally devoted advisors, it clearly outperforms Nest Wealth.