In this episode, we talk about what a robo advisor is, and how it can be a lot less expensive than the traditional approach of investing in high-fee, actively managed mutual funds.

I find robo advisors to be the easiest way to invest in Canada, but this does result in higher fees than if you were to just buy the investments yourself (which is actually really easy).

I personally just buy the investments myself to get the lowest fees and pay the least tax possible (You can see exactly how I do it over at www.BuildWealthCanada.ca/invest.)

With that said, I realize not everybody wants to learn how to actually be a passive investor and get the lowest possible fees, and so robo advisors can be a good option if you value simplicity of fees.

Links and Resources

Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Kornel's investing course with free sample lessons at www.BuildWealthCanada.ca/invest

Questions Covered:

1. For those just getting started in investing, can you explain what a robo advisor service is, and especially why we as Canadians should care?

2. When you build investment portfolios for Canadians, why are ETFs such a core part of your portfolios? (perhaps explain what an ETF is first for all the listeners just getting started with this)

3. Nest Wealth mentions that you manage the money based on proven investing principles and Nobel Prize-winning theories. Can you elaborate on the Nobel Prize-winning theories component?

4. One thing I noticed on your Nest Wealth site, is that you actually list all the ETFs you buy (which is nice, I really like that transparency), but if I’m just a regular Canadian, why don’t I just buy the ETFs myself through a discount brokerage (especially since some discount brokerages let me buy ETFs for free) and then save on the fees that Nest Wealth charges?

5. Anybody following the financial services industry knows that there are a LOT of robo advisor services out in Canada. What sets Nest Wealth apart from all the rest?

5.a. One of the things that really intrigued me when I first heard of you guys is that you have a flat fee model. For those not familiar, can you explain what that is and why it’s actually a pretty big deal?

5.b. You mention that your portfolios are “custom built” unlike your competitors. Can you elaborate how this works and why it’s so important?

6. I imagine that a big concern Canadians have is that with all these robo advisor companies out there, it’s totally conceivable that not all of them will survive long term. Because of this, it wouldn’t surprise me if some Canadians are holding back from investing because they are afraid of losing all their money if something was to ever happen. Can you speak to this concern?

7. What customer support do you offer? Ex. If somebody has questions while going through the automated portfolio building process?

What about after all is set up?

8. One of the other things that intrigued me was that on your site you mention that as a client you get your own portfolio manager that you can speak with, text or call. What types of things is a Portfolio Manager ideally suited to help you with? And what types of question are beyond the scope of a Portfolio Manager like this? (I’m trying to gauge what kind of other professionals you need on your team apart from Nest Wealth).

10. I went through Nest Wealth and had it build a portfolio for me. I noticed that there were different goals that you can select, and I assume Nest Wealth will optimize your portfolio, depending on your goal correct?

How does Nest Wealth change what portfolio it recommends depending on whether somebody is savings for retirement vs is already retired and now needs the income instead of growth?

What about if they’re saving for something like a down payment on a home or post-secondary education for their child? What’s the strategy behind those types of portfolios?

11. I noticed Nest Wealth will build your portfolio based on your questions, but it won’t actually tell you whether you will be able to actually retire by an age you specify, and whether your income in retirement is sustainable. Is that because that is an area where you actually need a financial planner to do a more in-depth, 1-on-1 personalized analysis with you?

12. How is the MER absorbed? Is that covered by the monthly fee? What about other fees?

13. To close things off, who is Nest Wealth not for?

ex. Those with credit card debt?

13. Who is Nest Wealth ideally for? What type of person benefits most from what your service?

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