Are you sick and tired of paying too much in investments fees? You’re not alone. Canadian pay among the highest fees in the developed world. On the typical equity mutual fund, you’ll pay fees of 2.35%. And no, that’s not 2.35% of your gains, that’s 2.35% of your initial investment. Over your lifetime, you could lose almost half of your potential wealth to fees. Ouch! I don’t know about you, but I work hard for my money. The last thing I want to do is pay half of my wealth in fees.
With the introduction of CRM2, Canadians are becoming a lot more familiar with fees. On your annual performance statement, your financial advisor is required to disclose the amount of fees you’re paying in simple terms, dollars and cents, instead of in percentage (although some fees are still hidden).
As an investor, it’s important to ask yourself whether you’re getting good value for your fees. Paying thousands in fees and only meeting with your financial advisor once a year is an all-too-common story. There has to be a better way and thankfully there is. Robo advisors are taking the investment industry by storm, disrupting the traditional investment fee model.
What is a Robo Advisor?
The name robo advisor is a bit misleading. No, it’s not a robot managing your investments. The “robo” part of the name simply refers to the fact that there’s no actual human who will be picking stocks on your behalf in your investment portfolio. (This is probably a good thing since humans tend to be lousy stock pickers.) Robo advisors are actually operated by humans. It’s a service that uses highly sophisticated software to manage your investments.
Why use a robo advisor? I’m glad you asked! The fees on robo advisors tend to be substantially lower than those on the typical equity mutual fund. Whereas you may be paying 2.35% in fees for an equity mutual fund, since robo advisors invest mainly in inexpensive ETFs and operate solely online, the fees tend to be a lot lower. You’ll typically pay less than 1% in fees compared to those you’d pay a professional investment advisor.
Robo advisors operate 24/7, so you can use the services anyplace, anytime, even from the comfort of home. With a robo advisor you don’t have to worry about tedious tasks like monitoring and rebalancing your portfolio. Robo advisors take care of all of that for you, so you can get on with enjoying your life.
Robo advisors are also highly regulated, so you can rest assured that your money is just as safe as it’d be if you were investing with your bank.
Introducing Nest Wealth
With the rising popularity of robo advisors, there seems to be a new one that pops up every so often. Today we’re going to look at a highly successful one, Nest Wealth. NestWealth is Canada’s largest independent digital wealth manager.
NestWealth is all about the transparency of investment fees. When you first arrive on the website, you’re greeted by its mutual fund fee calculator. By using the calculator, you can find out how much money you’re paying in fees and how much you could be saving by using a robo advisor like Nest Wealth. They’ll even send you a free report comparing your mutual funds to Nest Wealth.
Instead of paying the traditional 2.35% on equity mutual funds, Nest Wealth’s charges a low, capped flat fee. The monthly subscription starts at only $20 a month and is capped at $80 a month regardless of how large your account grows.
When it comes to investing, if you’re anything like me, a lot of anxiety is caused by choosing your own investments. However, when you use Nest Wealth, all of the tough decisions are taken care of for you.
Create your own customized, globally diversified portfolio based on a Nobel Prize approach in minutes based on your own financial situation, personal goals and risk level. Whether you’re saving for the down payment on a home, to buy a bigger house or your own personal goal, build a portfolio with a time horizon that works for you.
Sign Up for a 3 Month Free Trial
Are you ready to get started? Then what are you waiting for? You have nothing to lose and everything to gain. Try Canada’s largest independent digital wealth manager risk-free. Sign up using this link for a 3 months free trial to start benefiting from robo advisors today.
Sean Cooper is the bestselling author of the book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians, available now on Amazon and at Chapters, Indigo and major bookstores, and as an Audiobook on Amazon, Audible and iTunes.