- Simple Low Cost Diversified Investing for Papasan Pickles

Randy Cass - Honorary Papasan Pickle and CEO of Nest Wealth
3 great reasons you should invest with Nest Wealth - the one-stop, all-in-one place for low-cost, diversified investments and effective returns based on Nobel prize winning investing strategies:

Reason 1. You are less motivated than a Couch Potato (i.e., you are a Papasan Pickle, meaning you want low fees but will not expend the calories to buy a handful of ETFs and balance them once in a while).  After all you are likely curled up in a papasan chair now reading this on a tablet, as opposed to doing something active.  Just an observation ... we are not judging.

Reason 2. You have a good job allowing you to pay a few dollars in fees for the great value and service provides.  Or you have an OK job and a good hobby (e.g., chair testing at Ikea, carving walking sticks, collecting steam-punk pickles  ...meaning you have no time for investing).
Yes, steam-punk pickles exist!

Reason 3. You think that if you invest enough, Randy Cass the CEO of Nest Wealth will give you BNN Anchor Catherine Murray's phone number and you'll hook up.  Sweet mother of relish!

But seriously.

What Does Nest Wealth Do?
  • Offers a managed portfolio for only $80 / month ($40 if you are under 40 years old).
  • Creates a customized portfolio based on your "current financial situation, goals and risk tolerance".
  • Invests in low-cost ETFs (average fee of index tracking ETF in a Nest Wealth account  is 0.18% - 90% less than the average equity mutual fund in Canada (2.42%)).
  • Builds your portfolio using Nobel Prize-Winning Theories 
  • Rebalances your portfolio yearly to align with your plan, or changing circumstances.
Nest Wealth uses the principles of David Swensen, head of the Yale Endowment Fund, noted as "one of the most recognized professionals in the investment industry" and the same approaches that large institutions use:
  1. Diversified holdings across 6 core asset classes (domestic equities, emerging market equities, international equities, government fixed income, real-return bonds and real estate).
  2. Regular rebalancing.
  3. In absence of a 'confident market beating strategy', use of low-cost index funds.
Our thoughts: with the use of index funds, a portfolio is 'managed' at a high level, not managed in the conventional, down-in-the-weeds, individual stock-picking sense.  But that is the secret to low fees and returns that are better over the long term than high fee managed funds. Who are you to argue with that? Markowitz and Sharpe have the Nobel Prize in Economics to prove it - you have a jar of steam-punk pickles. states the low equity index ETF fee .. what about the average ETF fees?

How do the costs compare to other all-in-1 investment solutions: since fees are fixed per month on top of the underlying fund fees and yearly rebalancing trade fees it is not as easy to calculate as's all-in costs.  We've assumed rebalancing fees and have not included currency conversion costs, nonetheless below is a Wealthsimple Nest Wealth comparison.  Top table is $80 per month Nest Wealth Fee (i.e., you are over 40 and listened to a lot of Rush). Bottom table is for the discount $40 per month fee (i.e., you are under 40 and listened to a lot of Billy Talent):

(notes this is an updated comparison table -  the original post did not multiply the Nest Wealth management fee by 12 for each month so fees are not as favourable in the update - so yes, fees are important!)

Nest Wealth comes out ahead for the young high rollers with $250 k + or older folk with $1M+ - overall fees are pretty close for under 40's in the $100k to $250k+ range or for over 40's between $250k and $1M.  Unless you are over 40 with less than $50k (meaning you may be working through retirement anyway) either investment is beating out mutual funds on fees and for higher amounts, they are competitive with ETF wraps and robo funds in terms of time and effort.

Either of these options beats the 1.07% fee of a Tangerine on-fund solution and hands down spanks the 2.0-2.8% fees on our old Investors Group funds - IG even charged 0.18% to rebalance the portfolio of expensive underlying funds.  This blog is really a diary of ideas on our journey away from IG.

A key factor here is "Simple".  Both investments give you a one stop shop and simple management. As our family is now settling a parent estate, there are some key lessons to be learned about simplifying accounts for the purpose of estate administration, or even before that as it relates to tax filing.

Post post:

If you've read our other posts you know favours laddered GICs to bond funds, so if you select a higher risk/growth portfolio with Nest Wealth or Wealthsimple, with a low mix of bloated bond ETF fees that's great.  You should be able to cover this plain vanilla, low risk part of you portfolio at no cost (except your time).

We also have a 'confident market beating strategy' for the spicy, kim-chi part of our portfolio that we trust in the hands of Donville Kent Asset Management - that is something you high rollers could consider while you let an all-on-one strategy take care of the middle ground in your portfolio.

Lastly, if you have options to get exposure to private equity in your pursuit of low-fee diversified investments, e.g., through OMERS AVC contributions, consider that to lessen public equity exposure.  Nest Wealth says they do what large institutions do to invest, but the largest pension funds hold private equity - Nest Wealth can put a real estate ETF into your portfolio, but OMERS will put own Oxford Properties with no market ups and downs.  The OMERS AVC management fee is in the 0.5% range which is competitive with the all-in-one fees and could offer less volatility for those with a shorter investment time horizon. Investing Made Easy

Papasan Pickles make Couch Potatoes look motivated! could be the answer for Papasan Pickle investors! - those looking for a diversified low cost investment portfolio, but too busy, inexperienced or wedged into their papasan chairs to do what Couch Potato investors do (i.e., buy a handful of index ETFs and balance the portfolio themselves). boasts the use of cutting edge technology and Nobel-prize winning research to edge out others and help boost returns.

"Your portfolio is automatically optimized and rebalanced, which can add up to 4% additional returns vs. the average investor."

Here is the secret recipe for these returns and the various amounts investors can save/earn:

The biggest benefit it the 1.6% Fee Savings relative to mutual funds. The Institutional Pricing benefit is due to "preferred pricing" Weathsimple has negotiated on investment services and products that are not available to the retail investor (Couch Potato, Papasan Pickle, you).

Wealthsimple compares the cost of fund expenses, advisor fees and trading fees as well.  The Wealthsimple fees includes a 0.35% to 0.50% management that depends on the size of you portfolio plus the embedded funds fees of 0.25%.  Under $100,000 you will pay 0.5% (0.75% total) and over $1,000,000 you pay 0.35% (0.60% total). That is a competitive total fee compared to other one-stop investing products and funds that we have reviewed in the past.

Basically you are paying 0.35-0.50% in fees for Weathsimple to allocate the assets in your portfolio from the standard basket of asset classes.  The proportion of assets is based on you risk profile determined from answers to on-line questions related to your investment knowledge, tolerance for market ups and downs, need for income vs. growth, income level and security.  Below are the allocations for the risk scores between 5 and 10.  The allocation for a risk score of 5 is 40% bonds and 60% equity, similar to a Global Couch Potato or Complete Couch Potato portfolio.  At the other extreme (risk score of 10) its 10% bonds, 90% equities.

Click on the smaller images to enlarge to see asset allocation.

The fees for similar portfolios for DIY investors would be as low as 0.20% if you buys low MER Vanguard and iShares ETF commission-free (e.g., Questrade) - the Couch Potato investor would save  up to 0.55% to 0.40% over a Wealthsimple investor (aka the hands-off, sedentary Papasan Pickle investor).  You do the math - is the convenience and expertise of the Wealthsimple portfolio services worth several hundred dollars a year on each $100,00 invested?  Likely the answer is "Yes" to inexperienced investors who don't have the time or desire to learn to trade.  Face it - time is money: you could put a few hours into your day job instead of ETF trading/balancing/book-keeping and get further ahead further financially by boosting your bonus (e.g., take on some corporate initiative to get noticed, participate in an industry group to raise your profile and enhance job prospects, treat your boss to a round of golf).

So Wealthsimple fees are certainly competitive compared to other all-on-one solutions considering the service provided.  Their fees of 0.55%-0.75% are comparable to what you'd pay with TD e-series funds or index mutual funds at a broker in a balanced DIY portfolio.  Wealthsimple fees are even less than Tangerine Investment Funds (formerly the ING Direct Streetwise Portfolios) whose 'one-fund', non-nonsense, no-trading-required balanced index fund has a MER of 1.07%.

The bottom line?  Investors looking to get out of expensive mutual funds, and Couch Potatoes who want an even more hands-off approach to their DIY investing, should consider the value (time and money) offered by Weathsimple to help meet investing needs.

Check out other ideas on robo-advisor products:
...and low fee balanced portfolios and ETF wraps:

Also, here is out updated comparison of Wealthsimple and Nest Wealth:
Wealthsimple Nest Wealth Fee Comparison

Bond Funds, Bond ETFs, GICs and Guarantees

With record low rates, is there a place for GICs in your portfolio? Maybe if you are replacing a Bond Mutual Fund or even a Bond ETFs.

Management fees on bond mutual funds eat up most of the return of the investments. Even a low fee fund like PH&N Bond Fund has a MER of 0.6% which takes 23% of the portfolio's Yield to Maturity of 2.6% - you lose almost a quarter the the returns in fees!  You can expect to put the remaining 2% in your pocket. With other high MER funds you could be losing half of the funds returns in fees.

With ETFs you are in the same boat - iShares Canadian Government Bond Index ETF (XGB) holdings have a Yield to Maturity of 2.28% and MER of 0.38% - you lose 17% - you put only 1.9% in your pocket.  You can do better with a high yield savings account.   Oaken Financial has a savings rate of 1.75% and Achieva Financial has a rate of 1.8%.  GIC rates are even higher.

UNLIKE BOND FUNDS AND ETFs, SAVINGS THE GIC PRINCIPAL AND RETURN IS GUARANTEED: Oaken deposits (through Home Trust Company) are insured through the Canada Deposit Insurance Corporation (CDIC).  Every dollar deposited with Achieva is 100% guaranteed without limit by the Deposit Guarantee Corporation of Manitoba.

Oaken Financial continues to offer the best rates on GICs. A 5-year GIC rate is 2.8% which is greater than your net return on the bond fund or bond ETF yield after payer the MER.  Here are today's rates:


Term1 year18 mths2 year3 year4 year5 yearMin. Dep.
Annual Compound or Annual Pay2.002.252.352.402.602.80$1,000


TermRateMin. Dep.
After 30 Days1.75$1,000
After 90 Days2.00$1,000

SHORT-TERM DEPOSIT(RSP from 90 days minimum $2,500)

Term30-59 days60-89 days90-119 days120-179 days180-269 days270-364 daysMin. Dep.
Paid at Maturity1.751.751.751.751.851.90$1,000


Term1 year2 year3 year4 year5 yearMin. Dep.
Annual Compound2.002.352.402.602.80$1,000


Term1 year2 year3 year4 year5 yearMin. Dep.
Annual Compound2.002.352.402.602.80$1,000


Income Options: Annual, Semi-Annual, Quarterly and Monthly
Term1 year2 year3 year4 year5 yearMin. Dep.
Annual Compound or Annual Pay2.002.352.402.602.80$10,000


Oaken Savings Account1.75
Achieva rates are competitive too. Daily Interest Savings rates on TFSA Savings, RRSP Savings and RRIF Savings and GIC rates are listed below.


Daily Interest Savings1.80%
1 Year Term2.15%
2 Year Term2.25%
3 Year Term2.35%
4 Year Term2.45%
5 Year Term2.60%