TORONTO National Bank of Canada is investing C$6 million in Canadian robo-adviser startup Nest Wealth and will license the financial technology company's digital wealth management platform, the companies said on Friday.
Toronto-based Nest Wealth manages investments for clients by using technology to create and monitor investment portfolios composed of low-cost exchange-traded funds. The portfolios are customized based on a series of investment-goal questions asked online.
Robo-advisers typically charge lower fees than traditional outfits, and investors can start investing with just a few hundred dollars. Portfolios also automatically rebalance according to market movements.
The robo-advisory market has become increasingly competitive, and startups like Betterment and Wealthfront in the United States have begun diversifying their offerings and tools, while others like SigFig are collaborating with banks like Wells Fargo & Co and UBS Group AG.
"It's something that not a lot of financial institutions have clear road map or even in many cases the expertise or resources in-house to build," said Nest Wealth founder Randy Cass in an interview.
Nest Wealth, which also has several other undisclosed partnership deals, is planning to expand its Nest Wealth Pro platform outside of Canada and is in talks with international partners, said Cass.
Founded in 2014, Nest Wealth received external funding once previously, with a C$1.5 million investment by Canadian publisher Metroland Media Group Ltd.
(Reporting by Solarina Ho; Editing by Cynthia Osterman)