Bank of Montreal Starts Robo-Adviser Offering Its ETFs

  • Bank clients may start using the SmartFolio service in January
  • It's the first robo-adviser from Canada's five-biggest banks

Bank of Montreal started an automated low-fee investment-advice platform this week called BMO SmartFolio, leading Canada’s five-biggest banks in creating a so-called robo-adviser.

"We launched the service to employees only this week, and the external launch isn’t scheduled until mid-January," Nini Krishnappa, a spokesman for the Toronto-based bank, said Thursday in an interview. The service will initially offer portfolios made up of the firm’s exchange-traded funds. “However we can and will include other ETFs if it’s the appropriate thing to do,” he said.

So-called robo-advisers typically use information provided by customers about their objectives and risk tolerance to select investments that correspond to their profile. The software programs originated about five years ago with New York-based Betterment and Wealthfront Inc., attracting clients during a period when index funds and other passive market-tracking strategies often outperformed actively managed funds.

Investors will be able to open an account with C$5,000 ($3,666), Krishnappa said. Fees will be tied to assets, starting at 0.7% for the first C$100,000, with a minimum quarterly cost of C$15, he said.

Bank of Montreal is Canada’s fourth-largest lender by assets. The platform’s start was earlier reported Thursday by the Globe and Mail.

(Corrects to say Betterment is based in New York.)
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