BMO SmartFolio Review and Offers
Want to take more control over your investing dollars?
Want to take this control but still get professional, expert money management at a low-cost?
Of course you do.
BMO SmartFolio can help you achieve both goals – and it’s about time.
(You can skip to my awesome promo code when opening your BMO SmartFolio account here.)
But it wasn’t always this way…
For long-time readers who have been fans of my blog over many years, you’ll know I used to sabotage my portfolio in many ways.
I was not My Own Advisor but rather My Own Worst Enemy.
If your investing journey was anything like mine, you didn’t worry or think about your future much because it was so far away, and you blindly took investment advice from your elders. Looking back, I wish I could have provided better financial advice to my younger self.
But all is not lost – including taking action right now. This is especially true because the financial technology/fintech revolution has launched more online investing options to Canadians that not only improve their investing behaviour but help to keep more money in their pockets.
Bank of Montreal (BMO) officially began conducting business in 1817, making it Canada’s oldest bank. But being old doesn’t mean stubborn to change. Over the years, BMO has been progressive in launching many financial products (such as their own suite of Exchange Traded Funds (ETFs) through BMO Global Asset Management, and launching various low-cost investing solutions through BMO InvestorLine and BMO Nesbitt Burns’ SmartFolio.
Did you know that you can invest online with BMO SmartFolio and you won’t pay fees on your first $15,000 invested for a year?
I’ve also been a shareholder of Bank of Montreal for many years – you can check out my post then and now here.
Lower costs mean bigger portfolio values for you and me
Canadians are slowly catching on. They realize compounding is powerful, and higher fees (along with My Own Worst Enemy behaviour) can kill portfolio values over time. This means the lower and longer you can keep your financial costs down to run your portfolio, the wealthier you can be.
This where BMO SmartFolio can help. SmartFolio uses BMO Global Asset Management’s suite of low-cost ETFs to build their investment portfolios for clients. On top of that, many of BMO’s ETFs are award-winners, providing the best ETF in the Canadian equity investing space; providing the best ETF in the U.S. equity space; and more.
These comprehensive ETFs can be used with SmartFolio in various weights to build and maintain your portfolio:
- ZAG BMO Aggregate Bond Index ETF
- ZBK BMO Equal Weight US Banks Index ETF
- ZCM BMO Mid Corporate Bond Index ETF
- ZCN BMO S&P/TSX Capped Composite Index ETF
- ZCS BMO Short Corporate Bond Index ETF
- ZEA BMO MSCI EAFE Index ETF
- ZEB BMO Equal Weight Banks Index ETF
- ZEM BMO MSCI Emerging Markets Equity Index ETF
- ZEO BMO Equal Weight Oil & Gas Index ETF
- ZFL BMO Long Federal Bond Index ETF
- ZGI BMO Global Infrastructure Index ETF
- ZHY BMO High Yield US Corporate Bond Index ETF (Hedged to CAD)
- ZLB BMO Low Volatility Canadian Equity ETF
- ZLU BMO Low Volatility US Equity ETF
- ZMP BMO Mid Provincial Bond Index ETF
- ZMU BMO Mid-Term US IG Corporate Bond Index ETF (Hedged to CAD)
- ZRE BMO Equal Weight REITs Index ETF
- ZSP BMO S&P 500 Index ETF
- ZUE BMO S&P 500 Index ETF (Hedged to CAD)
- ZUH BMO Equal Weight US Health Care Index ETF (Hedged to CAD)
- ZUQ BMO MSCI USA High Quality Index ETF
Costs matter – I get it – so how much does SmartFolio cost?
BMO SmartFolio charges an advisory fee on each account. There is a $1,000 minimum threshold when opening an account and an advisory fee will apply to you – in a tiered approach. The more assets you have however, the lower your cost.
|Asset Value||Your Rate|
|Beyond $100,000 to $250,000||0.60%|
There is more good news:
- Household accounts can be grouped together. Meaning, the combined household assets can reduce your annual portfolio costs above.
- There are no commissions for the trades made by BMO Asset Management’s portfolio managers to re-balance your portfolio. This is a huge benefit over DIY investing to buy or sell your own ETFs or stocks like I do.
- While management fees above do not take into account the Management Expense Ratio (MER) of the ETFs owned, you should expect BMO’s managers to keep your costs low in the range of 0.20% to 0.35%. Those costs are far lower than the higher-priced products I used to own in my 20s. Live and learn and pay it forward.
What can you use SmartFolio for?
Image reference from BMO.
You don’t have to follow my lead (since we focus on maximizing contributions to our TFSAs and RRSPs for our investing journey) but I think SmartFolio makes great sense for registered investing long before you invest in a taxable account. That said, SmartFolio does offer investment accounts for those that have maxed out their registered holdings – lucky you!
Here is a list of registered and non-registered investing accounts you can take advantage of:
- Tax-Free Savings Account (TFSA)
- Registered Retirement Savings Plans (RRSP) – including spousal RRSPs
- Registered Retirement Income Fund (RRIF) – including spousal RRIFs – great for retirees
- Registered Education Savings Plans (RESP)
- Non-registered investment account
- Joint Investment Accounts
Why does SmartFolio work?
The beauty lies in its simplicity: SmartFolio is designed to provide you with a diversified, low-cost ETF model portfolio so you don’t have to figure that out or manage it on your own. Over many years of investing, a structured, re-balanced, low-cost portfolio can deliver better returns than a costly portfolio of funds you trade in and out – reacting to stock market ebbs and flows.
SmartFolio works because it leverages the benefits of software algorithms with work performed by professional portfolio managers. They are combined to do the heavy lifting for you. The software highlights trends in market performance and macro-economic data. The portfolio managers use this data to benefit your portfolio. For example, before managers introduce a new ETF into your portfolio, they will weigh the risk, prospective returns and costs based on the algorithms. It’s systematic and thorough.
Your SmartFolio model portfolio is monitored on a daily basis and trading activity is kept to a minimum. You can expect your model portfolio to be rebalanced 2-6+ times per year.
Expert portfolio managers provide a human element by verifying every position and ensuring they are philosophically consistent with your model portfolio’s investment objectives. This blend of robotics and human touch is what makes this solution so appealing.
How easy is it to get started?
Fill in an online questionnaire and get rolling. That’s it.
- Fill in this questionnaire below to ensure you get $15,000 managed for free for your first year.
- Answer the risk-based financial questions.
- Determine how and how much you would like to contribute to your accounts.
- Start saving for your contributions. You can set up automatic transfers based on your existing BMO bank account, use pre-authorized transfers or set-up a bill payment to BMO. If you have an existing BMO savings or chequing account, you can track your money across all accounts with ease, safety and trust – BMO Nesbitt Burns who oversees the SmartFolio product and its investor’s assets is a member of the Canadian Investor Protection Fund (CPIF).
Can I talk to a real person if I have questions?
Yes. Absolutely. Often.
Like I mentioned above, your SmartFolio account will be managed by a team of portfolio managers with hundreds, yes, hundreds of years of collective investing experience – more years than BMO has paid a dividend!
Summary and great offers for you!
The fintech revolution has been kind to Canadian investors. This wave continues to drive down investor costs and improve financial transparency across the industry. This is a HUGE win for retail investors like you and me – who are doing what we can to build our wealth.
long with other established and trusted brands, I am happy to offer this special BMO SmartFolio promotion to my readers should you wish to take advantage of it.
You can invest up to $15,000 for free with SmartFolio – for one full year.
You can use this year as a free test drive, you can use this offer as young investor starting your investment journey; you can use this offer to manage an established retirement portfolio or you can leverage this offer for any age in between.
SmartFolio advisors can be contacted at any step in the investing process at Smart.Folio@bmo.com or by phone at 1-844-895-3721. Love to chat? Use the online chat option by going to www.bmo.com/smartfolio.
Full disclosure: MyOwnAdvisor.ca is a partner with BMO, and has a referral program in place with BMO Nesbitt Burns. BMO SmartFolio is a product of BMO Nesbitt Burns.