I recently opened a BMO InvestorLine account after many years as a TD Direct Investing client. I am a couch potato investor who trades very little and I was looking for a broker that offers (a) US Dollar RRSP and (b) easy Norbert Gambitting. My choices narrowed down to RBC Direct Investing and BMO InvestorLine. I decided on the latter because BMO often offers a small bribe ($250) for those switching from another broker with at least $100,000 in assets. I can’t yet recommend BMO InvestorLine whole-heartedly but if you do decide to switch to BMO after reading this post, please contact us for a referral. Not only will BMO pay me a referral fee, you will also receive an extra bonus of $50 (if your invest $50,000) or $100 (if you invest $100,000).

I’ll be updating this post shortly, but meanwhile here is a report by long-time reader and contributor Phil.

Let’s start with everything positive I can say about BMO…

Apparently they have won accolades for having the best web interface in the business. And I would agree that compared to the other brokers that I’ve sampled, whether as a customer or a demo account or at a trade show booth, I do think BMO Investorline’s user interface is the most intuitive and easy to use that I’ve tried. Their interface for program trading like limit orders and stop losses are very easy to understand for novices. Competitors that I’ve seen include TD Waterhouse, E*Trade, Interactive Brokers and now Questrade.

I’ve always found their customer service people to be prompt, friendly and they’ve always had the authority and technical know-how to fix any problems I’ve ever had. So, I would rate their customer service as being extremely high as well. If your total portfolio balance (total of RSP & Cash accounts) is over $250K, you get 5-star service which includes priority customer service, Level 2 trading view access, and reports and newsletters by various so-called industry “experts” like economists, Ranga Chand, and others.

Now for the downside…

Obviously the fees are a big one. $29.99 minimum per trade for the first 1000 shares, then something like 3 cents a share after that… It’s an absolutely brutal amount of money when you’re trading penny stocks. I’ve paid about $100 commission on some $1000 orders, so right off the bat I’m down 10% on my investment. If you have a total portfolio balance of over $500K or make over 30 trades per quarter, then you qualify for their $ 9.99 flat trading fee. Of course, you’d have to qualify first, so you would have to make 30 trades at their usual $29.99 + $0.03 / share commission first before you can qualify.

Although they like to promote the benefit of having one-stop shopping for all of your banking needs… The reality is that BMO Investorline is a separate division and they don’t talk to the retail banking division. So, although you can transfer money back and forth, in reality it’s still more like dealing with two separate companies. My personal banking representative at BMO can’t do anything for me on my Investorline account and vice-versa.

They have a very limited selection available in their fixed income selections. They offer whatever Nesbitt Burns has in their inventory, but Nesbitt Burns isn’t a big player in the bond space in the first place and then what they offer on Investorline is even more limited than that… You can [buy] the usual Government of Canada and the Provincials and some agency bonds. Beyond that, in the corporate sector, there are very slim pickings. BCE, Ford, GMAC, TRP, Ontario & Quebec Hydro and a few others make up the majority of their inventory.

And the fixed income trading fees are really high! As with all of the brokers, they don’t disclose their fees – they bury it into the price of the bond offerings. However, when I compare it to TD Waterhouse, they are charging enough fees to reduce the yield on the bonds by as much as 0.5% below the exact same bond offered by TD Waterhouse! And who knows how much TD Waterhouse charges for their bonds!

Anyways, this is all just one man’s opinion, but the drawbacks don’t outweigh the benefits so I’m switching my future trading over to Questrade. Questrade unfortunately doesn’t offer anything in fixed income or mutual funds, so they can’t meet all of my needs. But they are definitely the ticket for penny stocks and also for regular equity trading and options trading. So, in those areas all my future trading will be with Questrade and my BMO Investorline account (which I plan to retain) will only just hold my existing equities (which I don’t plan to sell – it doesn’t cost me anything to hold them) plus all of my fixed income securities (for both the present and whatever potential future investments I make in fixed income securities).

Reviews of the competition: Questrade, CIBC Investors Edge, Interactive Brokers,
Credential Direct, Qtrade, Questrade, RBC Direct, Scotia Direct and TD Waterhouse.

This article has 38 comments

  1. Great review Phil!

    I didn’t realize that Questrade doesn’t handle mutual funds. I was planning to move my LSIFs funds there from TD in order to save on the $50/yr TD charges me. Oh well.

    Mike

  2. Hey CC, can you please have a separate category for Online Brokers, like you do for Book Reviews? I think it would be absolutely fantastic to find a place where we can quickly and easily compare online brokers like we do books. Thanks!

  3. Last year I was looking around for a new Online Broker, and for me the best choice was Credential Direct. $19.95 for trades/ $9.95 for active traders (25 trades per quarter). No charge for mutual funds, no yearly administration fees with a balance over $15k. Also free level 2 quotes, stock and mutual fund screener. You can transfer money too and from any bank or credit union account. For me it was an easy choice. I also have a TD Waterhouse account and I would say that Credential Direct is way better. Have a look.
    Cheers

  4. Just a small correction, Questrade does offer mutual funds, they just have to be ordered over the phone.

  5. Thanks MDJ – I’ll be doing a T2033 transfer-in for the LSIFs so maybe I’ll give them a call and see what needs to be done.

    Mike

  6. Interesting. Questrade’s website makes absolutely no mention of mutual funds. Let me know if they charge a fee for mutual fund service – I’m guessing it might if it involves human interaction.

    I did set up my Questrade account for Options, though, which I didn’t do on my BMO Investorline account. Does anyone have experience with Options? I’m thinking about doing an Options straddle on the overall TSX index (say through an ETF of the index), basically buying both a call and a put. In that way, it doesn’t matter which direction the index moves, I’ll be making money on volatility and the market has certainly been full of THAT lately!!!

  7. Canadian Capitalist

    Sol: Absolutely. I’ll set up a category later today. Thanks!

    FT: Thanks for the correction. My account at Questrade just became active, so I’ll let you know how it went. Thanks for the referral.

    Phil: I have no experience whatsoever with options. I believe you can also make money on volatility by buying options on the VIX index. Larry MacDonald made a couple of posts on this topic.

  8. To clarify, the commission for a market order is $25.

  9. Hello my name is chris, I recently spoke to a friend , he advised me to look into penny stocks with bmo. now my question is how and where would one begin to invest in this type of investing? how much cash is the start up and how much would it be to maintain?
    thanks in advance
    chris

  10. Another heads up about BMO investorline, they offer $9.95 trades for household assets above $100k. Basically the same deal as TD Waterhouse.

  11. Chris, if you’re new to investing, STAY AWAY FROM PENNY STOCKS or you WILL lose your shirt. You need experience to trade them as they are very volatile and have a level of risk reserved for seasoned investors with the knowledge of short selling etc…

  12. BMO I would not give them my trust to invest my money since their advisers don’t know anything about investments they just follow orders. As well, you need to read the fine print and don’t trust a word they say. Their hidden fees and early withdraw fees are very high compared to the other major banks (about 10% of your investment for paybacks). Anyway as a simply trading house their ok, but their are cheaper alternitives like etrade.

  13. Wash trades available at BMO

    Just got this reply from BMO when I asked them about wash trades and US Cash in RRSP Accounts:

    “There is a long term plan to allow US$ cash in RRSP accounts. Unfortunately I can not provide a time frame as to when this will be offered. We do allow FX washes for stock trades in RRSP accounts. To arrange this please contact a BMO Investorline Representative during trading hours. A BMO InvestorLine Representative is available at 1-888-776-6886. The best time to call us would be right after both orders have been filled.”

  14. I’m not impress with the fees, service, and platform. Beside the transaction fees, you need to pay maintenance fees for tax free savings account investorline. The maintenance fees costs $50 per year. We already pay for transaction fees. Now, we have to pay maintenance fees. Come on, the $50 can easily eat up a big chunk of the whole year Term, and GIC interest. Plus, the $29 minimum per trade is hefty. Too hard to swallow. I’m going to switch to Scotia Itrade.

  15. Has anyone heard of any negative info about Credential Direct? According to their website the have won awards for being #1 four years in a row.

  16. Questrade is the absolute worst Online Brokerage in Canada. Their web site is continually down, their client service is terrible, they don’t answer the phone.
    There has to be a way to shut them down. You may save a couple bucks on a trade, but you will lose in the long term when you have 5000 shares go against you and you are unable to sell your position, or you have nice win, and you cannot sell because there server is down AGAIN.
    Words cannot express what a discrace this company is.

  17. As a BMO Bank of Montreal employee, I may be biased, but I wanted to point out that BMO InvestorLine has finally done away with the $50.00 yearly fee for TFSA. There is no minimum balance required. Here is the current fee schedule: https://www.bmoinvestorline.com/Commissions/FeesBrochureTFSA_March.pdf

  18. I’ve been an Investorline user for 12 years and an Active Trader for over a year, currently making over 100 trades a month. My frustration with Investorline is skyrocketing. If you trade penny stocks, run, don’t walk from Investorline. This platform can not accurately record half penny prices. Their third-party Streamer, is buggy and amateurish, and can not record half penny stock prices. I have written repeatedly over the past year and, not only have they done nothing about it, they always make it sound like it’s the first time they’ve heard about it.

  19. I was quite surprised to read the original review of Investorline comments that staff were prompt, knowledgeable and had the authority and technical no how to fix problems. My experience has been exactly the opposite. They have a few employees that might fit this bill, but 90% of my experience has been NO, or NO we can’t do that, or NO we won’t do that; but we will refer your comments to our black hole that no one in our organization ever considers or looks at (last part is obviously my thoughts and not their comments). The one thing I can say is they are always very polite when they are saying NO.

    • Poor guys are always overworked and are underpaid. Escalate the matter and try speaking with their senior managers. The front line staff is just a defense set by their senior managers to deter clients from directly speaking with them. I know it as I walked into their office in Downtown Toronto.

  20. I used Investorline & TDW for many years, finally became frustrated with BMO and decided to try Scotia iTrade discount brokerage. I cannot begin to tell you what a horrible mistake that was, but who was to know? Please take my advice and avoid Scotia. I do not believe everyone will have the same horrible experience, but why take a chance???

    Scotia is the brokerage from hell. Data is frequently lousy, glitchy, customer service is NOT knowledgeable (high turn-over?). Reported issues & discrepancies went unfixed for the whole time I was with them (>year). Quotes not updated for many stocks. I used comparitive quotes from other sources and found Scotia fails in a major way. DO NOT TRUST THEIR DATA! Calling customer service was a dead end, a vast black hole of wasted time. Their promises usually fell through. But that is the least of it though.

    DO NOT SHORT STOCKS WITH SCOTIA!!!! A former employee told me he knew of instances where they take shares from the discount clients (many times forcing a loss) and gave to their brokerage clients when the brokerage clients demand them (IE not triggered by margin or otherwise), and then lied to their discount clients. Certainly unethical, but isn’t this criminal??? What other atrocities do they commit?

    If you ever get into a tough predicament, as it seems you will with most on-line brokerages judging by all the reviews I have read, I can tell you first-hand that Scotia is the worst I have experienced and heard of and can possibly imagine, and I feel BMO seemed at least much more ethical and for the most part fair. I am still searching for a better brokerage though.

    (PS I used TDW sparingly so I cannot comment too much on them, but they seem to be at roughly the same level as BMO).

  21. The differences in the various online brokerages seem marginal except for the higher than average trading fee. One thing about switching sites is the time that it takes to become familiar with the new site. Each has their own idiosyncrasies which become more difficult to understand and work with as one gets older. Despite the odd bump in BMO’s Investorline road, I intend to stick with them.

    RAD

  22. Pingback: BMO InvestorLine to allow U.S. Dollar Registered Accounts | Canadian Capitalist

  23. Pingback: BMO InvestorLine: A Weaker Canadian Choice | Personal Finance Analyst

  24. Dear BMO:
    I have been trying for twenty minutes to log inot my account.

    No success.

    Why do you hide the sign in page among so much other stuff?

    Regards, Bill

  25. Anyone tried CIBC investors edge? I am thinking about to open an account from them . Are they good?
    Thx

  26. I have both BMO Investorline and CIBC Investor’s Edge accounts, 15 years with the former and one year with the latter. I am a long term conservative investor with a few trades every week. I am currently searching for another discount broker, need I say more?

    BMO – always polite, but I lost trust in them. They lost my transfer form containing sensitive info. Sometimes they don’t credit dividends so you have to watch out, and they mail T-slips very late, often way past the tax deadline.

    CIBC – lack manners. Unstable website, frequently out of order around 10:30 am, or would act up in the most random way. The trade entry is horridly designed. A nightmare interface, not user friendly and frustrating to use. They confuse user ID with account number which is pathetic.

  27. So I am currently exploring Disnat. Anyone have an opinion on them?

  28. after reading all these opinions from other traders , can someone please recommend a reliable website to trade on regardless of the fees . price is not as important as being able to get in and out of a trade when you want or need to . with all the money these companies make , you would think they would invest a lot more attention to keep their customers happy. being a former retailer , i’m very disappointed.

  29. Overall I’ve found BMO Investorline ok as far as equity and bond trading. Their customer support however is horrible and they regularily make “accounting” errors regarding account fees so if you have an account with them keep a close watch… the following is a response from BMO regardinging an incorrect account fee which probably has occurred with many other accounts that has not been spotted by the account holders…

    “Thank you for contacting BMO InvestorLine using MyLink. My name is Naeem and I appreciate the opportunity to respond.
    It can be upsetting to see a fee charged in the account, where overall, you maintain a high portfolio balance with InvestorLine.
    Like most accounts, BMO InvestorLine charges an administration fee for non-registered account and registered account.
    For this non-registered cash account, a quarterly fee is charged if the account balance is under $10,000. It is also waived if you hold an RRSP account, which you do. I have submitted a request to have this fee reversed for you and to fix this matter so this does not happen again. We apologize for this mishap and inconvenience this may have caused.
    I trust that you will find the above information helpful. Please feel free to contact us if you have any other questions or comments. Thank you for choosing BMO InvestorLine, we appreciate your business.

    Regards,
    Naeem Patel
    BMO InvestorLine
    Client Correspondence Specialist
    1-888-776-6886

    … just a computer software glitch on their end, but one that probably has made them big $$$.

  30. BMOInvestorline clients should always pay attention to missing dividends. This month alone I had to contact them three times for three missing dividends. I have numerous backdated items with BMOInvestorline I now wonder if they do this on purpose, because this has never happened with my other brokers. For BMOInvestorline clients out there, watch those dividends like a hawk. It is always in the back of my mind: f I hadn’t asked, would they not pay me?

    “Thank you for contacting BMO InvestorLine, my name is Rui and I appreciate the opportunity to respond.

    When a dividend is not received as expected it can be alarming. The dividend was paid to your account on September 18th and backdated to September 17th. You may review your transaction history screen, which is available under the My Portfolio tab.

    Please contact us if you have any questions or concerns. Thank you for choosing BMO InvestorLine, we appreciate your business.

    Sincerely,
    Rui da Silva
    BMO InvestorLine”

  31. There was an unacceptable practice BMO had done to my purchase order of 2300 MFC shares. The ex-dividend date was Nov. 16,2012. I placed the order on Nov. 15, 2012 for two consecutive days, knowing well if the order was filled on the 15th, I would get dividend; if it got filled on the 16th, I don’t get dividend. I didn’t care about the dividend. All I cared was if the order got filled at 11.70. So the price went down to 11.65 on the 16th. Knowing my order should have been filled I didn’t check the status of the order till end of the day. My order never got filled!!!. Phoned BMO and they said that the BMO system modified my purchase price to 11.57 to reflect the 0.13 drop after payout of dividend. But the market price had not got down to 11.57 so it was not filled.Today the share unit price has gone up by 0.33 just over the weekend. They said it was the industry standard, and all other financial institutes would do the same. This standard is silly, out-dated. Who cares about the little dividend nowadays! The market fluctuation is the biggy. I did not expressly modify it. So the trading system is not safe because it can modify your trade any way the system designer wants. One day you wake up and find you lost all the wealth is just because of the “system”. How many traders know what the designer thinks? I have to worry about the market, now I have to worry about how the system designer thinks? Crazy!! Can’t they just filled my order at 11.70 as I specified, and whether the dividend is paid or not we can go by the ex-dividend date rules. Trade on that day don’t get dividend if the duration of the order spans over a period of time. Please don’t modify the set price. How can we place an order and sleep? Hoping the system will execute my order the way I want. BMO went on to say had I place the order on the ex-dividend day then it would have been filled at 11.70. Why? Why my order was not treated as if it were placed on every new trading day? Why I have to check it every minute, as if the system is not trustworthy? Now I learned it is not trustworthy the painful way. If they claimed that they have the best system, why not implement a warning system relating to things that would happen to my order because the trading period spans over a period of time including the ex-dividend date?? To some this mistake can cost millions of dollars. One silly thing they said that the system lowers the unit price for me by 0.13 to compensate for the dividend payout. I then asked why not fill my order at 11.70 but charge me at 11.57 each share. You cannot decide for me to set at a lower price and let the market meet the lowered price. If BMO wants to compensate, just give me back the 2300 shares and charge me at 11.57 per share. Where is your logical mind?

  32. I found investorline has flaw in the system which caused me to lose close to $1500.00. Support team irresponsible.

  33. For the most part I have enjoyed working with BMO Investorline.
    My frustration came this one time lately when I had bought a stock with a special dividend and knowing the nature of the beast I immediately purchased a put option to maintain the price if it should drop. After the dividend was paid the stock did drop and I exercised my option. Things looked OK till I checked my account several days later and saw that they had taken back the dividend in it’s entirety. By that I mean that they took their commission for paying out the dividend but then when they reversed it they took their fee again. I called them and we basically had to agree to disagree. Since then I have been looking for another brokerage and may move. We will see how things progress from here.

  34. BMO Investorline continues to not credit my account for dividends. I have accounts elsewhere but this problem is unique to BMO Investorline. All customers should be very careful about this.

  35. 29.99 for ETF trading is horrible for small account holders. If you jave to rebalance once a year it can kill any gains you made. This forces you to hold positions you may not be completely happy with. I too am looking to ditch my investorline account.

  36. The main issue with BMO investorline is that they gdo not DRIP US stocks. Other Canadian banks such as Royal Bank’s Direct Invsting do, so is a better option.

  37. And on top of it they do not care about their clients anymore like they used to several years back. It is now converted to a call center where there is always a queue to speak with an tele-representative and then they rush you. I learnt that they moved their office also from the downtown toronto to a call center location and not it is just a call center. The downturn for this once upon great brokerage has begun. I would advise you to look for any other brokerage house as believe me you wouldn’t want to be stuck with another call center. They are understaffed and overworked. My sympathies with their tele-representatives.

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