Big bank goes robo

Big bank goes robo

Big bank goes robo

The Globe and Mail announced Monday that the Bank of Montreal will launch its own robo advisor by the end of the year bringing the big banks into the fight for online supremacy.

The bank’s retail broker, BMO Nesbitt Burns Inc., is launching the robot advisor which will leverage its existing adviceDirect platform according to multiple sources within BMOs wealth management business.

BMO is the second ETF provider to set up their own robo advisor. Questrade established a service earlier this year to provide online portfolios to advisors. 

The entry of the first big bank will definitely heat up the competition for online investors and although the products to be offered on BMOs new platform have yet to be announced it’s bound to give the bank a leg up on the competition.

“We’re working on an exciting new service for Canadian investors and look forward to sharing more details in the near future,” a BMO spokesman told The Globe and Mail in an e-mail.

The competition have been bracing for this day for some time so it comes as no surprise they’ve already been commenting on the banks entering the fray.

“I challenge the big banks to join us in creating a new kind of platform that puts clients first, and avoids the high costs, low transparency and basic technology of their current offerings,” Wealthsimple CEO Michael Katchen told the Globe and Mail.

Questrade CEO Edward Kholodenko is more matter of fact about the banks.

“We don’t see the entrance of a bank as a competitive threat but as a validation of our industry,” Kholodenko told the Globe and Mail. 

The question now is when will the other big six banks make a move? M&A is sure to heat up as a result. 

2 Comments
  • kathy Waite Your Net Worth Manager 2015-10-05 1:24:48 PM
    This just proves how the big banks know once CRM2 is fully implemented and people see what they have been paying , start asking questions about returns they know there will be clients leaving. Launching this is an indirect indictment of their own distribution channels gouging and lack of care for the small clients. Bank advisors should be very worried , in the Uk the top 3 all did away with the sales force for small clients only the HNW survive.
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  • George Christison (InvestigForMe.com) 2015-10-08 2:46:18 PM
    More than anything, I think the banks see Robo-Advisors as a solution for the next generation of Canadians - all those "small" investors they refused to accept as clients at the full-service brokerage firms (because they didn't have $250,000 or more to invest) and those investing at the branch level (bleeding them with high mutual fund costs). Robos give the banks a new way of holding onto investors' money and the fees they pay. Let's face it, over the past 20 years, investment advisors have been reduced to "puppets" for the money managers in Toronto. So does it really matter if we buy our investments from a Robot or a Puppet??
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