Bank of Montreal (BMO) is eliminating trading fees for individual retail investors as it faces growing competition from discount brokerages.
In a statement, Bank of Montreal said that its self-directed investing platform will begin offering commission-free trading on all stocks and exchange-traded funds (ETFs).
Bank of Montreal is the first of Canada’s big banks to eliminate commissions on stock and ETF trading for investors
The bank is also eliminating administration fees and lowering option trading costs by reducing contract fees and ending commissions.
The changes to Bank of Montreal’s trading fees will take effect on Sept. 14 of this year.
The move to eliminate trading and other fees comes as Canada’s big banks face growing competition from discount brokerages, particularly U.S. firms.
Interactive Brokers (IBKR), Robinhood Markets (HOOD), and Coinbase Global (COIN) are each entering and expanding their operations in Canada and chasing retail investors.
Market surveys show that younger investors with smaller account balances view fees and commissions negatively and are sensitive to trading costs.
Robinhood Markets, which entered the Canadian market with its acquisition of cryptocurrency firm WonderFi in June of this year, offers commission-free trading on stocks, ETFs and options.
Commission-free trading is common among discount and online brokerages operating in the neighbouring U.S.
It remains to be seen if Canada’s other big banks will follow Bank of Montreal’s lead and also eliminate trading fees for investors.
BMO stock has risen 36% in the last 12 months to trade at $238.32 a share in Toronto.
