Bank of Montreal becomes first Big Five bank to eliminate most online trading commissions

https://www.theglobeandmail.com/business/article-bank-of-montreal-becomes-first-big-five-bank-to-eliminate-most-online

Summary

• BMO InvestorLine will introduce unlimited commission-free online trading on stocks, ETFs and options starting September 14.
• Options will carry no trading commission, although the per-contract fee is being reduced rather than eliminated.
• BMO is also eliminating brokerage account administration and transfer-out fees.
• The strategy targets younger investors and responds to competition from Wealthsimple, Questrade and National Bank Direct Brokerage.
• The immediate revenue loss appears manageable: InvestorLine represents about 9% of BMO Wealth Management revenue, while its broader value is bringing clients into banking, advisory and private-wealth services.

Strategic Impact

BMO is sacrificing transaction-fee revenue to attract more customers, increase assets under administration and deepen relationships across the bank. InvestorLine’s assets grew at a 14% compound annual rate from 2020 to 2025, with clients under 35 its fastest-growing segment.

The move is strategically positive for customer acquisition but could pressure competitors—particularly other major-bank brokerages—to lower their commissions. National Bank already offers commission-free trading, although it is Canada’s sixth-largest bank and therefore outside the Big Five.

Implications for BMO

Short term: Slightly negative for fee revenue and potentially higher technology and platform costs.

Long term: Potentially positive if BMO converts InvestorLine users into mortgage, deposit, advisory, private-banking and wealth-management clients.

Key risk: Zero commissions will not create lasting customer loyalty unless BMO’s platform, research, execution quality and customer service remain competitive.

Bottom line: This is more of a customer-acquisition and cross-selling strategy than a material near-term earnings event for BMO. It raises competitive pressure across Canadian discount brokerages but is unlikely, by itself, to materially affect BMO’s overall valuation.