Bank of Montreal (BMO) IRA Review

BMO ROTH IRA review, Traditional IRA, Rollover, RightTrack IRA. Bank of Montreal IRA fees, rates, APY/APR, promotion offer code for 2020. Is Bank of Montreal IRA good and safe way to invest?

When potential investors are a long way from retirement, it can be difficult to determine what is the best retirement plan for their needs, either from inexperience, low capital or undefined long term financial goals. That said, many young investors will often consult with an in house broker at their bank due to convenience and no up front cost.

Bank of Montreal offers such services, and will offer to set clients up in a brokerage meeting as soon as his or her accounts are transferred over to them, making BMO brokers very accessible to all their banking clients. While these brokers and the plans they offer are certainly convenient, they may not always be the best choice, depending on the IRA needs of the individual in question.

Firstly, Bank of Montreal (BMO) offers a few types of IRAs. The traditional IRA, SEP IRAs, and the Roth style IRA. The traditional IRA being one with fairly strict income requirements intended for a user of a certain tax bracket, the SEP being for employers and the self employed, which follows traditional IRA withdrawal rules and the Roth being more flexible with contributions and withdrawal of funds. Within the Roth IRA category, BMO has a specially branded IRA they offer exclusively, called RightTrack.

RightTrack's promise is to simplify complicated investment choices while making them customizable for each user to maximize potential benefits. The RightTrack IRA offers four different investment choices, and within those choices, each user can determine their own personal level of risk. The choices include:

BMO Funds, which require an annual investment of $1,000 per fund, and no maintenance fees while offering a variety of different fund options.

Select Funds, which offers to 'simplify' the mutual fund process with 40 prescreened funds, and offers no minimum or annual fees for balances over $25,000.

Managed Asset Allocation Portfolio is suggested by BMO for those who want to take a less involved role in the managing of their income. BMO offers 6 different 'asset mixes' or risk levels depending on the level of risk the investor wants to take and requires a minimum of $25,000 with fees based on the account balance.

Direct Brokerage is the final selection, which allows clients to determine what best fits their needs with a BMO broker who will personally manage supervise the investment portfolio of the client as opposed to the other strategies listed above which do not offer such close monitoring.

Continue Reading

Over all, RightTrack is a great investment strategy if the client's investment goals are not well defined, if they have never invested, or if they don't have a lot of flexibility with their money. The choices offered are varied enough that they will suit most potential clients in this bracket, and there is the added bonus of all the benefit one reaps of investing through the bank. Clients are able to watch their investment accounts through their online banking portal and if any questions or concerns arise, clients can make an appointment with their broker, or call the bank investment specialists on the phone. While both teams are incredibly helpful, it is recommended to speak to a broker in person at a bank branch if at all possible. The wait times to speak to a team member over the phone are long, and they review and try and modify the client's investments each time he or she calls. This makes the call, which already took awhile once wait times are factored in, longer than it needs to be, leaving the experience feeling less the high class investment experience that BMO tries to offer and more like a call centre sales shill.

Keeping in mind everything outlined above, that BMO is trying to cater to the direct brokerage crowd may perhaps be a bit beyond their reach. Other banks have managed to turn their direct brokerage investment experience into something exclusive, like RBC and their private banking division. BMO's reputation is more of one of every day banking, and the RightTrack reflects that.

Another problem with direct brokerage is BMO investments and mutual funds, like many banks have been appraised and audited internally, as opposed to investment houses, who typically get outside companies to examine their offerings. Each group is going to be biased towards what they are able to offer investors, but external assessment is usually a bonus for the client, and a good reason in and of itself to seek an external investing house if direct brokerage is required.

In short, BMO's IRA options are extensive, and the average investor will more than likely be able to find something that suits their needs and performs to their expectations, particularly in the RightTrack selection. Direct Brokerage is not required for most investors planning for retirement, so the critiques of potential problems with BMO Direct Brokerage will most likely only apply to a few potential investors.

There are other great, well-known, highly rated brokerage firms available offering no-fee IRAs, plenty of investment choices (including no-load mutual funds) and very reasonable pricing, like Ally Invest (IRA review) or Etrade (IRA review).

Continue Reading