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BMO Wealth Management Review

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BMO Wealth Management

BMO Wealth Management, headquartered in Chicago, Illinois, is a large financial advisor firm with more than $4 billion in assets under management (AUM). It has about 240 financial advisors on staff, and while the firm’s offices are mostly in the Midwest, you can also find them in a couple of Florida cities.

BMO Wealth Management provides a variety of financial planning and investment management services to a range of clients. Unlike some other large firms, the minimum account size is quite low: just $20,000. There is a wide range of management plans but management fees are also relatively low overall. Continue reading to learn more about the firm’s fees, services and investment strategies.

BMO Wealth Management Background

BMO Wealth Management, which was formed in 2005, is a part of the same company that owns BMO Harris Bank. The bank is one of the largest in the country and has a particularly prominent presence in the Midwest. Similarly, the financial advisor firm has a major footprint in the Midwest. Not many other locations where BMO Wealth Management operates have a physical office. But in and around Tampa, Florida, the firm does have a number of brick-and-mortar offices. Before becoming BMO Wealth Management, the firm’s predecessor operated a number of offices in Florida. That’s why there are still some offices and advisors operating in the state, even though the rest of the firm’s advisors are in the Midwest.

What Types of Clients Does BMO Wealth Management Accept?

BMO Wealth Management works with a variety of clients. It provides services to individuals, trusts, non-profit organizations, corporations and retirement accounts. The firm works with individuals both with and without high net worths. Some of the firm’s clients have accounts worth as little as $20,000 while some advisors may target their services to clients with an AUM of more than $1 million.

BMO Wealth Management Minimum Account Sizes

As mentioned, BMO Wealth Management works with clients who have various account sizes. There are generally four investment minimums for client accounts: $20,000, $75,000, $100,000 and $250,000. The minimum varies by program types, as we explain later in the review.

Services Offered by BMO Wealth Management

You can get a number of wealth management and financial planning services from BMO Wealth Management. Services that an advisor can help you with include:

  • General wealth planning
  • Investment management
  • Retirement planning
  • Tax planning
  • Trust and estate planning
  • Insurance and risk management
  • Business planning
  • Assistant with banking and borrowing

Advisors can also help clients to plan and prepare for a number of normal life situations, such as changing jobs, starting a family, starting a business or becoming an empty nester.

BMO Wealth Management Investment Philosophy

The first step in creating an investment account is always for an advisor to meet with the prospective client. The advisor will attempt to learn more about the client’s financial situation, investment objectives, time horizon and risk tolerance. After this meeting, the advisor can decide which kind of program the client is best suited to take part in. (The programs are detailed in the next two sections.)

In terms of general investment philosophy, advisors tend to favor investing in mutual funds and exchange-traded funds (ETFs) over individual securities. And instead of necessarily focusing on the best securities, advisors attempt to create the best asset allocation for each client. This could include a range of investment types, industries and/or market sectors. The exact types of investments and their allocation will depend on the individual client.

Fees Under BMO Wealth Management

The fees that you pay with BMO Wealth Management depend on your portfolio and the exact investment program that that you use. The programs are tailored to clients with certain account sizes, objectives or risk tolerances.

If you’re investing with BMO Wealth Management, you can expect to pay a wrap fee. This is a single management fee that covers the costs of all advisory, brokerage and custodial services. All commissions the firm charges are included in the wrap fee as well. This fee is represented as a certain percentage of your AUM. The fee generally ranges from a high of 1.50% for accounts with balances of less than $250,000, to a low of 0.60% for accounts with more than $1 million in AUM.

The firm calculates and charges account management fees monthly, in advance, starting from the day you open your account. The result is that you pay the fee for the upcoming month. Should you terminate your account, the firm will refund any prepaid fees.

Note that in addition to management fees, you may need to pay additional fees from third parties. For example, trading certain mutual funds can result in brokerage commissions or transaction fees with the broker through which you are trading the fund.

Investing Programs From BMO Wealth Management

Of all the management programs offered by the firm, BMO Small Account Solutions has the lowest minimum account size required. It is available to clients with an account worth just $20,000. There is no maximum account size, though it’s possible that advisors will recommend other programs to clients with more assets. It’s worth noting that no matter the size of your account, you will need to pay at least a minimum annual fee. This is true of all the programs listed below.

BMO Small Account Solutions   
Account Assets Capital Preservation Portfolio  Income Portfolio All Other Target Allocations Tactical
First $250,000 1.00%  1.25% 1.50% 1.75%
Next $250,000 ($250,000 to $500,000) 0.85%  1.00% 1.25% 1.50%
Next $250,000 ($500,000 to $750,000) 0.75%  0.85% 1.00% 1.25%
Next $250,000 ($750,000 to $1 million) 0.65% 0.75% 0.85% 1.00%
Balance over $1 million 0.60% 0.70% 0.75% 0.85%
Minimum Account Fee $150 $185 $225  $250

The Strategic Fund Portfolio is one of four programs that require a minimum account size of $75,000.

Strategic Fund Portfolio
Account Assets Annual Fee
First $250,000 1.50%
Next $250,000 ($250,000 to $500,000) 1.25%
Next $250,000 ($500,000 to $750,000) 1.00%
Next $250,000 ($750,000 to $1 million) 0.85%
Balance over $1 million 0.75%
Minimum Account Fee $1,000

The minimum of the Income Opportunities Portfolio is also $75,000.

Income Opportunities Portfolio
Account Assets Annual Fee
First $250,000 1.25%
Next $250,000 ($250,000 to $500,000) 1.00%
Next $250,000 ($500,000 to $750,000) 0.85%
Next $250,000 ($750,000 to $1 million) 0.75%
Balance over $1 million 0.70%
Minimum Account Fee $750

The BMO Choice and BMO Flex account options come with a minimum account size of $75,000. However, at an  advisor’s discretion, it is possible to open one of these accounts with less than the minimum of $75,000. In those situations, the annual management fees may also be less than the fees listed below.

BMO Choice and BMO Flex   
Account Assets Capital Preservation Model Income Model All Other Models
First $250,000 1.00% 1.25% 1.50%
Next $250,000 ($250,000 to $500,000) 0.85% 1.00% 1.25%
Next $250,000 ($500,000 to $750,000) 0.75% 0.85% 1.00%
Next $250,000 ($750,000 to $1 million) 0.65% 0.75% 0.85%
Balance over $1 million 0.60% 0.70% 0.75%
Minimum Account Fee $500 $750 $1,000

The Managed Asset Allocation Portfolio (MAAP) comes with a required account minimum of $75,000 and  no maximum account size. Note that the fees listed in the schedule below apply to accounts opened on or after April 23, 2012. Accounts opened prior to that date are subject to a different fee schedule.

Managed Asset Allocation Portfolio (MAAP)
Account Assets MAAP Fixed Income Strategies MAAP Diversified Income Strategy MAAP Equity/Balanced Strategies
First $250,000 1.00% 1.25% 1.50%
Next $250,000 ($250,000 to $500,000) 0.85% 1.00% 1.25%
Next $250,000 ($500,000 to $750,000) 0.75% 0.85% 1.00%
Next $250,000 ($750,000 to $1 million) 0.65% 0.75% 0.85%
Balance over $1 million 0.60% 0.70% 0.75%
Minimum Account Fee $500 $750 $1,000

The Wilshire Advisor Solutions program comes with an account minimum of $100,000. Much like the other accounts from the firm, there is no maximum.

Wilshire Advisor Solutions
Account Assets Account Fee
First $250,000 1.00%
Next $250,000 ($250,000 to $500,000) 0.85%
Next $250,000 ($500,000 to $750,000) 0.75%
Next $250,000 ($750,000 to $1 million) 0.65%
Balance over $1 million 0.60%
Minimum Account Fee $750

The MAAP Plus Managers and Flex Plus Managers programs feature the highest minimum account size at BMO Wealth Management. The smallest account size for these programs is $250,000. In addition to the fees listed in the table below, accounts that are managed with a separate account manager (an advisor outside of BMO Wealth Management) carry an additional fee ranging from 0.35% up to 0.70%. The portfolio manager will determine this fee. There is also a 0.25% access fee assessed on the client’s AUM.

MAAP Plus Managers and Flex Plus Managers
Account Assets Capital Preservation Model Income Model All Other Models
First $250,000 1.00% 1.25% 1.50%
Next $250,000 ($250,000 to $500,000) 0.85% 1.00% 1.25%
Next $250,000 ($500,000 to $750,000) 0.75% 0.85% 1.00%
Next $250,000 ($750,000 to $1 million) 0.65% 0.75% 0.85%
Balance over $1 million 0.60% 0.70% 0.75%
Minimum Account Fee $2,250 $2,825 $3,375

The fee schedule for the Flex Plus Managers program differs slightly if the client’s account is entirely managed by an account manager outside of BMO Wealth Management. It only requires an account minimum of $100,000, unlike the standard Flex Plus Managers program. That fee schedule is the same as the “Income Model” listed in the table above. 

Estimated Fee Comparison*
Your Assets BMO Wealth Management Strategic Fund Portfolio National Median Advisory Fees**
$500K $6,875 $5,000
$1MM $11,500 $8,500 - $10,000
$5MM $41,500 $25,000 - $32,500
$10MM $79,000 $50,000
*Fee estimates only consider the maximum base fees for the services each firm provides. You may also pay manager fees and other fees, which can vary in amount. **All figures are based on median fee levels according to Bob Veres' 2017 Planning Profession Fee Survey. The above estimates solely take into account AUM-only fees. Total costs will likely be higher due to additional expenses.


What to Watch out For

Based on BMO Wealth Management’s disclosures mentioned below, it’s especially important to ask the firm about the risks of investing in certain securities. No matter how much you are investing, it’s always a good idea to make sure you talk to your advisor and really understand what kinds of investments you’re making.

Financial advisors at BMO Wealth Management may earn a commission or separate compensation for selling certain insurance or financial products. However, remember that the firm and its advisors do have a fiduciary duty that requires them to act in the best interests of their clients.

Disclosures

BMO Wealth Management has been subject to disciplinary actions over the past 10 years. Two instances are highlighted in the firm’s Form ADV (SEC-filed paperwork).

The firm consented to a fine from FINRA (Financial Industry Regulatory Authority), which accused it of inadequately disclosing the risks of investing in ARS, auction rate securities. The firm was accused of failing to adequately disclose to investors that the marketplace for such securities was highly illiquid. When the ARS marketplace froze in 2008, investors could not withdraw money from their accounts. BMO Wealth Management paid a $150,000 fine to FINRA without admitting to or denying the allegations. FINRA also required the firm to submit to a buyback offer in which the firm purchased auction rate securities from investors who made eligible ARS purchases.

In a second event, M&I Financial Advisors, which was the predecessor of BMO Wealth Management, was sanctioned by state securities regulators. The firm paid a $20,000 fine to the Florida Office of Financial Regulation for conducting securities transactions at 10 locations that were not registered with the Office.

Opening an Account With BMO Wealth Management

You can learn more about working with BMO Wealth Management through the BMO Harris website. On the website, you’ll find a “Wealth” tab at the top. You will then see links to pages that address specific financial goals or challenges, such as changing jobs or growing your retirement savings. The site also includes a way to search for financial advisors near you. Contact information for individual advisors is available on the site.

If you aren’t sure exactly what help you need, there is also an option on the website to input your contact information so that an advisor can initiate contact.

Where Is BMO Wealth Management Located?

The headquarters of BMO Wealth Management are in Chicago, Illinois. It’s in a multi-building complex with the BMO Harris Bank headquarters. However, you can find individual financial advisors in many locations throughout the Midwest. You can also find some advisors in Florida. The BMO Harris website has a page that allows you to search for offices and financial advisors near you.

Tips for Finding a Financial Advisor

  • Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • People often look for financial advisors when they want some help calculating how much they need to save for retirement. However, advisors at BMO Wealth Management and elsewhere can help you with a lot more than just retirement planning. For example, they can help you save for specific goals like buying a home or saving for college. As you advance in your career, they can help you navigate estate planning. Even if you handle your investments on your own, it can be useful to consult with a financial advisor occasionally.

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research