Bank of Montreal's roboadviser SmartFolio is looking to draw in more millennial investors by lowering its minimum account size to $1,000 from $5,000.
"We heard from people who were new to investing that the $5,000 threshold was quite high for them to start off with," said Silvio Stroescu, head of digital investing for BMO. "We noticed that we don't have a lot of clients who are new to investing, and we want to shift down a path for those Canadians who haven't started to invest yet to begin to invest with Smartfolio."
Robo-advisers – also referred to as online portfolio managers or digital advisers – offer clients an online risk-assessment tool which quickly calculates an appropriate asset allocation based on age, financial goals and risk tolerance. The online tools have been quickly expanding in Canada with more than 15 providers in the market.
While at first it was thought millennials would be the largest age group to use roboadvisers, Mr. Stroescu noted that the adoption has been "age agonistic."
There are no changes to account fees, which will remain at 0.7 per cent for the first $100,000 invested. Fees gradually drop as the account size increases – to 0.4 per cent on assets over $500,000. As a result of the new lower minimum account balance, the current minimum fee of $60 per year has been eliminated.
BMO was the first bank to launch a robo-adviser platform in 2016. Last month, RBC was the second bank to launch a pilot roboadviser platform, RBC InvestEase.