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BMO InvestorLine drops all trading commissions, forcing Canada's discount brokers to respond
BMO InvestorLine drops all trading commissions, forcing Canada's discount brokers to respond
The last major holdout among Canada's Big Five banks capitulated on Wednesday, announcing that its 300,000 active clients will pay nothing to trade stocks or ETFs starting immediately. BMO InvestorLine's reversal completes a process National Bank Direct Brokerage started in 2021 when it became the first bank-affiliated platform to adopt the $0 model. Four years later, every major bank platform has matched.
The timing matters. Wealthsimple has held roughly 3 million accounts since 2024, most of them opened by investors under 35 who never paid a commission and never will. BMO's decision acknowledges that the old $9.95-per-trade pricing was keeping entire cohorts of young investors from opening accounts. The question was never whether BMO would move to zero. The question was how long it could afford to wait while competitors captured the early investing years of clients who might otherwise have stayed in-house for mortgages, credit cards, and eventually wealth management.
What actually changed and what didn't
The announcement covers stocks and ETFs traded digitally. It does not cover telephone-assisted trades, which remain expensive enough to deter casual use. Options now carry no commissions, with a reduced per-contract fee of $0.90 (down from $1.25). The "commission-free" label also omits the currency conversion spread, which BMO quietly charges at roughly 1.5% to 2% whenever a client trades U.S.-listed securities in a Canadian-dollar account. That spread, invisible on the trade confirmation, often costs more than the old $9.95 commission on any purchase above $600.
Annual account fees have been eliminated for all registered accounts (RRSP, TFSA, RESP) effective September 14, 2026. Account administration fees have been eliminated, removing a barrier for new investors building their first positions. Wealthsimple and Questrade do not charge these fees at any balance level, so younger investors treating an investment account like a high-interest savings vehicle tend to open accounts there first. Bank platforms have historically treated investing as a service for clients who already have substantial assets. Commission-free trading inverts that logic. BMO is now treating the investment account as the entry point, hoping to cross-sell mortgages and insurance once the client's net worth justifies the conversation. The brokerage becomes a loss leader in a bundled relationship.
The regulatory reason Canada took longer
Payment for Order Flow (PFOF), the practice of selling client orders to market makers in exchange for a rebate, is effectively prohibited in Canada. In the U.S., this revenue stream allowed Robinhood and others to drop commissions in 2019 while still monetizing each trade. Canadian platforms cannot do that. Their $0 commissions are genuinely $0 on the revenue side, which is why the shift took longer and why the business model relies so heavily on capturing deposits, lending balances, and ancillary fee products.
The Canadian Investment Regulatory Organization (CIRO) enforces strict best-execution standards that prevent brokers from routing orders based on kickback arrangements. This constraint makes the race to zero more expensive in Canada than elsewhere, and it explains why even now, in September 2026, some smaller brokerages still charge per-trade fees while their U.S. counterparts abandoned them seven years ago.
Bank-owned platforms are absorbing the cost because they can cross-subsidize from other lines of business. Independent brokerages without banking licenses face harder math. The result is a two-tier market where the largest institutions compete on price and the smaller specialists compete on speed, research tools, or niche products like direct market access for active traders.
BMO's move closes the pricing gap. What it does not close is the experience gap. Wealthsimple's mobile-first interface and instant account funding still outpace the legacy architecture most bank platforms rely on, and that gap will matter more as the next generation of investors decides where to open their first account.
BMO InvestorLine drops all trading commissions, forcing Canada's discount brokers to respond
The last major holdout among Canada's Big Five banks capitulated on Wednesday, announcing that its 300,000 active clients will pay nothing to trade stocks or ETFs starting immediately. BMO InvestorLine's reversal completes a process National Bank Direct Brokerage started in 2021 when it became the first bank-affiliated platform to adopt the $0 model. Four years later, every major bank platform has matched.
The timing matters. Wealthsimple has held roughly 3 million accounts since 2024, most of them opened by investors under 35 who never paid a commission and never will. BMO's decision acknowledges that the old $9.95-per-trade pricing was keeping entire cohorts of young investors from opening accounts. The question was never whether BMO would move to zero. The question was how long it could afford to wait while competitors captured the early investing years of clients who might otherwise have stayed in-house for mortgages, credit cards, and eventually wealth management.
What actually changed and what didn't
The announcement covers stocks and ETFs traded digitally. It does not cover telephone-assisted trades, which remain expensive enough to deter casual use. Options now carry no commissions, with a reduced per-contract fee of $0.90 (down from $1.25). The "commission-free" label also omits the currency conversion spread, which BMO quietly charges at roughly 1.5% to 2% whenever a client trades U.S.-listed securities in a Canadian-dollar account. That spread, invisible on the trade confirmation, often costs more than the old $9.95 commission on any purchase above $600.
Annual account fees have been eliminated for all registered accounts (RRSP, TFSA, RESP) effective September 14, 2026. Account administration fees have been eliminated, removing a barrier for new investors building their first positions. Wealthsimple and Questrade do not charge these fees at any balance level, so younger investors treating an investment account like a high-interest savings vehicle tend to open accounts there first. Bank platforms have historically treated investing as a service for clients who already have substantial assets. Commission-free trading inverts that logic. BMO is now treating the investment account as the entry point, hoping to cross-sell mortgages and insurance once the client's net worth justifies the conversation. The brokerage becomes a loss leader in a bundled relationship.
The regulatory reason Canada took longer
Payment for Order Flow (PFOF), the practice of selling client orders to market makers in exchange for a rebate, is effectively prohibited in Canada. In the U.S., this revenue stream allowed Robinhood and others to drop commissions in 2019 while still monetizing each trade. Canadian platforms cannot do that. Their $0 commissions are genuinely $0 on the revenue side, which is why the shift took longer and why the business model relies so heavily on capturing deposits, lending balances, and ancillary fee products.
The Canadian Investment Regulatory Organization (CIRO) enforces strict best-execution standards that prevent brokers from routing orders based on kickback arrangements. This constraint makes the race to zero more expensive in Canada than elsewhere, and it explains why even now, in September 2026, some smaller brokerages still charge per-trade fees while their U.S. counterparts abandoned them seven years ago.
Bank-owned platforms are absorbing the cost because they can cross-subsidize from other lines of business. Independent brokerages without banking licenses face harder math. The result is a two-tier market where the largest institutions compete on price and the smaller specialists compete on speed, research tools, or niche products like direct market access for active traders.
BMO's move closes the pricing gap. What it does not close is the experience gap. Wealthsimple's mobile-first interface and instant account funding still outpace the legacy architecture most bank platforms rely on, and that gap will matter more as the next generation of investors decides where to open their first account.
Sources
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