BMO Harris Investment Management Inc., the investment management arm of BMO Harris Private Banking, has announced changes to the fees and expenses that are charged to the BMO Harris Private Portfolios and to trading commissions charged for client investment accounts.
Effective Oct. 1, 2012, BMO Harris said that its standard flat trading commission will be reduced from seven cents to four cents per share for equities traded directly in a client’s investment account.
In addition, to enhance transparency about costs, BMO Harris said the investment management fee charged to client accounts will cover up to 0.15% of any sub-advisors’ fees in respect of the portfolios; while fees in excess of 0.15% will be paid by the portfolios as part of their operating expenses.
BMO Harris has negotiated sub-advisory fees of 0.15% or less for most portfolios, which means that most will not be impacted by this change. Currently, however, four of the 14 portfolios have sub-advisors whose fees are higher than 0.15%, reflecting the cost of investing in certain markets.
To improve clarity about operating costs, BMO Harris said operating expense caps on the portfolios – which are often much higher than actual expenses – will be removed to clarify that the caps are not the actual expenses of the portfolio.
Operating expenses incurred by a portfolio will continue to be paid by that portfolio; however, BMO Harris said that it may, from time to time at its discretion, absorb some of a portfolio’s operating expenses.