# BMO Lifetime Cash Flow



## Larry6417 (Jan 27, 2010)

Any opinions on this product?

Superficially, it looks like a GLWB product, but with some wrinkles. BMO uses its own funds/ PPNs (principal protected notes) though some advertising mentions the possibility of using BMO ETFs in the future. BMO's propaganda, I mean advertising, claims a MER of only 2.75%, substantially lower than other products. However, according to the fine print, BMO uses PPNs, which come with a built-in cost to the consumer even if no additional MER is charged.

Also, I dislike that your money is locked in for a minimum of 10 years, and the composition of your funds is automatically changed to a more conservative asset allocation as you age. GMWB products that allow a high equity asset allocation with automatic re-sets may have a superficially higher fee, but may actully grow substantially larger than a product composed of PPNs.

I don't think this is a product I would ever be interested in (I'm not old enough anyways), but as a BMO *shareholder*, I fully endorse the product. 

See www.bmo.com/home/personal/banking/investments/mutual-funds/funds/managed-programs


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## cannon_fodder (Apr 3, 2009)

Larry6417 said:


> Any opinions on this product?
> 
> Superficially, it looks like a GLWB product, but with some wrinkles. BMO uses its own funds/ PPNs (principal protected notes) though some advertising mentions the possibility of using BMO ETFs in the future. BMO's propaganda, I mean advertising, claims a MER of only 2.75%, substantially lower than other products. However, according to the fine print, BMO uses PPNs, which come with a built-in cost to the consumer even if no additional MER is charged.
> 
> ...


http://forums.redflagdeals.com/bmo-...t-interesting-model-what-do-you-think-994174/

Consensus - bad for you while great for bank.


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## Financial Cents (Jul 22, 2010)

Based on almost 3% MER, I wouldn't buy it, but I'm in my mid-30s and not mid-60s needing cash yet. Owning a few hundred shares of BMO that pays dividends would be a much better, cheaper, and more lucrative play.


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## Brian Weatherdon CFP (Jan 18, 2011)

I recently figured (correct me if I'm wrong) that if the money is locked in for 10 years, and at that point it starts paying $6000 per $100K originally contributed, that I couldn't find any scenario where the likely return would exceed 4%. And it's locked in! Doesn't work for me. 

That's my personal and considered opinion.


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## LBCfan (Jan 13, 2011)

I think it's a great deal. BTW, I own BMO stock.


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## Brian Weatherdon CFP (Jan 18, 2011)

LOL of course it's a great deal.....if you own BMO stock. I'd much prefer owning BMO stock and of course forego the presumed guarantee structure. Personally speaking


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