Cost benefit analysis of custodian providers (Maybank vs CDP/Philips vs SCB)
General Sentiment
After attending the investment seminar talk held at suntec city on 06/08/17, my general impression is that there has been an active interest between the brokers in offering competitive rates for their brokerage services. There are a lot of proficient speakers there, ranging from the bond experts at fundsupermart, general brokerage providers, investing-note (Facebook for investors) as well the dubious schemes promoting quick to rich schemes with 99% of beating the market. I really enjoy those talks but that will be a post for another day.
The general trend of brokerages now (borrowing ideas of SCB low cost model) is to create a savings account at their brokerage so that they will have a much lower credit risk if client have insufficient funds to make the trade. That way, they can reduce default risk, trade timing issues, turnabout trades, buy in issues and also bolster the amount of funds accessible to them. SCB took one step further by not even setting up booth at that investment event to cut costs! I have to take an extra mile to go down to their branches and on the internet. on a separate day to pull out their custodian account details. DO take note that all materials in comparison is with respect to SG market, I cannot vouch the same for foreign markets.
Philips Capital (CDP)
1) SGD25 per transaction to CDP (Need to make a trade of more then SGD 2,500 to keep the trading cost to 1%)
2) 0.0325% clearing fee + 0.0075% transfer fee = 0.04% sunk cost fee (not worth considering)
3) In the long run, since CDP is backed by the government, technically speaking it is more 'safe' then nominees accounts held at respective custodians. There will also be 0 custody fees so in the event that there is market collusion to increase custody fees, I may have to reassign my holdings from custodian accounts to CDP.
4) If the broker is facing serious issues that may threaten to pierce the corporate veil via the nominee accounts system, I may have to reassign my holdings from custodian accounts to CDP.
Philips Capital (prepaid custodian account, Very uncompetitive)
1) Prerequisite to conduct one trade every quarter to waive off other charges
2) 0.12% of contract value, min SGD10 per counter (If investment is less than SGD8,333.33, will just charge SGD10)(Just need to invest SGD1,000 to keep the transaction cost to 1%)
3) 0.0325% clearing fee + 0.0075% transfer fee = 0.04% sunk cost fee (not worth considering)
Philips Capital (Share builder Plan, Very uncompetitive)
https://www.phillip.com.sg/stocks-a-shares/share-builders-plan.htmlFixed cost of SGD6 (+ 0.04%) per month, which translates to a prerequisite to invest 2 stocks and up to SGD600-999 to keep the transaction fee to 1%. If you cannot meet this criteria there are simply better options elsewhere
As my holdings are still small inside Philips, the current plan is to keep my holdings into Philips so that I will not incur the SGD10 admin transfer fee per counter. That way, I still enjoy the benefits of using POEMS analytics and maybe other promotions if they got something better to offer.
Going forward, I will most likely be conducting trades vis custodian services.
MayBank Kim Eng Pre-funded SGD Nominees (Most competitive even than SCB!)
1) 0.12% of contract value, min SGD10 per counter (If investment is less than SGD8,333.33, will just charge SGD10)(Just need to invest SGD1,000 to keep the transaction cost to 1%)
2) 0.0325% clearing fee + 0.0075% transfer fee = 0.04% sunk cost fee (not worth considering)
3) Savings of SGD50 (waive off transaction fees of 5 trades)
4) SGD Custody Fee waived
5)Corporate Actions fees waived
Dividend fee
Cash issues
Rights
6) Applicable transfer out fee (NCBO) SGD50 per counter
MayBank Monthly Investment Plan (Preferred choice going forward if DCA)
1) For DCA less than SGD1,000, 1% of contract value, min SGD10 per counter
i) If investment is less than SGD100, will still be $1)
ii) (competitiveness in line with POSB Postsaver of 1% )(If I only dollar cost average one counter, this is way superior to Philips)
2) 0.0325% clearing fee + 0.0075% transfer fee = 0.04% sunk cost fee (not worth considering)
3) DCA is more of a sleep-well-at-night methodology. Choose a stock that has good fundamentals and don't bother about it. Its returns will definitely fare worse than market timing, but you can sleep well at night. If you suck at market timing or don't want to bother with it and just want to be in the market, DCA is much less stress free. If prices go up you are happy. If prices go down you are even happier!
SCB Personal Banking Pre-funded SGD Nominees (Less competitive with emerging competitors)
1) 0.20% of contract value, min SGD10 per counter
i) (If investment is less than SGD5,000, will still be $10)
ii) More expensive than POSB saver, MayBank
2)In Singapore market, If I issue a GTD order (VERY IMPORTANT!)
i) If GTD filled within one dat, $10
ii) If GTD filled within 10 days, $100 per counter
iii) Important to choose a liquid stock and pricing power may be compromised
3) No DCA available, Manuel process.
After attending the investment seminar talk held at suntec city on 06/08/17, my general impression is that there has been an active interest between the brokers in offering competitive rates for their brokerage services. There are a lot of proficient speakers there, ranging from the bond experts at fundsupermart, general brokerage providers, investing-note (Facebook for investors) as well the dubious schemes promoting quick to rich schemes with 99% of beating the market. I really enjoy those talks but that will be a post for another day.
The general trend of brokerages now (borrowing ideas of SCB low cost model) is to create a savings account at their brokerage so that they will have a much lower credit risk if client have insufficient funds to make the trade. That way, they can reduce default risk, trade timing issues, turnabout trades, buy in issues and also bolster the amount of funds accessible to them. SCB took one step further by not even setting up booth at that investment event to cut costs! I have to take an extra mile to go down to their branches and on the internet. on a separate day to pull out their custodian account details. DO take note that all materials in comparison is with respect to SG market, I cannot vouch the same for foreign markets.
Philips Capital (CDP)
1) SGD25 per transaction to CDP (Need to make a trade of more then SGD 2,500 to keep the trading cost to 1%)
2) 0.0325% clearing fee + 0.0075% transfer fee = 0.04% sunk cost fee (not worth considering)
3) In the long run, since CDP is backed by the government, technically speaking it is more 'safe' then nominees accounts held at respective custodians. There will also be 0 custody fees so in the event that there is market collusion to increase custody fees, I may have to reassign my holdings from custodian accounts to CDP.
4) If the broker is facing serious issues that may threaten to pierce the corporate veil via the nominee accounts system, I may have to reassign my holdings from custodian accounts to CDP.
Philips Capital (prepaid custodian account, Very uncompetitive)
1) Prerequisite to conduct one trade every quarter to waive off other charges
2) 0.12% of contract value, min SGD10 per counter (If investment is less than SGD8,333.33, will just charge SGD10)(Just need to invest SGD1,000 to keep the transaction cost to 1%)
3) 0.0325% clearing fee + 0.0075% transfer fee = 0.04% sunk cost fee (not worth considering)
Philips Capital (Share builder Plan, Very uncompetitive)
https://www.phillip.com.sg/stocks-a-shares/share-builders-plan.htmlFixed cost of SGD6 (+ 0.04%) per month, which translates to a prerequisite to invest 2 stocks and up to SGD600-999 to keep the transaction fee to 1%. If you cannot meet this criteria there are simply better options elsewhere
| Dividend Charges | 1% on net dividend subject to min S$1 capped at S$50 |
| Scrip Dividend | $10 |
| Other Corporate action | $10 |
Going forward, I will most likely be conducting trades vis custodian services.
MayBank Kim Eng Pre-funded SGD Nominees (Most competitive even than SCB!)
1) 0.12% of contract value, min SGD10 per counter (If investment is less than SGD8,333.33, will just charge SGD10)(Just need to invest SGD1,000 to keep the transaction cost to 1%)
2) 0.0325% clearing fee + 0.0075% transfer fee = 0.04% sunk cost fee (not worth considering)
3) Savings of SGD50 (waive off transaction fees of 5 trades)
4) SGD Custody Fee waived
5)Corporate Actions fees waived
Dividend fee
Cash issues
Rights
6) Applicable transfer out fee (NCBO) SGD50 per counter
MayBank Monthly Investment Plan (Preferred choice going forward if DCA)
1) For DCA less than SGD1,000, 1% of contract value, min SGD10 per counter
i) If investment is less than SGD100, will still be $1)
ii) (competitiveness in line with POSB Postsaver of 1% )(If I only dollar cost average one counter, this is way superior to Philips)
2) 0.0325% clearing fee + 0.0075% transfer fee = 0.04% sunk cost fee (not worth considering)
3) DCA is more of a sleep-well-at-night methodology. Choose a stock that has good fundamentals and don't bother about it. Its returns will definitely fare worse than market timing, but you can sleep well at night. If you suck at market timing or don't want to bother with it and just want to be in the market, DCA is much less stress free. If prices go up you are happy. If prices go down you are even happier!
SCB Personal Banking Pre-funded SGD Nominees (Less competitive with emerging competitors)
1) 0.20% of contract value, min SGD10 per counter
i) (If investment is less than SGD5,000, will still be $10)
ii) More expensive than POSB saver, MayBank
2)In Singapore market, If I issue a GTD order (VERY IMPORTANT!)
i) If GTD filled within one dat, $10
ii) If GTD filled within 10 days, $100 per counter
iii) Important to choose a liquid stock and pricing power may be compromised
3) No DCA available, Manuel process.
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