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Stock Brokers I use to replace Standard Chartered Online Trading (FH referral bonus)

By
Financial Horse
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64
Source: Forexbrokers

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Like many of you investors out there, I was a huge fan of Standard Chartered Online Trading when it first opened. No minimum commission on stock trades, on any stock exchange in the world? Sign me up please!

In my early days as an investor, I placed almost all my US and Singapore stock trades on Standard Chartered. The no minimum commission allowed me to purchase S$1000 to S$500 worth of stock each time, and pay S$1 or S$2 in fees. Those were the golden days of stock trading.

Eventually Standard Chartered probably figured out that this wasn’t making them enough money, or perhaps this was their plan all along once they had a large enough user base, and they imposed a minimum commission of US$10 (or $10 of the local currency).

This really destroyed the entire purpose of having a Standard Chartered Account for me. They had horrible forex spreads (almost 100 bps), and a horrible trading interface that we all put up with because hey, no minimum commission right? I’ve been on the hunt for a replacement broker ever since.

Updated stockbrokers for 2020 here.

Singapore Shares

For Singapore shares, I have replaced them with DBS Vickers Cash Upfront. The minimum commission is far superior: minimum S$10 per trade, with a S$5 dollar rebate.

Not only that, but DBS Vickers doesn’t use a nominee account structure like Standard Chartered. The Singapore shares that you buy go directly into your CDP account. This means you are the legal owner of the shares, and can receive documentation from the company (rights issue/preferential offering circulars etc), as well as attend the AGM without having to be appointed as a proxy. I personally have seen many fellow Standard Chartered users encounter problems when trying to get into an AGM, simply because the shares are legally held in the bank’s name.

To be able to get shares in your CDP account for S$5 minimum commission is an absolute steal, and there’s really no reason why you should not be making use of this feature. The trading platform is pretty decent as well.

Note: Seedly has a nice article on the pros and cons of a CDP vs nominee account, do check it out if you need more info 

US Shares

For US Shares, I’ve still been tolerating Standard Chartered until now. But no more. One of my friends recently referred me to Saxo online trading, which offers a minimum USD 4 commission. You can take a look at the full rates here, it’s significantly better than what is offered by any other broker out there.

Comparison against other brokers

SAXO CAPITAL
MARKETS		 PHILLIP
CAPITAL		 DBS
VICKERS		 TD
AMERITRADE		 CHARLES
SCHWAB
US shares
(USD)		 4 20 25 10.65 4.95
SG shares
(SGD)		 10 25 25 – –
AU shares
(AUD)		 8 40 30 – –
JP shares
(JPY)		 1,500 3,000 3,000 – –

Table shows minimum commissions. Comparable pricing available on websites of respective brokers (as of 11 Jan 2018)

Benefits of Saxo

USD 4 minimum commission – Actually by far the largest advantage is the lower fees. The rest are icing on the cake.

Trading platform that does not suck – Fellow users of Standard Chartered who have been with them from the start will get this. Standard Chartered’s online platform and app really sucks, and the only reason why we put up with them is for no minimum commission trading. On the bright side, Saxo has a very decent online trading platform, and an app that actually works.

Much better forex spreads – The last I checked, Standard Chartered imposes about a 100bp spread on the forex, which is frankly ridiculous. Whatever you saved on the commission might actually go into the forex spread, depending on how frequently you trade. Saxo has a better 50bp spread. This is still high when compared to DBS Vickers, but you do save quite significantly on the minimum commission and custodian fee when compared to DBS Vickers.

Decent stock information – I’m not a technical trader, I buy and hold for extended periods. When I evaluate a broker, all I want is to be able to buy and sell a share, on the cheap. That being said, Saxo does have a wealth of technical information and analyst reports, if you are into that sort of stuff. There’s a very comprehensive review here on all the technical features of Saxo.

Problems with Saxo

Nominee account – Don’t forget that Saxo is a nominee account, and the shares are held in Saxo’s name. Saxo is a large bank and I don’t see them ever collapsing, but in the unlikely event they do, it may take some time and hassle before you get your shares back.

Closing Thoughts

The way I see it, a brokerage is just a tool, much like how I would use Gmail. Sure, Yahoo Mail may have more features and a fancy user interface, but at the end of the day, I am here to get a job done, wheether that is to send email or buy a stock. I don’t really care much for the other features. As Singaporeans, hunting for bargains is in our DNA, and I really don’t see any reason to pay higher commissions over at DBS Vickers or UOB Kay Hian just to buy a US stock.

Note: A couple of readers reached out to me with great questions, and I thought I would add some clarifications here:

1. DBS Vickers Cash Upfront does not apply to the sale of shares, on which minimum commission is still S$25. A reader suggested the use of FSMOne for sale of shares, which has S$10 minimum commission. I haven’t explored this option fully yet, so I shall reserve my comment until I have more time to look at the documentation. 

2. Interactive Brokers offers a great commission at USD1 per 100 shares. However, the minimum monthly trading requirements are very high (more than 100,000 USD in equity or more than 10 USD in commissions and fees, on a monthly basis), that we as retail investors are unlikely to hit regularly, which is why I felt it was less appropriate.

3. Just to update after confirming with Saxo again. Saxo does impose a 0.12% AUM fee. On a 50,000 USD portfolio, it adds up to about 60 USD yearly. To contrast with the other brokers: Interactive Brokers has a minimum requirement of 10 USD commission a month, totalling 120 USD a year, while DBS Vickers imposes a S$2 fee per month per counter, so thats S$24 per counter per year. Standard Chartered has no custodian fee, but 10 USD minimum commission per trade, and quite poor forex spreads. I guess the way to see it is this, if you only intend to buy 2 or 3 counters at one go and hold long term without trading, DBS Vickers might be helpful. If you have quite a large AUM or trade very frequently, Interactive Brokers is worth checking out.

Personally for me I will leave all my existing US and Singapore shares with Standard Chartered, because the transaction costs associated with moving them all to another broker is not worth the upside. For new investments, I will continue to go with Saxo because the referral bonus is already sufficient to cover the AUM fee. I also don’t trade on a frequent basis and I don’t see myself hitting 10 USD commission a month to really make use of Interactive Brokers. Because most of my shares are already with Standard Chartered, my AUM with Saxo (US shares only, all new money into Singapore shares I invest via DBS Vickers) should not cross the S$100,000 threshold in the near future, so the AUM fee will not get out of hand. I don’t like DBS Vickers because the USD25 minimum commission is very high, and makes it hard to dollar cost average in with smaller sums.

Of course, ultimately which broker is appropriate for you will depend on your personal situation, and what works for me may not work as well for you. Thanks very much for the input from everyone, and apologies for not catching this point earlier. 

 

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64 COMMENTS

    • Yes, this got me confused as well. But I spoke to the customer service officer, and I also dropped them an email to confirm that no custodian fee is payable if I don’t have access to Singapore shares. They replied in very clear language that:

      Hi XXX,
      Nope you will not need to pay.
      Thanks,
      XXX

      If they still bill me for custodian fees, I am going to be very pissed. But if you are worried, you can wait until the end of the month and I will update you on whether I have to pay any fees.

      • Hmmm yeah there’s a lot of technicalities that they could skirt around with the right language. Wld be good to hear from you again on this 🙂

          • Hi Teletubby, I spoke to Saxo again and unfortunately there is an AUM fee of 0.12% p.a. I have added a comment below to reflect this as well as my personal thinking. Apologies for not catching this sooner.

    • “* Effective 1st April 2017, all Singapore Citizens, PRs, and Singapore Incorporated Entities trading SGX stocks who opt to have access to SGX stocks will be subject to a USD 5.00 monthly custody fee, regardless if SGX stocks are held or traded”

      This is what it says from the link you posted, seems like the custodian fee is only there if you opt for the option to trade sgx listed stocks?

  3. Hi, i am curious on the $3000 needed to open the saxo account. Can the amount be used to buy stocks once the account is opened? Or is it the case where it can’t be touched

    • Yes, the S$3000 can be used to buy stocks, forex, CFD etc. It’s basically your initial funding amount to play around with.

      • Hmm thats nice. Have you checked with them (or got an official reply from them) whether investors are able to claim the shares they hold with saxo in the unlikely case that it closes down?

        • Saxo uses a custodian account, similar to Standard Chartered. It’s never 100% clear cut in such a situation, but since Saxo has a retail CMS license, I would be highly surprised if the MAS didn’t ensure that retail investors are not taking on insolvency risk. Most likely you will be able to get back the shares eventually, but it will take some time for the liquidator to work through it.

          Don’t forget that if Saxo closes down, you’re likely deep in a financial crisis, and your shares have probably already halved in value, so not being able to sell may not be a bad thing ;).

  4. Just move towards priority banking for standard Chartered and it will be no min. Shares are considered as AUM.

    It will take a while but possible.

    • Haha interesting alternative. Well, Saxo can still serve as an option for those (like myself) who are not keen on keeping so much AUM with SCB (S$200,000 minimum if I am not wrong).

    • Agreed – for those who are able to consolidate their assets to hit the minimum S$200k AUM for priority status, fees are very palatable. Also helps that there are no custodian fees for those buy and hold forever investors like myself.

    • Yes, you can take a look at their FAQs, extracted below:

      Yes. DBS Vickers will charge SGD 2 per stock per month and capped at SGD 150 per quarter. We will waive the custodian fee if there are at least 2 transactions per month or 6 transactions per quarter.

      Please note that custodian fees will be chargeable every quarter on the 11th of January, April, July and October, or the next working day if falls on a non-working day. Customers under the GIRO payment arrangement will have the charges debited from their bank accounts if there are insufficient funds in their trading accounts.

      https://www.dbs.com.sg/vickers/en/resources/faq/charges-commission

      • Hello!

        Just to clarify, The SGD 2 per stock per month custody fee only applies to foreign stocks and not SGX stocks?

        Thank you!

        • Hello!

          Yes, supposedly. But I have been using Saxo for my US shares but they have not billed me any custody fee. I’m not complaining though ;).

          • Hello FH,
            i opened an account with IB based on a friend’s recommendation as its my day 12 in understanding stock investing so a novice !
            Obviously the IBKR platform has showed me how hard it is for normal IQ guys like me to trade on it. My question is for IBKR if we play the buy and hold game for say 6 – 8 stocks in a year, as the trading fees are so low, is the 120 $ per year justified? as they dont charge different for different non US exchanges.

            The other option is SAXO – if i do 6-10 trades a year all non Singapore & mostly IRISH domiciled index funds buy & hold , what is the net fees i pay annually – i am confused as i read somewhere that SAXO charge GBP 20 for each Irish domiciled trade – this if true means they are more expensive than IB even if have only 20 k capital annually.

            Do you suggest that most normal investors should have a portfolio of 4-6 index long time stocks ( 10 + yrs) & then have a play with couple of stocks per month ( like tech stocks or copper or marijuana 🙂

            if we end up doing 2 -3 trades a month then is IB ok ?

            if someone can do a training course to trade on IB portal, am willing to pay for it – i cant believe the praise for IB globally !
            thanks for helping this confused novice.

          • Hello!

            I’ve replied you via email, hope that it helps.

            Saxo is 8GBP minimum per trade, and 0.12% custodian fee. IB will be US120 per year, with a platform that is much harder to use, and no referral bonus.

            So if you’re investing 20k annually, I would think Saxo would beat IB, especially when you factor in the referral bonus.

            But yes, if you trade frequently, or your AUM is large enough such that the USD120 commission a year makes sense, I would say go with IB.

            Hope this helps!

      • Hello!

        The SGD 2 per stock per month custody fee levied by DBS Vickers only applies to foreign stocks and not SGX stocks yes?

        I’ve tried searching on DBS’ website but I couldn’t find a clear answer to this (maybe I’ve been looking in the wrong places!)

        Thank you very much for your help!

  6. Hi..Saw your post just a little too late. Opened a trading account on Friday. And yes, opened a sgd account too. What a bummer. Was advised that they can open a sub account for us under the main trading account. Only thing, first deposit have to be 50k sgd. Commission on this 50k is 0.5%. Likewise, the banks earn on top of the forex.

    Just to share with you, there’s a 0.12% custodian fees for foreign shares holding.

    • Haha Saxo advised me the exact same thing, about opening a sub account for 50k SGD. It looks like the only way out is to wait 6 months and then close this account, and open another USD one with them. It’s quite troublesome really. Hopefully after this post no one makes the same mistake again.

    • Thanks for the heads up. Yes IB does look quite attractive. I’ll probably stick with Saxo for now, but if I need a new broker I might go with IB for the superior forex spreads.

  9. Jut wanted to clarify your comments with interactive Brokers.

    The USD 10k minimum is only for opening the account. After that you only need to maintain USD 2k in equity (cash or shares or whatever) moving forward.

    IB does charge a minimum USD 10 account and data fees which is offset by trades you do (I.e if you make USD 10 of trade commission it counts as account fees.

    That said. IB is the cheapest broker for stocks. I used to pay 0.005 cents a share using their tiered charge scheme (they also have a fixed trade fee which is also cheap).

    Not to mention you can exchange money using the IB platform at only USD 2.5 per transaction. That may seem expensive but IB gives you access to actual global interbank fx rates whereby my USDSGD spread was only 1.5 to 3 pips wide (not 70 to 100 pips based on bank fix rates). Not to mention depositing cash in SGD is free and can be done using local bank FAST transfer and you are entitled to one free withdrawal a month.

    • Thanks very much for sharing. I didn’t realise IB has such good spreads. I guess this would mean that if one can make 10usd commission worth of trades a month IB is a very attractive alternative to saxo. Or even if they don’t,they are already ahead because of the forex spread. Would you happen to know if IB has custodian fees?

  10. Hi Everyone,

    Just to update after confirming with Saxo again. Saxo does impose a 0.12% AUM fee for non-Singapore Shares. This is a bit annoying because on a 50,000 USD portfolio, it adds up to about 60 USD yearly. To contrast with the other brokers: Interactive Brokers has a minimum requirement of 10 USD commission a month, totalling 120 USD a year, while DBS Vickers imposes a S$2 fee per month per counter, so thats S$24 per counter per year. Standard Chartered has no custodian fee, but 10 USD minimum commission per trade, and quite poor forex spreads. I guess one way to see it is this, if you only intend to buy 2 or 3 counters at one go and hold long term without trading, DBS Vickers might be helpful. If you have quite a large AUM or trade very frequently, Interactive Brokers is worth checking out.

    Personally for me I will leave all my existing US and Singapore shares with Standard Chartered, because the transaction costs associated with moving them all to another broker is not worth the upside. For new investments, I will continue to go with Saxo because the S$250 commission (split with my friend) is already sufficient to cover quite a few years of AUM fee. I also don’t trade on a frequent basis and I don’t see myself hitting 10 USD commission a month to really make use of Interactive Brokers. Because most of my shares are already with Standard Chartered, my AUM with Saxo (US shares only, all new money into Singapore shares I invest via DBS Vickers) should not cross the S$100,000 threshold in the near future, so the AUM fee will not get out of hand. I don’t like DBS Vickers because the USD25 minimum commission is very high, and makes it hard to dollar cost average in with smaller sums.

    Of course, ultimately which broker is appropriate for you will depend on your personal situation, and what works for me may not work as well for you. Thanks very much for the input from everyone, and apologies for not catching this point earlier.

    • Hey Financial Horse, a quick question regarding the SCB online trading account since you have an account with them. Is there an option to choose between opening a SGD or USD denominated account like the one with Saxo? Or the choices are given by default?

      • Hi James,

        Standard Chartered allows for multi-currency accounts. So you can have a SGD account, a USD account, and also a HKD/EUR/GBP account etc if you require.

        Saxo allows for sub-accounts only if you fund S$50,000.

        Cheers.

  11. Dear People, 

    After reading your article, it obvious why investing in Robo does not justify the 0.5% p.a. expense whereby we can buy etf ourselves. 

    My questions is 

    i am a 30 years old Singaporean, looking to buy ETFs. I have a aggressive long term view to reach my goal when i reach 60 years old. So i intent to buy a 80% equities, 20% bonds like ETF. 

    I will be using Standard Chartered Bank platform by investing on a quarterly basis ( to reduce the cost). 

    XT MSAsExJp US$ (IH1 – which is listed on SGX),   Vanguard Total Stock Market ETF, S&P 500 (SPY), Nasdaq (QQQ) 

    What do you think is good to construct such portfolio? 

    Thanks for reading. 

    • Hi Isaac,

      I was going to type a long reply to your post, then I realised Investment Moats has a great article that would address a lot of your queries: http://investmentmoats.com/money-management/etf/how-you-can-start-building-a-passive-index-etf-portfolio-in-singapore/

      A lot of it depends on your risk appetite. Since you are young and want to build wealth aggressively, an 80-20 equity bond allocation is good. For the equity component, you can consider splitting among S&P500 (SPY), NASDAQ (QQQ), SGX (STI), and an asian stock ETF such as (VWO). For the bond component, personally I am not a fan of US bonds. The way I would do it is to have half in Singapore Savings Bonds, and the rest split among mid to long term USD bonds (TLT, TLH).

      Investing is a long journey, and with such a large equity component, there will be huge drawdowns during a recession. The key is to stay true to your goals, and stay invested (or better still, add new money) during a market downturn.

      Good luck!

  12. Thank you Financial house for replying on this matter.

    Good idea on this, on the investment to such ETFs!

    Do you think there will be charges in “tax withholding dividend or capital gain tax on Singaporean investor if we were to buy SPY, QQQ or VWO ETFs?

    Because i do remember seeing somewhere in your blog talking on this.

    Lastly, do you think invest primarily in ETFs or stock picking?

    Cheers and have a nice day.

    • Hi Jun Hong,

      Great questions. To answer you simply, no capital gains tax, but yes withholding tax on dividends. If you are concerned about withholding tax, one way is to buy London listed ETFs such as the IWDA (they use an Irish domiciled SPV to get around US withholding tax). Personally I just go with the SPY and QQQ though haha, but IWDA is an alternative worth considering, and there are many who advocate very strongly for it.

      For me, I stock pick for Singapore stocks and REITs, because I am not a huge fan of the STI (a bit too concentrated for me), and there are no REIT ETFs that I like. for the US markets, I am primarily in ETFs via SPY and QQQ, but I do have positions in stocks that I really like (MU is one of them).

      Cheers.

  13. Hi FH

    Say you are opening up a USD-denominated account with Saxo. How are you going to fund this USD account and settle your stock purchases in USD?

    Transfer SGD from your bank account and have the broker convert into USD for you? Or open up a USD-demoninated bank account, and deposit USD that you get from money changer?

    Sorry if this sounds like a stupud question to you but I only have SGD in my bank accounts.

    Thanks!

    -K

    • Hi Koala,

      Not at all, there are no stupid questions in my book.

      You can transfer SGD into the USD-denominated account, and Saxo will automatically convert it into USD for you. They charge a small spread (about 50bps), but its worth the convenience for me.

      Cheers.

  15. Hi Financial Horse,

    Does the S$500 referral fees able to withdraw out and close the account off after the referral process?
    Or the S$500 will be just money to be stored inside the trading account and to be used for trading only?
    It seems like a good deal to earn that S$500 referral fees… haha 🙂

    Thanks .

  16. Hi Financial Horse,

    I intend to buy VWRD/IWDA, sti etf and nikkoamstinvestment grade bond etf.

    I plan to invest around $40k-$50k first, then a few months later followed by another $20k- $30k, after that $10k per year during rebalancing.

    In this scenario, for local stocks and foreign stocks, which brokerage firm should I use to minimise cost?
    Thank you so much for your kind assistance!:)
    Much appreciated!

    Cheers,
    John

  19. Hi FH,

    Sorry to reply to an old comment, but I was wondering what the benefit of opening the USD-denominated account is?

    I see that depositing SGD to USD-denominated account will incur 0.5% conversion fee, but I assume there will also be a conversion fee when the fund is withdrawn from the account as well.

    Why is this any different than depositing SGD to SGD-denominated account and buying/selling US market using SGD? Is the conversion during buying and selling more than 0.5%?

    I haven’t opened Saxo yet so I would like to know beforehand.

    Thanks!

    • It’s helpful if you trade US stocks frequently, so you don’t incur the forex conversion each time you buy and sell. But as you mentioned, for a buy and hold investor, you can just use a SGD account because you don’t flip the counters anyway. Cheers.

  20. Hi Financial Horse,

    I’m actually really confused given the large number of fee variables. If I could ask for your recommendation – I was primarily interested in buying US/Ireland domiciled ETFs and a few individual stocks, less than 10 trades a year, AUM 50k – 100k, would you recommend SC, Interactive Brokers or Saxo, keeping in mind fees, forex spreads and even being referred to a Saxo account by you?

    Thanks!

    • Hi there!

      I would say go with Saxo. The commissions and spreads are better than SC, and with so little trades IB doesn’t make sense. The referral bonus from Saxo would be icing on the cake. 🙂

      Cheers.

    • hello Vighnesh,
      can you advise me on which broker you finally went with for buying IRISH domiciled stocks
      thanks

  21. Stocks bought through UOBKH cash upfront do not go into CDP. It will be under UOBKH’s name and thus the various charges apply.
    Looks like iFast has some lowest fees too?

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