DISCLAIMER: This is neither a recommendation nor solicited financial advice by WealthMastery.sg
Please invest prudently and perform due diligence before placing capital in the Stock Market.
If you’re new to stocks investing and you’re struggling to decide on which broker to use – read on.
Founded in 2014 and based out of Beijing, Tiger Brokers is on a mission to “make investing more efficient for all”,
So in this article we’re going to take a closer look at the latest player in Singapore’s brokerage scene and see how it stacks up against seasoned competitors such as, Interactive Brokers, TDAmeritrade, and FSMOne!
This article will focus mainly on how Tiger treats Stock Investors so we won’t be discussing Options, Futures, or Forex here!
Because JUST this month, a new broker has hit the shores of Singapore – Tiger Brokers.
When you’re looking for a brokerage, there are a few things you should be considering:
- What kind of fees the brokers charge (Obviously)
- Which markets you’re looking to invest in
- Ease of setup, level of customer support, and brokerage history
Before we touch on brokerages we probably should tackle this first – “What’s the difference between investing with a bank and with a broker?”
Typically, banks will get you to open up a Central Depository Account (CDP).
Operated by the Singapore Exchange (SGX), a CDP account acts as a safe for you to store Singaporean shares and bonds are held in your name.
When you trade through a bank, you may be facing higher commission fees, service fees, etc however, the locally owned stocks are owned in your name.
This is contrary to a custodian account where the broker holds the stocks for you and charges you a custodian fee for doing so along with lower service & commission fees than banks.
Some brokerages allow you to link your CDP account to their platform however you may still be facing the same (possibly lower) charges as you would trading through a bank.
“What happens if the broker closes down? What happens to my stocks?”
This is a fair concern however is also an extremely unlikely event – most brokers rely on 3rd party custodians (ironically, like banks) to hold the stocks while they broker the sale for you.
So the likelihood of you losing your stocks due to a closing broker is very low.
Now that we’ve gotten that out of the way, we can look at the available brokerages!
1. First off, we need to know what fees we’re looking at.
While most trading fees typically lie around $10 per trade, Tiger Broker offers pretty competitive commission costs in the most frequently traded markets:
| Singapore | USA | Hong Kong |
| 0.08% of Trade Value. | 0.01USD per share. Minimum of USD $2 per trade. | 0.06 HKD of Trade Value. M in 15 HKD per trade |
We then compare them to Interactive Brokers, FSMOne, and TDAmeritrade
| Interactive Brokers | FSMOne | TDAmeritrade | |
| USA | USD 0.0035 per share | 0.08% (Min. US$8.80) | Free – US & Canada |
| SG | 0.08% (Min HKD $12) | 0.08% (Min. HK$50) | N/A |
| HK | 0.08% of Trade Value | 0.08% (Min S$10) | N/A |
Using any of the brokerages will also incur separate fees by the respective country’s exchanges, and authorities (e.g SGX in Singapore and SEC in the USA)
And of course because we are in Singapore, the government will levy a GST (Goods and Services Tax) at a rate of 7% on the above fees by the brokers and external parties.
While Tiger does lose out in this area to Interactive Brokers which prices its commissions significantly lower for USA stocks,
Other brokerages also tack on various other fees such as: dividend handling, currency conversion fee, custodian fees to your trades, even inactivity fees when you’re not actively trading.
Presently, Tiger Brokers internally only charges commission fees, making it the best choice in terms of cost for a beginner!
2. Now, let’s consider what markets you’re looking to trade in.
Tiger Brokers allows you to trade across Singapore, HK, USA, China & Australian markets.
Interactive Brokers presently offers the widest range of choices – allowing you to trade across Europe, Asia and the Americas within each country’s own exchange.
FSMONE trades across major markets such as USA, HK and Singapore while T.D Ameritrade only allows you to trade US and Canada based securities.
Clearly the winner here is Interactive Brokers given the number available opportunities.
However if you’re only looking to trade in major worldwide markets such as the USA and Hong Kong/China, FSMONE or Tiger Brokers are a great fit for you.
And of course if you’re looking to ONLY trade in the USA, or want a broker to manage your USA portfolio, TD Ameritrade is the way to go!
When it comes to picking a case, the thought process is simple, the more powerful you want your computer you want to be, the bigger kind of case you’ll be getting due to the kind of parts you’ll need in future.
3. Finally we look at the history and ease of use of the brokers
All brokers want you to get quickly setup and trading on their platform so the setup process facilitated through Singpass is pretty straightforward and easy.
All the brokers offer mobile platforms and desktop platforms where it’s relatively easy to place a trade, fund your account in multiple currencies and receive investment news.
Where Tiger Broker stands out here however is that all deposits and withdrawals are executed within a few hours rather than 1-2 business days as most brokers will usually take,
This makes trading a lot more versatile on their platform and may give you better lead time in deciding or executing on trades.
However, if we take a look at track records, Tiger IS a relatively newer broker compared to TD Ameritrade or FSMOne.
And while Tiger is backed by Interactive Brokers, it has yet to prove itself as a reliable, consistent broker.
Conclusion?
While we can’t objectively say Tiger Broker is the best broker – it does seem to beat out its competitors in terms of overall cost.
So before you decide on which broker to use, consider things like:
- How much available capital you have
- How frequently you will be trading
- What markets you want access to
Interactive Brokers rewards traders for actively trading in larger amounts reducing commissions with larger trade sizes and frequencies but comes along with fees for inactivity and investing in other financial instruments.
And since Tiger is backed by Interactive Brokers, it very well may be their effort to attract more investors within the Asia region.
TD Ameritrade stands out alone simply because of it’s free commissions but also allows you access to the North America markets and lacks access to the Hong Kong Market & Shenzhen Exchange.
Ultimately the best broker for you depends on your personal financial situation and investing strategy, so do your research before hopping onto a broker and funding an account.
Happy investing!
