Thursday, July 17, 2014

Different Brokers, Different Uses

As a Singaporean living in Singapore, I must admit that there are a really wide range of financial institutions, which in turn provide many financial products and services.

This can be a good thing, but it can also be a bad thing. With the range of options to choose from, it is easier to find things that more specifically meet your requirements. However, I realized that for most people, a variety of options instead induces fear and paralysis of choice.

That aside, I am quite proud of myself for being gung-ho and heading straight into the barrage of offers, promotions and products throw at me by the general media and advertising. Rather than just sit down and wait for something to happen (something WON'T happen), I decided to systematically sort through all the noise and fish out exactly what I need.

So, I'll be sharing what I personally use for each of my financial goals. It is a good exercise also for me to re-evaluate pledging my loyalty and business to them.

Traditional Bank Services: Currently I use OCBC for all my general daily banking needs. Their interface is nice and sleek, though I have to admit it is sluggish at times. They offer everything that I need from a basic bank, which is just a custodian of my money and providing me with easy access to move my money around. This is my command centre where all my inflows enter into, before I decide to shuffle them around for different purposes. I do have DBS account, but I am neglecting it, just leaving a nominal token sum since they do have the best ATM network.

Buying Unit Trust: Hands down, Phillip has got to be the best. On top of having a huge variety of funds, their sales charge is only 0.75%. It gets even better! Many times there are promotions which offer 0% sales charge, which is just crazy! If you don't want to pick individual securities and instead have a more hands-off, long-term view to investing, I would strongly recommending look at the different funds of asset classes that Phillip offers to help you to do that.

Buying Local Stocks: Standard Chartered Bank wins in this department hands down. With their ridiculously low brokerage charges (0.25%) and no minimum commission, it is nigh impossible for any other broker to even compete with them in the local scene. The fact that they don't have a minimum commission allows me to buy small lots of small-cap and mid-cap stocks without worrying about an overweight allocation or expensive brokerage charges. Many of these names are also thinly traded and illiquid, so the ability to trade in small lots without worry is just fantastic.

Buying Overseas Stocks: I have to disclaim that I have not bought any overseas stocks yet. I am a real hater of the having unmanaged currency risks introduced to my portfolio. However, I already concluded that DBS would be my choice if I was going to purchase stocks or ETFs overseas. I did a small review here. The main reason for this is the transparency and low FX conversion costs offered by DBS.

Buying Preferences Shares and Bonds: Again, I have to disclaim that I have not bought any of these instruments yet. Unfortunately for Standard Chartered, they online equity trading platform really is only restricted to equities. Therefore, I think that the next best option is still DBS.

Speculative CFD: I personally use CMC Markets. Other people use Oanda or IG, which I can't personally speak for, but I have heard good things about them. For CMC, think that their platform is very nice and sleek, with quite a lot of options to make personal customization. It is nice that they also have a mobile app. I think the best thing about them is that their customer service is speedy and fast, as well as crediting in money. It usually takes within a few hours from transfer to credit money to your account, which makes sure that you don't miss out on too many opportunities.

Precious Metals: I find that BullionStar is great and I really enjoy their service. I wrote a full review about them in a post here.

So far, I am very pleased with how I am managing my finances with all the different financial institutions providing me with different services based on their advantages. Any suggestions or improvements for me to make?

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