Commission-free stock trading by year-end?

8 Securities chairman Mathias Helleu (left) and chief executive Mikaal Abdulla are aiming to expand into Australia, Indonesia, the Middle East, India and the US as well as Singapore. 8 Securities chairman Mathias Helleu (left) and chief executive Mik
8 Securities chairman Mathias Helleu (left) and chief executive Mikaal Abdulla are aiming to expand into Australia, Indonesia, the Middle East, India and the US as well as Singapore. PHOTO: 8 SECURITIES

HK firm seeking MAS approval to launch phone-based platform now used in HK and Japan to trade shares

Investors here might soon be able to trade stocks using their phones and without needing to pay any commission.

Hong Kong-based firm 8 Securities is seeking regulatory approval and hopes to launch the service by the end of the year, co-founder and chief executive Mikaal Abdulla told The Straits Times.

The company also plans to roll out its "robo-adviser" service - an artificial intelligence system that gives investment advice - here.

The firm's platform is already being used in Japan and Hong Kong, where it allows users to trade over 15,000 United States, Hong Kong and China H-shares and exchange traded funds (ETFs) for free. Users do not need to maintain a minimum balance in accounts they open or pay account fees.

The trading platform was launched in 2012 and 8 Securities now holds over US$600 million (S$828 million) in customer assets.

Its robo-adviser service, launched in Hong Kong and Japan over a year ago, is named Chloe and helps investors set goals based on their age, annual income and risk profile.

Once the customer chooses his goal, he is shown a projection of when he can realistically achieve it based on low-, medium- and higher-risk investments in exchange- traded funds.

"Until now, 90 per cent of the population is not able to access wealth management services because the entry price has traditionally been so high and the fees are significant," said Mr Abdulla.

"Robo-advisers solve this problem. They give everyone an opportunity to own a globally diversified portfolio that is rebalanced. Customers can enter and exit with no penalty."

Investors can monitor the performance of their portfolio at any time. "Financial advisers sleep while Chloe is always available," he added.

The company plans to set up an office in Singapore, said Mr Abdulla, who added that it has had several discussions with the Monetary Authority of Singapore (MAS) and is preparing its licensing application.

"Relative to other geographies, Singapore and the MAS are taking a very forward-looking view of fintech," he said.

Besides Singapore, 8 Securities is also exploring potential markets in Australia, Indonesia, the Middle East, India and the United States.

The firm has raked in US$25 million in funding since its founding in 2010, and is in the process of raising another US$20 million to power its regional expansion.

Mr Abdulla declined to reveal the company's sales figures but said turnover is expected to rise 300 or 400 per cent over the next year.

The firm is generating revenue not just from its trading and robo-adviser services but also from interest income on customer's cash deposits and currency exchange.

The company expects to launch margin trading next year, he added.

Before starting 8 Securities, Mr Abdulla and co-founder Mathias Helleu managed online discount stock brokerage firm E*Trade across Asia, Europe, the Middle East, India and Canada.

Brokerages here said clients still see value in their strengths.

Ms Kwang Sook Fong, the head of marketing communications at Phillip Securities, said: "Throughout the years, there have been many new competitors and we welcome them to the industry. We do offer our clients free commission on a promotional basis but, ultimately, we believe in looking beyond just the rates."

The firm tailors its approach to clients based on their investment preferences - some are more self-directed while others require more personalised services, she said.

OCBC Securities managing director Raymond Chee said emerging financial technologies such as robo-advisers might "appeal to certain segments of investors, including those who are new to investing".

"We are open to exploring and adopting such new technologies where appropriate, to complement and broaden the range of services we offer to our customers," he said.

Correction note: This story has been updated to reflect the correct currency conversion. We are sorry for the error.

A version of this article appeared in the print edition of The Straits Times on May 24, 2016, with the headline 'Commission-free stock trading by year-end?'. Print Edition | Subscribe