Web platform offers cheaper commissions on stocks, ETFs

An online platform out today lets investors trade Singapore and Hong Kong stocks and exchange- traded funds (ETFs) at cheaper commission rates as well as access insurance products and other services.

FSMOne (www.fsmone.com), which was devised by online unit-trust distributor Fundsupermart.com, charges 0.12 per cent of a stock trade and 0.08 per cent of an ETF trade.

It has a minimum charge of $10 for Singapore stocks and ETFs and HK$50 (S$9) for Hong Kong's.

Most brokerages here charge retail investors about $25 in brokerage fee per transaction to buy and sell Singapore shares online, regardless of the trade's value.

"Most stockbrokers in Singapore are still counting on revenue from stockbroking transactions, whereas we started from offering unit trusts as our own business," said Mr Lim Chung Chun, chairman and chief executive of iFast, which has Fundsupermart.com and FSMOne under its stable.

"The stockbroking business is an add-on product for us and the incremental cost to do that isn't high."

BEGINNINGS IN UNIT TRUSTS

The stockbroking business is an add-on product for us and the incremental cost to do that isn't high.

MR LIM CHUNG CHUN, chairman and chief executive of iFast, on how the online financial services firm started differently.

Mainboard-listed iFast is an Internet-based investment products distribution platform, with assets under administration of about $6 billion as at Sept 30.

There are no sales charges for all funds and unit trusts, and five investment portfolios created by robo-advisers are available with no sales charge.

The robo-advisers have created investment solutions that automate functions such as constant tweaking of asset allocation strategies in the portfolio of financial products an investor chooses to invest in.

FSMOne account holders who are accredited investors can also immediately buy selected bonds from just $5,000, as opposed to the market practice of starting from $250,000 for a wholesale bond.

The platform is also offering insurance products, "with a transparent fee and commission rebate structure of 30 to 40 per cent for clients", said Mr Lim.

"Our fee and commission rebate structure is clearly spelt out to investors for the purchase of insurance products, which have historically been plagued by an opaque commission structure," he added.

"This often works in favour of the bankers and agents selling the products, but at the expense of clients."

Rachael Boon

A version of this article appeared in the print edition of The Straits Times on December 08, 2016, with the headline 'Web platform offers cheaper commissions on stocks, ETFs'. Print Edition | Subscribe