Opening A Brokerage Account: What to Consider

By Paul on February 19th, 2009

: Image by ? Cishore ??• via Flickr

Selecting a brokerage for your trading or investing purposes can be a simple thing. Besides, most Singaporean brokerages provide nearly equal level of service. There are some factors that do differentiate them and that different groups of people are drawn to different brokerages due to some unique features about them. Here are some considerations you might want to take when selecting brokerages:

Cost of Trading
Some brokerages have different cost structures. Usually trades are costed on a percentage basis depending on the dollar value of the trade – the larger amount, the lower the percentage. For very small trades, a fixed dollar value is usually charged. Different brokerages might offer lower percentage fees or free trades within a period of time to encourage trading.
Investment Products Offered
Besides the usual buying and selling of shares, more sophisticated investors might want to consider brokerages that offer more products like contracts for difference (CFDs), share margin financing etc.
Coverage of Markets
Besides the local markets, you might want to check whether the brokerage allow trading of shares in other markets like US, HongKong and nearby KL.
Rewards System
Some brokerages allow traders to earn points to redeem gifts, prizes or vouchers to offset their trades. Others allow free trades etc.
Time to Settlement
This is more relevant to traders rather than investors. Usually, you are allowed 3 working days to settle your payment for shares. This period is called contra period. Short term traders usually use this period to generate quick money with little or no money down. The longer the contra period, the better for traders as they can hold their positions longer to “ride the trend” or “wait for rebound”.
Platform and Usability
Some platforms are more user friendly than the others in terms of navigation. Others provide value added services like charting tools. And there are increasingly more platforms that allow mobile trading on your handphones as well. This factor is usually the greatest differentiating factor after “cost”.
Service Level
There are some brokerages that have excellent service though it really depends on the broker that was assigned to you. Some brokers go out of their way to satisfy customers by giving free reports, following up etc. Other brokers are excellent at what they do in price predictions and stock calls. It is important to establish a great relationship with your broker

Singapore Brokerages

Just a small list for your references.

DBSVickers
Lim&Tan
UOBKayHian
KimEng
Philips POEMS

I’ll write my opinions on some of the Singaporean Brokerages in my next post and have direct links to them so you can bookmark them as well.

One Response to “Opening A Brokerage Account: What to Consider”

Singaporean Brokerages - A Comparison
22 February 2009 at 9:05 pm | Permalink

[...] my last post, 7 points of consideration was given to pick the best brokerage for your own [...]

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