Brokerage wars: Incumbents push back as investors flock to Moomoo, Tiger Brokers, FSMOne
[SINGAPORE] A digital brokerage boom erupted amid the pandemic. But, unlike other trends that emerged during Covid-19 and eased over time, the online trading frenzy seems here to stay.
A few years after the retail trading surge, which introduced a flood of new broker platforms into Singapore, the new kids on the brokerage block have since gained ground and captured more market share.
A report by research firm Investment Trends showed that the share of investors in Singapore who use digital brokerages as their primary online broker soared from 7 per cent to 36 per cent between 2020 and 2024.
Conversely, the market share for traditional brokerages over the same period fell to 49 per cent from 75 cent, data from the 2024 Singapore Online Investing Report showed.
It considers platforms such as Moomoo, Tiger Brokers and FSMOne as digital brokerages, and banks and traditional brokers such as Phillip Securities, OCBC Securities and CGS International as established ones.
Beyond their rapidly rising market share, these new players differ from the incumbents in terms of their users' age profile.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
The report found that users aged 18 to 44 – largely Gen Zs and millennials – make up nearly two-thirds of digital broker users, but less than one-third of traditional broker users.
When narrowed down to those aged under 30, some 19 per cent used digital brokers and a paltry 3 per cent used traditional ones.
Digital brokerages have reported rising numbers of younger users. In 2022, Moomoo said that a majority of its Singapore users were millennials and Gen Z. FSMOne observed more young investors opening accounts after the pandemic as compared with before.
But even as digital platforms go out guns blazing, traditional brokers are also fighting back to ensure that they are still in the game.
Pandemic-driven digital brokerage boom
In 2017 – even before the pandemic – fears of new platforms tussling market share from incumbents surfaced when iFast launched its discount broker service.
With the advent of Covid-19 and the lockdown restrictions, retail trading surged and sped up the rise of new digital brokers. New account sign-ups skyrocketed against a backdrop of the GameStop short squeeze, and what came to be known as the 'meme stock' phenomenon.
The phrase describes online grassroots efforts or Internet trends that drove hype around stocks, spurring heavy trading on the grounds of virality, rather than financial fundamentals to elevate the stock's price.
A key example is the high-profile GameStop saga, where the US video game retailer went down in history as the meme stock that pushed many young individuals to foray into investing and open trading accounts.
Much of the activity around meme stocks and 'pump-and-dump' schemes took place on social media, triggering a flurry of new digital brokers entering Singapore.
These brokers were quick to tap the fresh, fast-growing segment of young investors. They deployed a slew of sign-up strategies, offering free shares, fractional trading and commission-free trades, among others.
By end-2021, the trend caught on. Singapore investors found themselves spoilt for choice, with more than 15 digital trading platforms crowding a saturated brokerage scene.
Digital brokers The Business Times spoke to shed light on how business has boomed:
Tiger Brokers: New account openings in Singapore swelled 29.5 per cent over 2024
Moomoo: Its Singapore user base surpassed 220,000 as at June 2021, 800,000 as at July 2023, and one million by April 2024
Interactive Brokers: Its global client accounts surged more than 380 per cent in the last five years and reached 3.3 million in 2024
The lure of cheaper, faster, easier
Digital brokerages have an edge in convenience, cost and speed, says Wong Wanyi, PwC Singapore fintech leader, said.
Professor Lawrence Loh from NUS Business School notes: 'Digital brokerages excel on the cost front (as) they normally command less commission fees and trading charges.'
Leveraging technology to cut costs allows online-only brokers to pass down relatively lower fees to users.
Investment Trends found that low fees were a top reason that traders cited for using digital brokers.
Across the board, traditional brokers tend to fetch higher fees.
Take, for example, a trade conducted for a Singapore-listed stock. Tiger Brokers charges platform fees at 0.03 per cent of the trade value or a minimum of S$1 per order, alongside commission fees at 0.03 per cent of the trade value or a minimum of S$0.99 per order.
Meanwhile, Maybank Securities' online and mobile trading fees for Singapore stocks range from 0.12 to 0.275 per cent of the trade value, or minimum fees ranging from S$10 to S$25. Exact fees depend on the contract value and trade type.
Its fees for offline trades are steeper, ranging from 0.25 to 0.5 per cent of the trade value, or a minimum of S$40.
While digital brokers generally charge more affordable fees, these lower-cost players can vary considerably in pricing. Each broker has a unique pricing structure, with fees varying based on multiple factors such as asset class, market and currency.
For instance, Interactive Brokers does not charge platform fees, but Moomoo has platform fees at 0.03 per cent of the trade value or a minimum of S$0.99 per order.
Interactive Brokers beats Moomoo where platform fees are concerned.
The question of which platform offers a cheaper deal boils down to the user's trade value. Interactive Brokers' commission fees range from 0.02 to 0.08 per cent of the trade value, while that of Moomoo's comes in at a fixed rate of 0.03 per cent of the trade value.
Other brokerages charge commissions in terms of flat fees rather than as a percentage of trading value. FSMOne charges a flat commission fee of S$8.80 for Singapore stocks, regardless of the investment amount.
Active traders who deal with sizeable trade volumes could save costs on flat rates such as these.
However, more passive traders who do not invest as much or as often may not be able to take advantage of flat rates and could incur more fees under this pricing system.
Instead, such traders may save more with brokers with commission fees that charge a percentage of the transacted amount, such as Tiger Brokers or Moomoo.
Investors who hardly trade at all could be better off still using brokers who offer a certain number of free trades per month.
For example, CMC Invest offers five free trades in Singapore stocks a month for users holding a basic trading account, after which they are subject to a commission fee of 0.04 per cent or a minimum of S$2, its website showed.
The types of fees that platforms levy are another point to consider, as different platforms charge different types of fees. For example, most traditional brokers impose nominal custody fees for holding customers' assets.
While digital brokers tend not to charge such fees, there are exceptions such as Tiger Brokers, which charges a S$2 quarterly custody fee for accounts with no transactions through the quarter.
Hence, the question of which broker offers optimal fees depends on the user's unique circumstances and other factors, as each platform has a different value proposition.
Beyond cost and price
The battle does not come down only to price. Digital brokers have greater accessibility and speed, Prof Loh says.
PwC's Wong notes that such platforms provide faster access to asset classes by 'leveraging technology to streamline onboarding and transaction processes', making them more efficient.
They are also favoured for their mobile trading apps and the access they grant to international markets and shares, according to Investment Trends.
Wong notes that their value-added services, such as generative artificial intelligence (AI)-driven market analysis and expert research or insights, are another draw.
Prof Loh says these platforms may offer 'better features' such as market updates, investment information and trading tools.
An example could be financial content, which Moomoo offers on social media and iFast via its ifastTV platform.
These features appeal to digitally native young investors 'who tend to be more tech-savvy and desire cool and chic ways of investing', the professor notes.
These aspects of digital broker platforms help them to appeal to younger investors. This is especially since social media and Internet searches ranked as some top sources millennials and Gen Zs tap for investing and financial knowledge, according to a report by the CFA Institute, titled Gen Z and Investing: Social Media, Crypto, FOMO, and Family.
'All of these services are consolidated and integrated into one-stop platforms which are usually designed to be user-friendly. Altogether, these advantages help digital brokerages scope out a clear value proposition from traditional brokerages,' Wong says.
Traditional brokers strike back
Incumbents are not taking things sitting down. They are innovating to spruce up their offerings, differentiate themselves and to win over younger investors.
A key area is customer service, which Investment Trends found was a top reason cited for using established brokers.
PwC's Wong highlights that traditional brokers are known for delivering personalised experiences and face-to-face engagements.
Chawla Vikramjit Singh, Phillip Securities director and head of securities (retail sales), says that the brokerage offers in-person customer service at its centres, and provides virtual personalised services through the community feature of its trading platform Poems' mobile app, which lets users ask analysts questions.
It also offers value-added services, which include providing clients with news of macroeconomic developments before the Singapore market opens and holding educational webinars.
Some traditional brokers tailor their strategies to younger investors, with financial literacy efforts that seek to lower entry barriers for beginner traders.
'For novices that are new to the world of investing, the challenge often lies in sieving out relevant information and addressing the big question of 'where do I start?',' says OCBC Securities managing director Wilson He.
Elgin Ting, CGS International Securities group head of strategic partnerships, notes that to cater to young, tech-savvy investors, the investment house offers educational, bite-sized content on its investment platform Up to make learning about investing less daunting.
Phillip Securities leverages social media by creating investment content on YouTube.
Others are throwing AI into the mix.
OCBC Securities' AI stock-picker tool, Oscar AI, identifies and predicts stock price movements and builds an understanding of an investor's trading patterns to serve them personalised recommendations for stocks from different markets, OCBC's He says.
Even as brokerages continue to jostle for dominance through innovation and pricing, it is still up in the air which platforms would emerge tops. But one things is clear – it is the investors who stand to win.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
11 hours ago
- Business Times
Can US ports handle a freight spike or will they be overwhelmed?
ARE Los Angeles and Long Beach heading for another port congestion crisis? Since the United States put tariffs on hold for a 90-day trade war truce with China on May 14, the market has expected a shipping surge driven by Chinese exports. Ocean carriers have re-instated suspended services, restarted vessels lying idle, and introduced new routes – revitalising transpacific lanes. But how much capacity has actually returned to the US-bound trade? Estimates vary. According to maritime consultancy eeSea, total capacity from Asia to North America will reach 2.4 million twenty-foot equivalent units (TEUs) in June – 400,000 TEUs more than May. That figure is projected to climb further in July to 2.8 million TEUs. The majority of this added capacity targets the US West Coast, particularly the ports of Los Angeles and Long Beach. Data provider Sea-Intelligence reports similar trends. Its latest weekly update shows a 17 per cent year-on-year rise in Asia-US West Coast capacity in June, with a projected 19 per cent jump in July. Meanwhile, East Coast capacity is growing more modestly – up only 7 per cent in June but expected to match the West Coast's 19 per cent rise in July. These figures are based on carriers' existing schedules, which remain subject to change. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The big question is whether Los Angeles and Long Beach can handle this influx. Will the port congestion seen in the pandemic era re-appear? Preliminary forecasts indicate that container volumes at both ports will begin rising in the second week of June, topping 100,000 TEUs a week. Volumes will continue climbing in the third week. While fourth-week data is not yet available, estimates suggest traffic will remain elevated. Many extra sailings are scheduled to arrive in late June and early July, suggesting persistently high throughput at least into mid-July. Historically, both ports handled their highest Asian import volumes in 2021 during the Covid-19 pandemic – about 10 million TEUs for the year. The Port of Los Angeles alone processed a record 520,000 TEUs in May 2021, while the Port of Long Beach reached its single-month peak of 400,000 TEUs the same month. Will the same influx appear again this time? Industry opinion is divided. Senior executives at leading carriers and terminals suggest the tariff deferral may not trigger a pandemic-style shipping boom. While June volumes are likely to exceed May's, early expectations may have overshot. Much of the inventory that had been sitting in warehouses shipped out quickly after the May 14 tariff suspension. And even if buyers place new orders, lead times mean many shipments will not depart until late June or July. Moreover, despite the suspension of a 125 per cent reciprocal tariff, the 30 per cent levy added this year – on top of 2018's Section 301 duties – means US-China trade has not returned to normal. The truce may offer temporary relief, but it is unlikely to generate a prolonged surge. Freight rates on transpacific routes have spiked in recent weeks. But does that signal true demand strength? A key indicator is the balance between cargo booked under negotiated contract (NAC) rates versus freight-all-kinds spot rates. At present, many freight forwarders are still able to secure lower-priced NAC slots — suggesting excess capacity remains. While sentiment may push prices upward temporarily, ultimate rate direction hinges on ship utilisation. If vessels sail full, rates will hold firm. If not, the rally will fade. So, will there be port congestion? A sudden and sustained spike in volume could strain operations. However, if elevated cargo volumes last only two to three weeks, the ports can manage. If imports climb more than 20 per cent above normal and stay high through July, congestion risks increase sharply. The bottom line is that Los Angeles and Long Beach are entering a high-alert phase. If disruption comes, it will probably begin to show in late July. CAIXIN GLOBAL Zhang Huafeng is the chief operating officer of Duke Shipping Agency
Business Times
14 hours ago
- Business Times
BHG downsizes Bugis Junction flagship outlet as department stores face shaky future
[SINGAPORE] Department store BHG is downsizing its flagship Bugis Junction outlet – its last remaining permanent store – from three to two levels. This follows the March closure of its Junction 8 store, which will be replaced by home furnishings brand Nitori. Nitori will also take over the third-floor space BHG used to occupy at Bugis Junction. The scaling down of BHG's Bugis Junction outlet comes on the back of other store closures. Besides Junction 8, it has shuttered four stores here since 2022, in Raffles City Shopping Centre, Jurong Point, Clementi Mall and Lot One. It follows a series of other closures of large department stores here. 'BHG remains a tenant at Bugis Junction on Levels 1 and 2, and we continue to work closely with them to introduce new brands,' said a spokesperson for Bugis Junction. BHG declined comment. In February, BHG opened a pop-up store at The Centrepoint, which will operate until August. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up BHG Singapore began in 1994 as Seiyu Wing On Department Store. In 2007, it was acquired by Beijing Hualian Group, one of China's largest commercial chain retailers, and has operated under the brand name BHG for the past 18 years. Homemaker Brenda Thio, 53, said: 'It is sad that these stores that have been around for so long are either gone or downsized.' But she said she mainly shops online now. 'I hardly shop at BHG and have bought only pillows, bolsters or bed sheets there once every few years.' A broader trend of decline Large department stores here and worldwide have faced decline owing to increasing competition from online shopping, exacerbated by the Covid-19 pandemic. Japanese chain Isetan will shutter its Tampines Mall outlet in November, after about 30 years. At its 2013 peak, it had six stores in Singapore. Its last closure was Isetan Katong in Parkway Parade in 2022. After closing the Tampines store, it will be left with two outlets – Isetan Scotts and Isetan Serangoon Central. Home-grown department store OG closed its Orchard Point store in 2022, after 18 years. Its remaining stores are in People's Park and Albert Street. Metro closed its flagship Centrepoint store in 2019 after five years, with two remaining stores at Paragon and Causeway Point. And two department store chains which used to be household names have called it quits. Robinsons, which still has an online store, shut its last physical store at Raffles City Shopping Centre in 2021, while John Little exited the local retail scene in 2017, after closing its Plaza Singapura outlet. Market observers said that with e-commerce offering a greater variety of products, competitive pricing and the convenience of home delivery, people are increasingly less inclined to visit large department stores. 'Today's shoppers increasingly seek personalised, curated and experiential retail experiences,' said Leung Sau Yee, senior lecturer at Singapore Polytechnic's School of Business. 'Traditional department stores, with their generalist, one-size-fits-all model, often fall short of these expectations.' Many department stores also rely heavily on mall operators to drive engagement, she said. Without distinctive products, brand curation or compelling in-store experiences, they struggle to offer shoppers a strong reason to return. Department stores have traditionally been anchor tenants in malls. But operating large-scale stores in prime retail locations, such as Bugis Junction, means incurring high rental, staff and inventory costs. As footfall declines, it becomes increasingly difficult to justify maintaining such expansive physical spaces from a profitability standpoint, experts said. Associate Professor Lau Kong Cheen, head of the Singapore University of Social Sciences' marketing programme, said department stores have been supplanted by large malls that offer a curated mix of specialised outlets. In short, malls are mega department stores. 'Malls house dedicated retailers for categories such as footwear, cosmetics, skincare, fashion apparel, accessories, jewellery and homeware,' he said. 'Each speciality store provides a focused brand experience that resonates more with today's discerning shoppers.' Professor Lawrence Loh, from NUS Business School's department of strategy and policy, said: 'Department stores cannot continue to be more of the same, providing huge varieties for all customers. If they are everything to everybody, they may end up as nothing to nobody.' From product-centric to experience-centric What could make the department store relevant again in a tough market? Prof Loh suggested merging the physical store with a digital one to offer holistic shopping experiences that are not found online. 'The 'touch-and-feel' in shopping is still valuable, but stores must give sufficient incentives to prevent the undesirable consumer behaviour of testing at stores and then going online to purchase elsewhere at lower prices,' he said. 'Department stores face the real challenge of being free showrooms for the low-cost e-commerce stores.' Other experts agree on the need to invest in omnichannel integration with a seamless blend of online and offline experiences, such as allowing customers to purchase online and collect in-store, or checking stock levels in real time, to compete with pure e-commerce players. Ethan Hsu, head of retail at real estate consultancy Knight Frank Singapore, said that technology such as personalised apps, fitting rooms that use augmented reality and artificial intelligence-driven inventory can improve efficiency and customer experience. They can also cater to modern preferences like sustainability, he said. In addition, he suggested community marketing activities that can build loyalty and differentiate stores from online retailers. These include supporting local charities, or hosting community events and cultural celebrations. Prof Lau suggested that stores frequently introduce thematic changes – for instance, cultural themes from different countries – to their product ranges. 'Just like museums and art galleries – they change their display by curating new exhibits to draw domestic visitors to make repeat visits,' he said. Exclusive collaborations with brands that have a limited presence in Singapore – including emerging international brands and local designers – could help, Prof Lau added. And stores can transform themselves into lifestyle destinations by integrating cafes with speciality in-house brews and food, and branded dining ware sold in-store, he said. Offering experiences such as personal colour analysis, cooking or baking workshops and food-and-wine pairings can make shopping more engaging, and cannot be replicated by online retailers, said Leung. She added: 'Ultimately, for department stores to thrive, they must shift from being product-centric to experience-centric, staying attuned to evolving consumer values and behaviours.' THE STRAITS TIMES
AsiaOne
19 hours ago
- AsiaOne
Bishan bak kut teh stall owner died of overwork trying to repay $100k debt, says wife , Singapore News
A 65-year-old bak kut teh stall owner in Bishan had died in January this year of overwork, his wife revealed, with his last wishes for her to carry on the business. Ang Yong Seh, owner of Xin Ming Road Bak Kut Teh, had worked tirelessly to repay a $100,000 debt incurred during the Covid-19 pandemic to keep their business afloat, his wife Lilian Chua, 66, told Shin Min Daily News. Following the pandemic, he often worked 18-hour days behind the stove at his stall located at Block 36 Sin Ming Drive. Speaking to Shin Min recently about her husband's sudden passing, Chua said her husband had been battling the flu for three weeks but still continued to work up till four days before his death. "I was worried for his health at the time but he told me, 'Don't worry, I can still live for a few more years'," said Chua. However, on Jan 9 this year, he suddenly experienced breathing difficulties and was rushed to hospital at about 11pm, but died several hours later. In a June 4 interview with online food channel HappyCat, Chua indicated that the reason she held on to the stall was because of her husband's last wishes. "I was at Tan Tock Seng Hospital just before he passed, I told him, 'You can't just leave me, to handle the stall alone... how can I sustain it, I'm just one woman,'" said Chua. "I asked him, 'Can I let it go?' He held on to my hand very tightly, meaning that he didn't want me to." The couple had started the business during the '90s after spending many years working at popular bak kut teh stall Rong Cheng Bak Kut Teh, which was started by Chua's brother-in-law, Shin Min reported. Chua also shared that surviving the pandemic — where takings sometimes fell to around $100 a day — had significantly depleted their savings. To tide themselves through the period, they'd taken out a $100,000 bank loan. Chua told Shin Min that times were tough as the rental of their stall was around $9,000 at the time, on top of their stall assistant's $4,000 salary. In order to repay the loan, the couple opened the stall every day, only taking a break for four days during the lunar new year. Ang would also wake up at 5am every day and only returned home at 11pm. Chua added that her husband did not have any health problems and claimed that a doctor had said the likely cause of death was due to overwork, leading to a weakened immune system. Knowing her husband's last wishes of wanting her to carry on the business, Chua told Shin Min that she took a break of just two weeks after his funeral before reopening the stall. [[nid:702521]] candicecai@
