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Business Times
09-05-2025
- Business
- Business Times
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.
Business Times
02-05-2025
- Business
- Business Times
iFast receives MAS trust business licence, enhances wealth management capabilities
[SINGAPORE] iFast Corp announced on Friday (May 2) that its global trust, a Singapore-incorporated entity within the group, has been granted a trust business licence by the Monetary Authority of Singapore. This development expands iFast's wealth management capabilities, further enhancing its platform to support clients across the entire wealth lifecycle, from accumulation and growth to preservation and legacy planning. Trust structures historically play a crucial role in preserving generational family wealth, offering financial security for dependents such as minors and the elderly, facilitating business continuity and succession planning, and protecting assets against potential risks or mismanagement. However, trust solutions are typically limited to high-net-worth (HNW) individuals, largely due to high costs, complex structures and stringent entry requirements. With the establishment of iFast Global Trust, the group aims to lower conventional barriers and extend trust solutions to more investors. The new offerings will cater not only to the HNW segment through bespoke structures, but also to the broader market by removing typical constraints such as high minimum asset thresholds and cumbersome onboarding processes. These trust solutions are powered by iFast's proprietary IT infrastructure, and will be accessible via iFast Singapore's business-to-business platform for financial advisers and other financial institutions, business-to-consumers FSMOne platform, and the adviser-assisted iFast Global Markets platform. Tan Check How, general manager of iFast Global Trust, said: 'iFast Global Trust recognises that today's clients value affordability, transparency, and convenience alongside service excellence. The digital platform underpinning the trust solutions allows for efficient management, integration with legacy planning goals, and direct access to a broad suite of financial products through iFast's investment platform.' Shares of iFast closed on Wednesday 1.3 per cent or S$0.08 lower at S$6.22.
