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7 Things You Need to Know When Choosing Your Own Stock Brokerage Account in Singapore

Education ,   Lifestyle ,   Personal Finance

by CashOctopus • May 7, 2021

Many Singaporeans are aware of the success that people have had with brokerage accounts and hear their friends and family members talking about their own investments and stock brokerage accounts. This has led to widespread interest in why they should open brokerage accounts, how these accounts work and their benefits.


What are stock brokerage accounts

Stock brokerage accounts involve arrangements that consist of investors depositing funds with brokerage firms that are duly licensed. The brokerage firm has the responsibility of placing trades on the customer’s behalf. While the brokerage typically executes orders, the investors own the assets and investors are usually required to claim capital gains from the accounts as taxable income.

There is a wide variety of brokerage accounts and firms, which enables investors to have the chance to pick what is most suitable for their needs. A number of brokers go to the extent of providing substantial investment guidance and advice that they charge for accordingly.

Many online brokers offer secure interfaces that investors can use to for placing trade orders. This type of service is usually provided at reasonable rates. Brokerage accounts also vary in terms of factors such as the extent of trading on margin, the scope of assets that can be traded, analytical tools and how fast orders are executed.


Connecting investors

  • Brokerage accounts connect investors to the stock market. People who want to invest can open brokerage accounts with licensed firms such as online brokers. After opening and funding the brokerage account, the money that has been deposited can be used to buy investments such as mutual funds and stocks.
  • Brokerage firms help customers place their investment orders. They usually collect commissions for this service.
  • A brokerage account provides access to a variety of investments that range from stocks and bonds to index and mutual funds. Brokers may also provide more complex options such as forex.


Functionality of brokerage accounts

Several brokers allow people to quickly open an online account. The brokerage account can be funded by transferring cash from a savings or checking account, which is a process that typically takes a few days. Money can also be transferred between different brokerage accounts when someone makes the decision to switch to another brokerage firm.

Investors own the investments and money in their brokerage accounts and can withdraw money and sell investments at any time. Brokers are responsible for holding the account and serving as intermediaries between investors and the investments they seek to buy. Many brokers enable people to buy investments on their sites.

There are virtually no restrictions on how many brokerage accounts a person is entitled to have or how much money they are allowed to deposit into accounts on an annual basis.


Different investment accounts

There are different brokerage accounts and choosing the right one depends on personal investment goals, the type of investments an individual wants to purchase and the amount of help someone needs when selecting and managing investments.

(i) Online accounts

Online brokerage accounts refer to investment accounts with brokerage companies online. These types of companies enable investors to buy and trade their investments via trading platforms online. Online brokerage accounts are ideal for people who want to buy and manage their own investments.

(ii) Managed accounts

Managed brokerage accounts are provided with professional management services for investments. These services consist of choosing and managing investments for customers according to their goals.


Choosing a stock brokerage account

After making a decision regarding the kind of investment account a person wants, the next step is to choose the service provider. Several brokers do not require a minimum investment when opening an account and fees are not usually charged at this point.

While comparing different service providers, it is important to consider the charges for investments such as trading stocks and investing in mutual funds. Being aware of what to look out for is a critical step when choosing an account.


Why people apply for stock brokerage accounts

  • Successful investors are aware of how financially beneficial it is for them to purchase the best stocks. In a sector that offers several different investments, it can be challenging to determine whether or not a person actually needs a brokerage account for investing through a broker.
  • For people who are interested in the favorable returns that they can earn by identifying and investing in promising organizations, building a relationship with a good stock broker is highly recommended.
  • Opening a stock brokerage account with a broker gives people full control over their investment portfolios, which is a crucial step towards transformational wealth. Individuals can take on the responsibility of finding the best options for investing their money. A stock broker provides the tools that are required to enhance the prospects of success.


Quick tips for starting and growing investments in Singapore

  • It is essential to set clear financial goals and the amount required to reach personal targets.
  • Open a stock brokerage account.
  • Select a suitable style of investment according to personal financial needs, investment goals and risk profile.
  • Effectively manage an investment portfolio after understanding the different companies that you are interested in.
  • Gain exposure to more opportunities by investing in foreign stocks
  • Grow CPF savings for financial management and retirement.


Brokerage companies in Singapore

Popular brokerage companies in Singapore include Standard Chartered, SAXO Markets, RHB Securities, Phillip Securities, OCBC Securities, Citibank Brokerage and DBS Vickers. Picking a good brokerage company is very important because each dollar saved during transactions affects investment returns.

The brokerage that a person picks is determined by their current situation and sum of investments. It is vital for any novice or established investor to carefully consider what will work most effectively for them and what they are thinking about investing in for the future, such as getting a loan to setup an account if necessary.

Prior to choosing a particular broker, people should carry out adequate research. The good news is that picking the wrong broker is not the end of world since people are at liberty to change brokers when they want to. 


Things to think about when choosing a stock brokerage account

Identifying the right stock broker can be a difficult and overwhelming decision. New investors may perceive all brokers as the same entities. However, brokers are different and these differences can have a significant impact on the choice a person eventually makes. Narrowing down this important decision involves considering the following factors:


1. Investment strategy

A broker should ideally be chosen according to whether or not they match an investor’s key investment strategy.


2. Fees

While it may not be possible to control tax rates or returns from investments, trading fees can be determined.


3. Banking

Some brokers only deal with trading while others offer additional banking services for people who want to be able to access financial management services as well.


4. Advice

Some people opt to handle their own investments but some seek guidance from professional financial advisors along the way to review their investment plans.


5. Research

Brokers may provide tools for research, especially for investors who are managing their investors on their own. These tools are essential for analysing and choosing stocks.


6. Investment options

Basically, all brokerage companies have the capacity for trading stocks, bonds and mutual funds, but complex or more advanced investments such as forex are not offered by all brokerage companies


7. Customer service

Customer service is often limited in terms of hours due to the operational costs involved, but a number of brokers include helpful live chats on their websites. It is also important to find out about the availability of mobile apps since many people want to be able to trade while on the move.