Before you can start investing in the markets, you need to open a trading account with a brokerage. In Singapore, one such brokerage you can look at is Phillip Securities, Singapore's largest retail broker.
Operating under the PhillipCapital umbrella, Phillip Securities was the first broker in Singapore to launch an online trading platform, Phillip's Online Electronic Mart System more commonly known as POEMS. Established since 1996, POEMS has become one of Singapore's most popular trading platforms.
When you open an investing account with Phillip Securities, you are able to opt for its newly launched POEMS Cash Plus Account. Besides providing access to global stock markets, POEMS Cash Plus Account also provides personalised 24/7 dealing assistance and consultation service at 15 conveniently located Phillip Investor Centres. Like a proponent of investor education, PhillipCapital also provides free trading webinars, seminars and research materials on POEMS to boost financial literacy among investors and enable them to make informed investment decisions.
Markets That you could Trade With Low Cost POEMS Cash Plus Account
Today, investors aren't limited to just investing in companies on the Singapore Exchange (SGX). With POEMS, you can invest in a total of 26 exchanges globally, including the United States, Hong Kong, China, Australia, Germany financial markets, or regional markets such as Malaysia, Thailand and Indonesia.
For investors who choose the POEMS Cash Plus Account, you will be happy to know that it is one of the lowest-cost trading accounts in Singapore and the US. Charging just 0.08% of your trade value, with no minimum commission, a S$3,000 investment in Singapore stocks will only incur S$2.40 in brokerage commission fees. A flat rate of between USD 5.88 – 8.88 is charged for US stocks. This brokerage rate is applicable for investment using Central Provident Fund (CPF) and Supplementary Retirement Scheme (SRS) money.
Editor’s Note: POEMS happens to be running a promotion where it's reducing its regular commission charges to 0% commissions for U.S. shares, 0.05% for Hong Kong shares, and 0.08% for Singapore shares. Please make reference to the table below for that current commission fees (by 3 March 2021).
One interesting observation about the POEMS Cash Plus Account is that it has a tiered pricing model based on the value of assets held in a custodian account with POEMS, as opposed to the size of each transaction.
This differs from most other brokerage firms in Singapore, where you typically enjoy a lower brokerage rate whenever your transaction size is higher, typically at S$50,001 to S$100,000, or at S$100,000 and above.
The method POEMS uses to find out your brokerage rate is more advantageous to smaller retail investors, who will find it difficult to achieve a single trade size that is above S$50,000. For example, even if you intend to invest about S$5,000 every month, and decide to save up for 6 months so that you make a one-time investment of S$30,000, you still be unable to qualify for lower brokerage charges for investment around the next tier, which is typically at S$50,001.
The POEMS Cash Plus Account bases its brokerage rate on the value of assets held under its custody, making it simpler for investors to enjoy the low brokerage rates. An investor who starts investing S$5,000 per month will qualify as a Premier customer (S$30,000 to S$249,000) after six months – and can enjoy a lower brokerage rate for those subsequent trades via the POEMS Cash Plus Account, it doesn't matter how small they are, as long as the value of their assets held with POEMS is S$30,000 and above.
To become qualified as a Privileged customer, the asset under management should be at S$250,000 or more. POEMS investors can purchase a combination of stocks, bonds, money market funds or maybe even hold cash in their POEMS Cash Plus Account. These types of considered as asset under management and causes it to be much easier for POEMS investors to become qualified as a Privileged customer and relish the lower brokerage rate.
Pay For Your Investments In Foreign Currencies
Another benefit of the POEMS Cash Plus Account is it allows you to pay in foreign currency. You enjoy both convenience and price efficiency when trading overseas stocks. There's a total of nine foreign currencies (USD, HKD, MYR, JPY, AUD, GBP, EUR, CNY and CAD) that you could hold onto, apart from SGD.
For example, if you wish to invest in US-listed companies such, as Apple and Amazon, or Singapore listed companies trading in USD, such as Dairy Farm International or Manulife US REIT, you need to ensure that you are not only getting a good price for that stocks, but also a good currency exchange rate. This is because you will need to settle the trades in USD and exchange your SGD for USD. When the exchange rate is not favourable or transparent, then you may be paying more (in SGD) whether or not the price in USD remains the same.
When the SGD to USD conversion rate is favourable to you (i.e. the SGD is robust relative to the USD), you might want to convert to USD today, even if you're not looking to invest in US-denominated stocks immediately.
The POEMS Cash Plus Account enables you to maintain foreign currencies in your account. As a result, you can choose to settle your purchases or sales in both foreign currency or in SGD.
Earn Interest On Funds Deposited In Your POEMS Cash Plus Account
If you have funds in your POEMS Cash Plus Account that are not yet invested, or receive funds inside your account after selling some stocks, you don't have to worry about money being left idle. For any amount above 50,000 held in SGD, USD, HKD and AUD, you will earn interest on credit balance up to 0.15%, find out more in POEMS Cash Plus Account Infosheet.
To enjoy higher returns on your uninvested monies, you can opt for POEMS's Excess Funds Management facility that automatically parks idle cash in your POEMS Cash Plus Account in the Phillip Money Market Fund, which can earn you interest of about 0.33% p.a. [0.3353% p.a. (SGD), 0.3261% p.a. (USD) as of 1 March 2021].
Whenever you invest through POEMS, funds will automatically be deducted from your holdings with Excess Funds Management facility.
Do note that as with all types of investments, money market funds committed to via Excess Funds Management facility are neither risk-free nor would be the advertised interest rates guaranteed since this is based on prevailing market interest rates. You can read up more about Excess Funds Management facility here, or watch a brief yet informative Q&A video here.
Assets Are Held In A Custodian Account Via Phillip Securities
Similar to a lot of brokerage firms in Singapore, any assets deposited or transacted through the POEMS Cash Plus Account will be held in a custodian account with Phillip Securities. The only real exception is investments made using CPF/SRS monies. Your account will also be automatically credited with dividends and charges that you earn from your investments.
One thing we like about the POEMS Cash Plus Account is you can easily designate it as your primary investment account. Unlike some other brokers that may require you to link your brokerage account to a separate bank account, the POEMS Cash Plus Account may be used not only to make trades and to hold your shares, but additionally to hold any cash (in SGD or forex) that you may have set aside for your investments.
This way, you minimise conflating neglect the returns and investment deposits from other sources of income that you may also receive (e.g. your salary). For self-directed investors, most of the services that you need can be found in the POEMS Cash Plus Account.
There is a maintenance fee payable each quarter. This is at $15 per quarter for SGX stocks (waived if there is 1 trade per quarter) and $2 per counter per month for foreign shares (waived with the least 2 trades per month or 6 trades per quarter or the least S$132 brokerage per quarter). However, for Privileged customers with $250,000 or more assets under management, account maintenance fee is automatically waived.
Apply For A POEMS Cash Plus Account
Besides the help that you can access via the POEMS Cash Plus Account, Phillip Securities is really a full-service broker that provides its customers with research, platform tools, webinars and seminars. You can also invest beyond the stock market, into unit trusts, bonds and receive securities advisory services too through POEMS.
Account opening can be achieved entirely online and investors who submit their registration via Myinfo before noon might have their account opened by the next working day.