Stock broking industry in singapore
However, our top priority now should not be to implement a similar type of brokerage system as the USA. Unhealthy competition between local broking houses.
Local broking houses and remisiers undercut each other. In the end, everybody loses. Revenue for the brokerage houses and remisiers is reduced.
Demanding small clients may not get the service they want if the motivation of a remisier is to balance the time he has to spend on such clients versus the returns. The competition is not only between the broking houses, but sometimes also amongst remisiers of the same broking house.
This can happen during roadshows, where a client may not reveal immediately that they already have a broker with the same broking house. Most clients expect their brokers to give them the lowest commission rate out-right, not knowing that they may have to meet certain volume criteria before such a low rate can be granted.
For the local broking industry to survive, this kind of unhealthy competition has to stop. The Singapore stock broking industry is certainly facing many challenges. I would not venture to say that the industry has to innovate or reinvent itself, but rather it is downright very practical things that has to be done by the various responsible parties. Instead of working independently within their narrow scope of self-interest, all concerned parties have to work in consultation and in synergy of each other.
If all parties are not united in the objective of improving the situation, the ultimate loser will be the Singapore stock-broking industry and its prominence in Asia, or even in S.
China together with Hong Kong is already coming up very fast. Indonesia, with a domestic base of million people, can outdo us in S. Asia if they put their act together better than us. With their improved trading platforms, the local broking houses should then explore the possibility of attracting overseas investors to trade in the SIngapore stock market.
SGX and the member stock broking houses should also work towards making it easy and simple for overseas investors to trade in our Singapore stocks. The value-add of remisiers has to be recognised as they not only act as "no basic salary" sales-force, but also bear complete risk of the clients that they acquired.
Although there are efforts by some broking houses to introduce cash-deposit trading, a lot of clients still prefer to keep money in their own hands. The contra-players would also not see the advantage of depositing their money with the broking houses.
In large countries like China or the USA, it may perhaps make sense to have cash-deposit trading as the population mobility is high, and the risk of bad-debts from open-credit trading in a large continent will be too high, but not in Singapore. The undercutting of commission resulted in very thin commission that has to be shared This does not commensurate with the financial resources that the broking house needs for rentals, backroom support, trading platform improvements etc.
It also does not commensurate with the high risk that remisiers have to bear in terms of bad-debts. We should unite to gain back our share lost to external forces, but sadly it seems that we are competing even more amongst ourselves for the slowly shrinking piece of cake taken away by such external forces. The opinion expressed here is the personal opinion of the author, and any mistake made is solely that of the author, and not that of the SRS or its Ex-Co.
What analysts now say AS THE market weakened further last week, several more Compare Aviva's insurance quotes with your existing insurer's! AVIVA is on an aggressive campaign with ads everywhere, more Website design by Webwise Workz. Welcome to the Society's new webpage I will surmise each of them as below: Singapore stock market vs Foreign stock market If you are trading in the US market, you would have noticed the flurry of activity in this market.
Conclusion The Singapore stock broking industry is certainly facing many challenges. Many of them have been around, in one form or another, for more than 30 years, and are definitely not about to disappear — companies such as UOB Kay Hian, Kim Eng Securities, and Phillip Securities for example.
UOB Kay Hian, for example, can boast of having around remisiers in its employ. But there are other important indicators of size — Kim Eng Securities, for example, has done very well in the past few years, despite market downturns. Other products and services such as hedge funds, wealth management and corporate finance, although closely related to securities, are kept separate from the stock broking company. They are offered by its sister companies within the group instead.
But subtle differences do exist. For example, PhillipCapital offers insurance broking on top of shares trading, and actually maintains two kinds of sales force — desk bound remisiers who focus on share trading, and mobile financial advisors who sell unit trusts and insurance products.
The company even offers home loans as well as real estate consultancy to complement its suite of retail investment services. Kim Eng Holdings, on the other hand, has stayed away from insurance products. It markets itself as the largest non bank-backed securities and investment brokerage house in Singapore, with the most established sales network in the region. Through its major shareholder, the Yuanta-Core Pacific Securities Group, the company possesses an in-depth knowledge of the Taiwanese securities market as well.
The remisier's lot Most people who enter the stock broking industry join as either remisiers or dealers. Although the terms are often used interchangeably, there is actually a difference between a remisier and a dealer.
A dealer is a full-time employee of the company. He is paid a basic salary, but takes a smaller split of the commissions earned. Remisiers, on the other hand, are not full-time staff of the company. They are not paid any basic salary, but take a larger share of the commissions split. The industry norm for commissions split is around Remisiers are very much their own bosses — how well they do and how much they earn is entirely dependent on how entrepreneurial they are.
Remisiers are, in effect, the sales staff of a stock broking company. They are at the front-line of the relationship between the company and its clients. Part of that relationship involves the complex task of risk management, both on the behalf of the client as well as the company. For example, suppose that a client is risk-averse and he decides to invest in a speculative stock.
The remisier needs to exercise professional judgement and advise if it is the best investment for the client. On the other hand, if the remisier is dealing with a high net-worth client, whom he is certain has sufficient resources to invest and has a good risk appetite, then it is up to him to pitch the best possible range of investment options to these individuals.
Much has been made of the threat of online trading to the viability of remisiers. Truth be told, the threat is over-stated. There are niche companies that base a lot of their business strategy around online trading, but even they project only a gradual growth in this particular segment. More importantly, even the most IT-savvy investor would feel nervous whenever he is about to place a large order of several million shares.
He is very likely to check with a remisier, by phone, just to be sure.