Setting up an account to buy shares in Singapore, is actually a relatively simple process. You just have to walk into any of the brokerage houses (Some of them even have branches in the heartlands!), say you want to open an account, and the nice lady will hand you all the forms to open an account.

And forms, primarily is the brokerage account form, CDP form, and also an electronic payment for shares (EPS) form. This is primarily to let you pay from any ATM or internet banking rather than sending them cheques everytime you wanna buy something.

In short: Walk in, say you want to open an account.

The more pressing question would be, since there are so many brokerage houses, which one should you choose?

Over the last few years, the entire banking and finance industry in Singapore went through quite a number of shake ups, mergers and acquisitions. What used to be Vickers Ballas became, DBS Vickers. What used to be OUB Securities, Kay Hian, and a few others, eventually became UOBKayhian. As such, whats left, is pretty much the list you see on the left.

Just a quick summary, we have:
DBS Vickers (Part of DBS)
UOBKayhian (Part of UOB)
iOCBC (Part of OCBC)
Kim Eng (Independent)
Goh Direct (Used to be GK Goh, bought by CIMB Malaysia)
P.O.E.M.S (Part of Philips Capital)
Fraser (Independent)
DMG (Linked to Deutsche Bank)
Lim & Tan (Independent)

We would not delve into details regarding foreign brokerage houses in Singapore, simply because it would be difficult to open an account with them. (And if you are opening an account with them, then this article's not for you!)

In terms of choosing a brokerage firm, theres actually quite a bit to consider. In fact, if you don't mind the hassle of visiting all of them, you should open an account with everyone of them. Reason being that each of them tend to have a certain set of specialties. Also, given that the market has become relatively competitive, most brokerage houses do not require you to place a deposit if you are going to open a cash account.

So, as a retail trader/investor, what should you look for in a brokerage house?

Broker

Personally, I feel the broker would be one of the key criteria. Usually, there will be a person, called the broker, who will manage your account. Given the competitive environment, most brokers do provide additional value added aspects in order to retain you with them. Some include a form of trading journal, which allow you to see how they would choose stocks. Others could be regular reports sent straight to your mailbox. Some brokers tend to be more of value traders, others could be momentum traders, so after corresponding with them for a while, you might know if their style is similar to yours. (Of course, no harm learning different ways)

Research Reports

As mentioned above, brokers usually would send you certain reports. Usually, the brokerage houses would also have their own reports available online for their clients. For those, you have have to judge for yourself. A good report, delivered at a correct time, can help you make informed decisions on any investments or trades.

Internet Trading Platform

Well, face it. Most of the people here, would most likely be trading over the internet. It has proven to be the most accessible and cheapest way to trade. Most of the brokerage houses have significantly different features on their platform. Seriously, the only way to see if you like it is to open an account and try it out.

Certain things to consider would be if the platform is catered to your use? As a long term investor, you might not have too much need for speed, but might prefer more alerts or research reports. To a trader, you might have a preference for certain tools. We would discuss more about the tools in another topic on another day :)

IPOs

Initial Public Offering (IPOs) can also be a consideration. Certain brokerage houses have a higher likelihood of giving you IPO shares. This mean you don't have to go to the ATM to ballot for those shares. Usually houses that take on underwriting of IPOs would have some placement shares for their own clients. Don't be afraid to sound off to your broker that you want IPO shares. Usually, the more you trade, the happier your broker is, the more likely you will get IPO shares. But don't be afraid to ask, even if you don't trade much through them.

Commissions

Most brokerages in Singapore offer fairly similar commission charges. Usually, through online/internet trading, it would be $25 minimum or around 0.275% to 0.28%. If trading through a broker, it would be around $40 minimum or around 0.4% to 0.5%. However, if you are a frequent trader (meaning $50k trade size, or high trading volume per month), you would usually be able to negotiate for a lower rate. Like 0.2%

In this article, I've just highlighted a few points to consider in choosing a brokerage house. However, if you don't mind the hassle, it can really be better if you were to open an account with all of them to try out their system.

Personally, I have an account with quite a few of them. But over time, you would tend to drift to the platform and broker you are more comfortable with.

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