iFAST

[Sumeria]

I forgot to add one more point... Try to get through to their hotline during a day when their system breaks down and you will be exasperated. Online chat is so busy they don't bother to queue you. And I have been waiting for one hour on the phone line for my turn to get through to their Customer Service. They must be short of staff or many people must be lining up withdraw/amend/put in orders via their customer service.

[opmi]

FSM may be doing well, but as a client of FSM I must warn others who want to open an account with them that its website for trading shares is very prone to technical problems. For example, for one hour this morning since market opened, the system is full of tech problems. My orders can take a few minutes to go through, and after they have, they are shown as "Reveived" rather than "Queued", and is not shown on SGX system, until another few minutes. If you like to withdraw, you can't either. One moment the system will show you have purchasing limit, and the next moment, it will tell you that your account is under review, and will take 3 days to be completed. Without purchasing power, you can't key in any order at all.
This is not a one-off problem. They have system problems regularly. As a result, I have to leave my account with other broker open. Also, if you leave your shares under FSM custody, and the above problem arises, you can't sell your shares through other brokers at all, since they are not held under CDP. To transfer your shares to CDP takes them easily 2 weeks, a time period that is ridiculously long in this age!
So those who want to switch out of other brokers to FSM, beware.

same as Phillip Securities... brokers are big bene during this CB period. Almost passive income....until contra losses comes in....

[dreamybear]

FSM may be doing well, but as a client of FSM I must warn others who want to open an account with them that its website for trading shares is very prone to technical problems. For example, for one hour this morning since market opened, the system is full of tech problems. My orders can take a few minutes to go through, and after they have, they are shown as "Reveived" rather than "Queued", and is not shown on SGX system, until another few minutes. If you like to withdraw, you can't either. One moment the system will show you have purchasing limit, and the next moment, it will tell you that your account is under review, and will take 3 days to be completed. Without purchasing power, you can't key in any order at all.
This is not a one-off problem. They have system problems regularly. As a result, I have to leave my account with other broker open. Also, if you leave your shares under FSM custody, and the above problem arises, you can't sell your shares through other brokers at all, since they are not held under CDP. To transfer your shares to CDP takes them easily 2 weeks, a time period that is ridiculously long in this age!
So those who want to switch out of other brokers to FSM, beware.

Thanks for sharing your experience.  

It may be useful for shareholders to surface such issues to the mgmt and ask about the IT strategy.

If it is affecting you, you may wish to write to https://eservices.mas.gov.sg/consumerfeedback/ for MAS to investigate.

I do think brokerages need to spend more on their IT systems(both maintenance and offering friendlier features), e.g. it did take them quite a while to offer e-statements. Other than the brokerage online interface, I noticed sometimes, the EPS amt is not reflected in the bank's internet banking system. For a long time, I thought it could be the bank's problems. However, I wonder if it could be the automated batch jobs from brokerage to the bank failed and the IT dept failed to notice.

Personally, I think it is sad to pay brokerage fees and have to accept whatever shortcomings the vendor "offer".

[¯|_(ツ)_/¯]

14 May 2020 Q&A for iFAST eAGM.
(click to read)

Valuebuddies take note in the event that iFAST awarded Singapore Digital Banking license, 
new shares will be issues to raise capital requirement.

Stay home and stay healthy, everyone.

[karlmarx]

Thanks for your insights.

Yes, I think iFast succeeded in HK and Malaysia because these are markets where they don't have competition. I am surprised that HK doesn't have a lot of online platforms to compete with them. 

What I cannot understand is how they have the advantage over Philips given what you said about their low-cost offerings. Not sure if any body here have insights.

I think you misunderstood. I'm saying that iFast does not have a pricing advantage over Phillips. In fact, based on their advertised fees, Phillips' pricing looks more competitive than iFast. iFast's advantage is that its UT platform has been in the market longer, and they also market themselves better.

iFast's business with RFO is also similar to its business with its current Financial Advisors, like Providend. In other words, RFO is also an FA like Providend. Their difference is in the networth of their clients. So iFast isn't doing a 'new thing' with what it is doing with RFO, except for their China JV. I believe RFO has more to gain from the publicity of their JV, than iFast.

[EnSabahNur]

Thanks for your insights.

Yes, I think iFast succeeded in HK and Malaysia because these are markets where they don't have competition. I am surprised that HK doesn't have a lot of online platforms to compete with them. 

What I cannot understand is how they have the advantage over Philips given what you said about their low-cost offerings. Not sure if any body here have insights.

I think you misunderstood. I'm saying that iFast does not have a pricing advantage over Phillips. In fact, based on their advertised fees, Phillips' pricing looks more competitive than iFast. iFast's advantage is that its UT platform has been in the market longer, and they also market themselves better.

iFast's business with RFO is also similar to its business with its current Financial Advisors, like Providend. In other words, RFO is also an FA like Providend. Their difference is in the networth of their clients. So iFast isn't doing a 'new thing' with what it is doing with RFO, except for their China JV. I believe RFO has more to gain from the publicity of their JV, than iFast.

Thanks for the clarification. 

Actually what I meant to say is, how iFast can win new and retain existing customers if their offering are not as low cost as Philips. Unless there are other factors at play.

[karlmarx]

As mentioned, iFAST has been in the market earlier, and also longer, than competitors such as Phillips.

The market has also been growing over the past decade. So iFAST (and its B2B clients) has not only been getting more customers, but those customers's income have also grown, which means more money to invest.

So for the company's AUA to continue growing as it had, it either has to capture more of the market, or at least maintain its share in a growing market.

I think it is quite certain that the market will continue to grow. The belief of continue income/wealth growth in Asia is why banks based in Singapore have been very aggressive in expanding their wealth management units (through both expansion and acquisition) over the past 10 years.

What is not obvious is how much growth iFAST can capture, and how much it can earn from it.

As also previously mentioned, Phillips is not the only competitor to iFAST. There are now plenty of low-cost investment platforms which provide access to a diversity of funds or diversified portfolios which compete with them for B2C customers. For customers that do not like to DIY, and instead rely on advisors, iFAST's B2B clients are competing with other IFAs/EAMs, or bank wealth management units.

Singapore's wealth management market is about $3,000b. And iFAST's AUA is about $10b, or 0.33% of that. You can be an optimist and say that it means iFAST has huge opportunities to grow.

But you also have to consider why the other $2,990b is not captured by iFAST. Who is managing these money? What competitive advantage could they have? And under what conditions will the owners of these money will move them to iFAST, or their B2B clients?

[Curiousparty]

Regulated business .... not sure if any Tom dick Harry can just set up shops overnight ...

Ecosystem - not sure if any newbie or wannabe can just come in and say we want to conquer the market in Singapore overnight ....


https://www.schwab.com.sg/

Even a big giant like Charles Schwab is forced to close shop after a few years ... haha haha





Sent from my iPhone using Tapatalk Pro

[ghchua]

Hi karlmarx,

Some of my thoughts on your replies on this topic.......

As mentioned, iFAST has been in the market earlier, and also longer, than competitors such as Phillips.

iFAST is not the first one to come out in this market with their B2C platform. They started off as an online forum with research articles, and later move on to offer unit trust products. The earlier pioneer of selling unit trusts online using B2C model is actually finatiQ (backed by OCBC), which eventually dropped out. iFAST didn't complete on price alone to grow its AUA throughout the years. There are other merits of an online platform besides pricing which attracts DIY investors.

So for the company's AUA to continue growing as it had, it either has to capture more of the market, or at least maintain its share in a growing market.

Not really so. AUA is based on assets under administration. Even if you lose some market share, as long as the unit trusts/stocks/bonds etc under their trust goes up in the long run, AUA can still increase with higher asset value due to long term market upside. Which is why they always encourage investors to invest for long term, and keep those investments with them for the long run.

As also previously mentioned, Phillips is not the only competitor to iFAST. There are now plenty of low-cost investment platforms which provide access to a diversity of funds or diversified portfolios which compete with them for B2C customers. For customers that do not like to DIY, and instead rely on advisors, iFAST's B2B clients are competing with other IFAs/EAMs, or bank wealth management units.

Yes, there are a few low cost investment B2C platforms coming out lately. But can they complete on diversity of unit trust products, scale and multiple financial products that iFAST offers on its platform? These low cost investment platforms could not complete on diversity currently, so most of them are currently offering all-in-one robo portfolio which investors could only select a portfolio to invest, but couldn't select funds. This is because they currently could not attract enough fund managers to offer their products on their platform as they do not have the economics of scale yet. It remains to be seen how many of them can survive in the long run.

As for Phillips, they have been in the market long enough and their focus had been always on stocks, not unit trusts. Yes, they can capture some market share from iFAST with their lower cost offering and switching funds "carrots" in the short term. But it remains to be seen whether they can complete with iFAST meaningfully for market share in the long run with their resources. dollarDEX also have the backing of insurance gaint Aviva, but they also did not make significant progress in the B2C UT space. Ultimately, it is not whether you have a strong backing but whether you are willing to commit resources to upgrade systems and processes that will make you successful.

As for B2B, it is still a very big pie out there but with many small players in the IFA space. Some IFAs use multiple platforms so iFAST might benefit from their growth, together with other platforms. It need not be me or you gain. Since B2B platform is transparent to the end customers, it is a different set of requirements for IFAs to prefer one platform to another. However, it is fair to say that iFAST is not one of the first mover in this B2B space, so it need some time for them to scale up substantially. Investment in IT and process will be the key to gain wider usage of their platform, especially with bank wealth management units.

[Wildreamz]

https://www.glassdoor.sg/Reviews/iFAST-C...481705.htm

I will be cautious.