While many of the world’s discount investment brokerages are waging a commission war, Singapore’s DBS Vickers has decided to raise commission fees on stock purchases.
If you think Singaporean landlords are irrational when they try doubling their tenants’ rent, well….you ain’t seen nothing yet. In some cases, DBS Vickers is charging nearly 500% more in purchase commissions. Here’s an example:
On May 7, 2012, I rebalanced my portfolio and purchased 3,820 shares of the short term Canadian Bond ETF (symbol XSB) through DBS Vickers. It was a big purchase, costing me $122 in commissions.
Today, if I were to make the same purchase, DBS Vickers would stick me for nearly $600.
Apparently, this is DBS Vickers’ bizarre answer to Standard Chartered’s commission slashing.
Standard Chartered Bank no longer charges a minimum commission, so you could feasibly purchase $1000 of U.S. shares, and pay just $2.50. For Singaporean shares, it costs even less.
Try to do the same thing with DBS Vickers, and the bank will charge you roughly $30 for the same $1000 purchase.
In the ten years that I’ve used DBS Vickers, this minimum $30 charge was standard. The brokerage has never catered to people investing small sums.
But their rate increases for larger purchases was poorly communicated. When I recently made a purchase online, the confirmed commission for my purchase was $31. Then I received my paper transaction, revealing a commission price of $110.
I called the bank, pointed out the discrepancy, and they reimbursed me the difference. The rep stated that DBS Vickers had announced their commission increase two months previous, on their website. He also added that the next time I make such a trade it will cost me $110, and not the $30 I used to pay.
For a discount brokerage, such commissions are in the nosebleed bleachers of shame.
And I highly suggest that investors look elsewhere for a suitable brokerage; there are much cheaper alternatives. E-Trade is the cheapest local brokerage for U.S. shares, charging just $9.99 per trade, regardless of the purchase size. It’s available in Singapore to everyone without a Canadian passport. But there’s the issue of American estate tax to pay upon death, because the brokerage is actually a U.S. one.
Standard Chartered has expensive commission rates by North American standards, but they’re playing Santa Claus next to the DBS Vickers Grinch. Unfortunately, they do gouge their clients on exchange rates when purchasing stocks (or ETFs) off foreign markets.
Perhaps I’ll open a U.S. dollar account at another bank, open a brokerage account with Standard Chartered and when I’m ready to purchase, send the U.S. dollar cheque to Standard Chartered to limit the exchange rate gouging.
I offer my sincere apologies to everyone I have steered to DBS Vickers over the years.
With brokerages slashing their commissions around the world, I had no idea that a bank would be daft enough to combat that by raising their own.