I don’t know much about timing the market or complex chart patterns. But I know about brokerage fees.
As a long-term, buy-and-hold type investor, I only focus on 2 things:
- Time in the market
- Minimising my trading expenses
Time in the market is easy. I use a simple Bogleheads-type investment strategy, where I purchase ETFs (a basket of stocks, like the S&P 500) and hold on to them for years.
Minimising trading expenses, on the other hand, is a different story.
Trading expenses will eat you alive
According to Business Insider, the average annual return on the S&P 500 over the last 10 years is about 12.39%*. If you invested S$20,000, in 2013, you would have made S$2,478.
Here’s a hypothetical scenario where we minus various kinds of broker fees from your earnings:
|Inactivity fee||– S$25|
|Withdrawal fee||– S$15|
|Settlement fee||– S$70|
|Commission fee||– S$100|
|Total trading expenses||– S$210|
|Overall earnings||S$2,268 (- 8.5%)|
With fees like this, you’ll end up losing 8.5% of your earnings. Of course, this is a worst-case scenario, but it shows how devastating brokerage fees can be to your bottom line.
The state of brokerages today
So, the answer is simple—use a low-fee broker. Right?
After all, every broker today seems to offer no settlement fees, no custody fees, and no platform fees.
Wait. Let me read that again. It’s actually:
No settlement fees*, no custody fees*, and no platform fees*.
*Terms and conditions apply
As someone who has had numerous “surprise fees” show up on my trading statement (such as, maintenance fee, administrative fee, etc.), I am sceptical whenever I see asterisks.
That’s one of the reasons why I’ve switched brokers 3 times over the past 4 years, all in search of a broker that simply delivers on their promise.
With CMC Invest—I think I’ve found it.
Finally, a broker that doesn’t hide behind asterisks
Head to the CMC Invest website, and all the information you need is listed front and centre. Terms and conditions for key features and promotions are listed upfront, not hidden behind asterisks.
Their offering is clear and simple:
No hidden or unexpected fees.
No platform fees. No settlement fees. No custody fees. No inactivity fees.
Without extra fees hindering my trades, my investments have more room to grow and compound. As a long-term investor, an extra 1-8% of fees saved each year can go a long way.
An interview with the chief
I had the pleasure of interviewing Christopher Forbes, Head of CMC Invest (Singapore). My mission: to investigate if CMC Invest is truly the real deal.
Disclaimer: This interview has been edited for clarity and brevity.
Hey Chris, thanks for speaking to me. So, zero platform, inactivity, settlement, or custody fees. That’s a pretty bold offering. Is that for real?
100%. We want our clients to invest for the long-term and save for the future. Hidden costs are a big deterrent. Imagine carrying a bucket of water with a small hole in there—that’s what hidden fees do over time.
As someone who’s paid those unexpected fees, I totally agree. But if you slash those fees, how does CMC Invest make money?
Well, we have two main ways of making money. The first is a monthly subscription to Platinum and Diamond tiers (the gold is completely free and where most investors will begin their journey).
The second is through charging an FX spread of 40 basis points (0.4%) on the Diamond tier over interbank rates—which is one of the lowest in the market.
Yes, FX spreads can really eat up profits, and 0.4% is about as good as it gets. Currently, I mainly trade the US and Euro markets. Can I access them on CMC Invest?
Sure, you can. We offer 15 markets, primarily Singapore, Japan, Hong Kong, the US, Canada, and most of Europe. We’re adding Australia in December this year. The CMC Markets group actually has a seat on the ASX exchange as a market participant, so we’re excited to offer this market soon.
That sounds great. With such a global reach, do I have to worry about customer service? What if there’s a hiccup with a trade and I need help urgently?
There’s no need to worry. Our Singapore Office has a dedicated team of Client Services professionals just for traders like you. We offer 24/5 coverage over email, chat, or call, and you’ll speak to an onshore Singapore representative.
If you’re keen on opening an account, and you’re new to CMC Invest, don’t miss the latest welcome offer
Get 1 free share when you meet the funding and trading requirements:
Tier 1 – Tesla Inc
- Fund a net deposit of S$10k
- Make min. 3 trades of S$3k each
Tier 2 – iShares Robotics and AI ETF
- Fund a net deposit of S$3k
- Make min. 2 trades
Tier 3 – iShares Global Clean Energy ETF
- Fund a net deposit of S$1k
- Make min. 2 trades
On top of that, enjoy the following benefits when you open an account:
- Live US market data
- 2 commission-free monthly trades in SG
- 5 commission-free monthly trades in US, UK, HK and CA
- Zero trading and transaction tax for HK stocks
Learn more about their welcome promotion and get started with CMC Invest today.
Disclaimer: © CMC Markets Singapore Invest Pte. Ltd.. Co. Reg. No./UEN 202217639M (“CMC Invest”). Regulated by the Monetary Authority of Singapore (CMSL No: 101320). Refer to CMC Invest website www.cmcinvest.sg for our Terms and Conditions, Risk Disclosures, Privacy Statement and other important information.
CMC Invest provides an execution-only service only. All forms of trading and investments carry risks and may not suit everyone. Losses can exceed initial investment so do ensure you have regard to your own personal needs, financial circumstances and risk tolerance, and understand the risks involved prior to dealing in any investment products. Where in doubt, seek independent professional financial advice. This advertisement has not been reviewed by the Monetary Authority of Singapore.
This post was written in collaboration with CMC Markets. While we are financially compensated by them, we nonetheless strive to maintain our editorial integrity and review products with the same objective lens. We are committed to providing the best information in order for you to make personal financial decisions with confidence. You can view our Editorial Guidelines here.