Complete breakdown of Fees by Unit Trust brokers
|Source: 29 Dec 2018 from respective websites of Unit trust platform websites|
For beginners, I would definitely encourage the top 3 Unit Trust platforms. The above 3 does not charge any fees for purchasing, and selling of the units. Having visited the 3 platforms, POEMs offers the largest variety of Funds as compared to the other 2. As of 1st Jan 2019, it offers up to 1512 different funds. FSM stands at 1331. While DollarDex stands at.... 966, after I removed duplicates using Excel.
If you require a multi-purpose account, FSM and POEMs will be for you. These 2 platforms offer access to other instruments too, like stocks, ETFs etc. POEMs even offer financing, where you could purchase Unit trusts, or stocks up to 3.5x your capital.
I would prefer DollarDex as I am unable to trade equities and other securities due to Company rules. DollarDex is simplest among the 3 platform, yet serves its purpose nevertheless. It suits me as it only allows direct investments in Unit Trusts.
Let's take a look at different scenarios (Fictional)
Mr Llama - Aged 30
Has a Unit Trust portfolio of $100,000 of SG equities fund of expense ratio of 1.3%
(*Expense ratio = Management fee + Any other Fund expenses)
This fund has 0% returns and he holds it for a year.
Cost: $1,300 in Fund expenses
Cost: $1,300 in Fund Expenses + $350 in Platform fees for 4 Qtrs
Has a Unit Trust portfolio of $1,000,000 of SG equities fund of expense ratio of 1.3%
Cost: $13,000 in Fund Expenses
Cost: $13,000 in Fund Expenses + $1,050 for first $300,000 of platform fees + $1,400 for next $700,000 of platform fees (for 4 Qtrs)
Based on above information, it seems morre worthwhile to purchase your unit trusts from DollarDex? Well, I would not conclude so. FSM definitely provides a more sophisticated platform, and gives good information like dividend history of each funds. It also offers an insane range of products, including insurance policies. Not forgetting that it offers rewards points too!
For a small-time investor like me, DollarDex serves its function for me. Of course, I do hop over to FSM website to obtain certain information, and does cross-referencing between the 2 websites before any Fund purchases.
I hope the above does help you in your investment journey! I will be writing more guides and insights in Unit Trust investments. Stay tuned!
Update on 18 Jan 2019
Please see below to know how much banks charge on Unit Trusts. You may be paying a 1% on purchase, however Banks generally do not charge ongoing fees.
However, trailer fees involved may be complex. For instance, DBS charges different trailer fees for different Funds. Please take note of the fine prints before any purchase.
A good thing about buying Unit Trusts from banks is that you can get to enjoy better interest rates from your Current Accounts - 360 from OCBC, DBS Multiplier account etc.
If you own $20,000 of Unit Trusts on OCBC, you can get up to 1.2% of additional interest on your 360 bank account.
Mr Llama will still prefer to save from the 1% Sales Charge though.
|Source: Llama Finance; Information derived from respective company websites|