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The POEMS cash plus looks attractive but there are clauses like inactivity and quarter fees so in the long run which is better?
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Elijah Lee
06 Jun 2020
Senior Financial Services Manager at Phillip Securities (Jurong East)
Hi Rakesh,
This will depend largely on your AUM. I would say that if you can achieve the highest tier of AUM, then cash plus will make more sense when it comes to the transactional costs, since all inactivity/quarterly/dividend handling fees are waived. If not, you might be better off buying via cash management and holding your SGX shares in CDP.
However do take note that Unit Trusts do not count towards your AUM, and if your portfolio value drops in a downturn, you might drop to the 2nd
highest tier.
You will require pre-funding for cash plus before you can buy.
Do note that your stocks will be held in custody instead of SGX, which will mean that you will not be able to attend AGMs (but you can request), and that your dividends will be credited to the account, instead of direct crediting to your bank.
Lastly, do note that there is a stand by margin facility so if you utilize more than your available cash, you will activate this margin facility and interest charges will accrue.
I hope this helps you come to a decision. It's actually ok to have both accounts, since foreign shares are held in Phillip custody and trading them on cash plus is cheaper. CDP inactivity fees only start when you make your first SGX trade.
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Hi Elijah. I have about this stand by margin. Could u dive a little deeper on this as I'm clueless about it.