What kind of account would you personally recommend - CDP or Custodian account? And why?

Hello,

You might want to consider if the Custodian account can save you any trading fees. Like for example Phillip (POEMS) Cash Plus account is a custodian account with very competitive trading fees. However, if you buy with this type of account, you will need to either sell using the same account or apply to transfer out (usually at a small fee) the stocks if you wish to sell using another account.

Therefore, you may consider keep with CDP if you prefer to have a few trading accounts with different brokerage firm. For this case, you can trade Singapore stocks using the different accounts and not worry about having to buy and sell from the same account. For this case, Phillip (POEMs) Cash Management account will work better.

Feel free to contact me for more details. I will try my best to help you. 😊

Benson Ng

Phillip Wealth Advisory

Sincere, Honest & Professional​​​

Hi anon,

If you're into income investing, CDP as a custodian is a good option. You'll have DCS for your dividends and CDP holds all your SG shares.

However, pretty much all CDP linked accounts will tend to have higher brokerage costs; the risk is on the broker as the client can just trade and then not pay up, declaring bankrupcy and putting the burden on the broker (yes, this has happened before). So higher brokerage fees compensate the higher risk.

For a custodian account, as your holding are kept with the broker, there is more control in a sense and brokerage tends to be lower. However do take note of various underlying fees such as custody charges for foreign shares, corporate handling charges, etc. Some types of custodian accounts may waive this for large assets under custody, which will then give an edge to custodian accounts.

You can actually open both types first (no harm) and decide which one you will focus on later.