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What is the difference between Regular Shares Savings Plans vs normal brokerage account like DBS Vickers??
When I told my colleague that I am investing in Nikko AM STI ETF using OCBC BCIP, he told me that I'm not buying the actual stock and owning the stock, unlike buying it using DBS Vickers.
Is this true? And what is the differenc between them? My goal is to earn from dividends, so I am not sure what the actual difference is.
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Gabriel Tham
25 Jul 2019
Tag Team Member at Kenichi Tag Team
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- Regular savings plan have lower front and back loading fee more suitable for DCA.
- Regular savngs plan have more limited stock options to choose from (presumably "safer" stocks).
- You do not technically "own" the stock but a unit of it when you buy stocks using regular savings plan.
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I think I know what your friend is saying here.
The difference here is that using OCBC BCIP, your shares are stored in custodian with the bank instead of CDP. Meaning the bank looks after the shares for you. It does not mean you do not own them. You are still the legal owner.
Using a normal brokerage linked to CDP, your shares are stored in CDP under your name. CDP is just another custodian for shares.
The main difference is that you can "customize" CDP, change dividend crediting accounts, add joint account owner. CDP also allows you to attend AGM, receive annual reports.