iFast Corporation Ltd Might Be Looking to Rock the Stockbroking Boat with FSMOne

iFast Corporation Ltd  (SGX: AIY) announced its entry into the Singapore stock broking market last Thursday – only for an unfortunate twist to happen shortly after.

The investment products distributor had introduced a new account, called FSMOne, that enables its customers to access multiple products with just one account. These products include funds and unit trusts, the FSM MAPS (My Assisted Portfolio Solution), bonds, stocks, exchange traded funds (ETFs), and even insurance products.

FSMOne is actually throwing down the gauntlet at the stockbroking world by offering a low transaction fee of 0.12% (for stocks) and 0.08% (for ETFs) with a minimum trading fee of just S$10. This initially applied to both the Singapore stock market and Hong Kong stock market.

But on Friday – and that is the unfortunate twist – FSMOne stopped providing access to the Singapore stock market “until further notice” in what looks to be a dispute with its appointed counter party, the stock broking arm of Oversea-Chinese Banking Corp Limited (SGX: O39), OCBC Securities.

A different take

iFast had previously said that it will be launching a stockbroking service by the end of this year or early next year. To add to that, the company’s chief executive Lim Chung Chun had promised a new approach.

During a recent earnings briefing for the second-quarter of 2016, Lim said:

“Stockbroking business is generally seen as a business whereby the margins are under pressure. And I suppose not everybody understands the strategy that we are trying to implement for the stock broking business.

Essentially, the strategy that we are looking is to have is a bit different from most stock broking firms.”

iFast’s long-term goal is to be an integrated investment products distribution platform. During the same briefing, Lim also said:

“In terms of business model, we are not really looking at a transactional model, the way that most stockbroking firms have in Asia as a business model. What we feel that is actually important is to provide an integrated platform that allows us aggregate the assets.”

In this sense, FSMOne is big step in that direction, despite the setback seen with the stoppage of trading in Singapore stocks. Investors will have to see what else the platform will offer in the future.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.