Digital investment platform Syfe is launching brokerage services in the new year, the first Singaporean FinTech company to offer stockbroking in two decades.
The Singapore-headquartered company has obtained its brokerage licence from the Monetary Authority of Singapore (MAS) and will officially launch Syfe Trade on Jan 17, 2022. This comes less than two years after the company’s launch in July 2019.
Users can now join the waitlist to gain early access to the platform, with an introductory offer of five commission-free trades per month. Thereafter, Syfe will charge a flat fee of 99 US cents per trade.
After the end of 1Q2022, Syfe will offer two free trades per month and charge US$1.49 per trade thereafter, says Syfe’s partner and VP of distribution Sebastian Sieber in response to queries from The Edge Singapore.
Syfe Trade also offers fractional trading of shares, with some 10,300 US-listed names to choose from, says Dhruv Arora, founder and CEO of Syfe.
“You can buy into these companies in very small quantities, even just by dollar value; I think it is very unique,” says Arora at a media briefing on Dec 15. “This is somewhat popular in the West, but in this part of the world, it is still not very common. Last we checked, none of the established players in the region offer it, which puts us in a very good spot for people who want to build their own diversified portfolios with different sizes.”
See also: In My Portfolio: Syfe's CEO Dhruv Arora discusses his personal investments
Fractional trading can help optimise users’ investment sums, says Arora. He raises as an example shares in Amazon, which are trading at more than US$3,000. “If you have $10,000 to invest, you can only buy two full Amazon shares. But with Syfe Trade, you can actually buy 2.69 Amazon shares, making that money efficient to the last dollar.”
This is in contrast to stocks on the Singapore Exchange (SGX), which must be traded at a minimum of 100 shares, or one lot. The brokerage is currently in talks with SGX to offer trading of stocks listed on our home bourse.
See also: Syfe introduces Singapore's first customisable ETF portfolio
The potential partnership will not be foreign. Syfe’s REIT+ portfolio — which replicates the SGX’s iEdge S-Reit 20 Index — has been one of the company’s most successful robo-advisory products. Syfe’s existing services will be renamed Syfe Wealth.
The Stock Exchange of Hong Kong (HKEX) is another bourse that Syfe Trade has its sights set on, says Arora. “We will try to add it over the next few quarters. I know China has had a little bit of a rough patch in the last 12 months, but fundamentally, it's already the second-largest exchange; it probably has the potential to be the largest over the next few decades.”
Syfe Trade aims to onboard 100,000 users in Singapore within the first six months. It sees a market size of 300 million consumers in Asia Pacific ex-China, who each have a net worth of at least US$10,000.
But the newest kid on the block joins an already crowded list of brokerages here, as international names jostle to attract local retail investors dabbling in the markets for the first time.
They include the Xiaomi-backed Tiger Brokers, US-based Interactive Brokers and moomoo by Futu SG, which offers free Apple shares to new users who deposit at least $2,700.
“For far too long, the decades-old brokerage industry was in need of a major disruption with high fees and an experience laden with inefficient processes and interfaces. While there have been new entrants to the industry, we are building on the success of our wealth offering, and enhancing it further,” says Arora.
See also: Syfe drops SPH REIT from REIT+ portfolio, adds Lendlease and AIMS APAC
The move follows Syfe’s Series B announcement of US$30 million in July, led by Peter Thiel's Valar Ventures.
The company grew its customer base by 20 times in 2020, while assets under management (AUM) quadrupled in the first six months of 2021. According to Sieber, the company is looking to bring its Syfe Wealth services to Hong Kong next year.
From a previous hiring target of 200 staff by end-2022, Arora thinks Syfe's headcount will reach 250 instead. “We have 130 to 140 staff now, and we plan to add at least 100 more in the next 12 months,” says Arora in response to The Edge Singapore.
“The majority of our users are still in the 25 to 45 segment. We’ve seen an increase in users even younger than that,” said Arora to The Edge Singapore in October. “What has been interesting for us is that we’ve also seen uptake among the above-50 segment. If you look at the assets they deploy, it is twice, if not thrice, of what the [25- to 45-year-old] segment deploys.”
With Syfe Trade launching only on mobile, Arora expects more interest from Generation Z and millennials, or those aged 40 and below. “I think it'll be interesting to see where the uptake is. To be honest, after just looking at the numbers that we've had with Syfe Wealth, the reality is that the most active users are in the 30 to 40 segment.”
Photos: Syfe, Albert Chua / The Edge Singapore
