OCBC has launched a regular investment plan, OCBC Blue Chip Investment Plan (BCIP).
The plan allows retail investors to purchase stocks for as little as S$100 a month. You can now choose from a selection of 19 mainboard-listed stocks and one Straits Times Index exchange-traded fund (ETF).
Investors can also tap into various sources of funds to invest, that includes
- Central Provident Fund (CPF)
- Supplementary Retirement Scheme (SRS) accounts
The plan saves first-time investors the hassle of opening securities trading and Central Depository (CDP) accounts by buying the stocks on their behalf on a pre-determined date every month. But that also means the investors are not the real shareholders of the company and have no voting rights.
I’ve taken a look at the charge, it is 0.30% of gross investment amount (or sale proceeds) or S$5 per counter, whichever is higher. If you really invest $100 per month, the commission works out to be 5% which becomes quite expensive.
Investors should also take note of how the transaction price is determined. from OCBC’s FAQ, it says the following:
How is the Average Purchase Price of the share determined?
On the Purchase Date, we aggregate the orders of all customers to purchase the shares. The Average Price is calculated by dividing the total cost of purchasing the shares by the total quantity of shares purchased. All customers who purchase the same share counter will be charged the same average purchase price.
Nevertheless, I think this plan is a good start for the industry as most retail investors will more likely benefit from the regular accumulation of Singapore blue chip stocks than buying some “hot” investment products. It seems OCBC allows you to transfer your shares to your CDP account or other financial institutions in the future.