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Which is the best online stockbroker in the Philippine Stock Market?
In this blog, I made a short review and comparison of online stock brokers trading in the Philippines stock market.
If you’re reading this, you’ve probably read that Investing in the Philippine stock market requires the service of a stockbroker.
This is non-negotiable and opening an account with one of them is the mandatory first step for anyone wanting to buy his first share of a Philippine company.
These brokers, or more appropriately called Trading Participants, place buy and sell orders in the Philippine stock exchange on your behalf as their client. In exchange, they receive some commissions for every buy or sell transaction they match for you.
No matched order means no commission for them, and no deduction from your cash balance.
Two Types of Brokers
Before, there were only live brokers. This is the chaotic scene you’ve seen in the Wall Street movie. If you have parents or grandparents who have invested in stocks, most probably they have done it through live brokers. They would contact their broker buddy thru a phone call and tell them their desired transactions. And these people depend on their brokers’ updates and newspapers’ business pages to get the latest updates and happenings in the market.
Thanks to the internet!
The advent of technology makes almost, if not, all aspects of investing painlessly smooth.
Deviating from the traditional breathing warm-blooded brokers, we now have available brokers with an online platform and are called … hmm, online stockbrokers (gosh, I’m so brilliant!)
Online stockbrokers make investing easier for everyone.
Aside from that, they charge you much smaller commissions compared to live brokers. (That means savings for you!)
You only need your computer (or even a capable cellphone) and a fine internet connection, and boom!
You see the business world unfolding on your computer screen, in real-time and live!
You see how the market moves. You see the most recent transactions. You see all the stock prices fluctuating every minute. You see foreign money movements and how other investors are responding.
Practically all the information you need is on your screen and the option to buy or sell is with it.
More importantly, you can make money right after digesting all this info if you make the right and profitable trades.
When I started investing, I had Philstocks by Accord Capital Equities as my first broker.
No special reason though. It’s just that when I researched online brokers in the Philippines, it was the first one I read that allows potential stock market participants to begin investing with just 5000 pesos. (I shifted to COL Financial later on and opened accounts with other online brokers. Read the related story My First Time Investing.)
(You see, you don’t need a big chunk of money to actually start investing.)
But as you’ll soon know, other online stockbrokers have almost the same if not better offers.
In this post, I want to highlight COL Financial, BPI Trade, First Metro Securities, MakeTrade, BDO Securities (formerly BDO Nomura), 2TradeAsia, AAA Equities.
COL Financial(formerly Citiseconline), which is more commonly known as COL will also allow you to open a trading account with just a minimum initial amount of Php 1000.
They offer it to starters and even came up with an investing program called EIP – Easy Investment Program. The phrase may sound very fancy, but I think they just made up that term to attract small-time investors – a.k.a YOU and ME, versus those who can start with bigger capital. After all, both of them use almost exactly the same features of their online platform.
The biggest local banks we have in the Philippines also have their own sister companies doing stock brokerage business.
BPI Trade, FirstMetroSec and BDO Securities for example offer the same online brokerage service with the only requirement of opening a bank account with their counterpart bank companies – BPI, Metrobank, and BDO respectively. This bank account can then be linked to your stock trading account, allowing easy and convenient transfer of funds between the two accounts using online banking.
If you’re an OFW or one who lives in a province far from Manila or other key cities, it’s also much easier now to open a trading account since brokers have started to allow online trading account applications. This means the application can be initiated and completed all online without the need of going to their office, which is the case for other more traditional brokers.
- How to open an account ONLINE in COL Financial
- BDO Nomura Review – How to Open a Trading Account Online in Philippine Stock Market
So what broker do I have now?
I actually have accounts in all of them: COL Financial, BPI Trade, Philstocks, FirstMetroSec, AAA Equites and BDO Securities. I also have an account in MakeTrade.
COL Financial and First Metro Securities contain the bigger chunk of my current investments. I also have some in my BPI Trade linked to my BPI ATM account. I don’t have as many trades in the other three but I can check and access them anytime I want.
But mind you, I won’t recommend doing the same. I opened all of them just so I would know who’s the best of ‘em all, based on the first-hand experience I have with them.
Looking back, having one broker is enough.
Two is tolerable; say, for example, you want to have separate accounts for your long-term investments and short-term trades because you just can’t control your itch to play too/trade much.
Having three or more brokers is a meaningless exhibition. 😛 (Unless you really have your special reasons like access to several types of research, or just want your money scattered for your own personal reasons.)
How to Choose your Online Stockbroker
Having that experience using multiple online brokers, I propose the following considerations in choosing your own online broker.
1. Trading Fees
First, let us talk about fees.
The brokers mentioned above charge you almost the same commission and transaction fees. For small-value transactions, the difference ranges from a few centavos to few pesos. With an increase in the value of your purchases, this difference will also rise in value, but will still be negligible. Because of this, I suggest you make your decision not on this basis alone.
2. Convenience on the flow of funds
This equates to the convenience of moving your money to and from your stock trading account.
For many retail investors, the capital comes from their payroll accounts updated every salary period that’s why it’s practically important that there’s a hassle-free way of making your deposit and withdrawals between those two accounts.
Online brokers with their bank counterparts, namely BPI Trade, FirstMetroSec, and BDO Nomura, win in this aspect.
As previously mentioned, these brokers allow easy and almost real-time transfer of funds between your trading account and bank account through their online banking portal. As a result, you won’t need to do any manual intervention or effort except for the click-here-type-there role when moving funds in and out of the market.
It is also good to note that other brokers like COL Financial, AAA Equities, 2TradeAsia, and MakeTrade also now allow for paperless funding and withdrawal. The transfer of funds however may not be that real-time and can take a few hours unless you email them your funding activity. Normally though this becomes a non-issue if you do your funding a night before your desired trading day or hours before the market open.
3. Online Platform Features
This is an important consideration if you’re doing swift trades – or trades that happen within a day or few days. Having speculative stocks for example (or stocks with no fundamentals) crucially requires players not to be left behind by fast rallying or falling stocks.
In this kind of rapid market behavior, you would need a trading console that can show you all the relevant action – price movement, recent transactions, foreign fund entries and exits, etc; and allow easy entering of orders.
More importantly, you’d want your online stockbroker to be available online when you want to place your orders. Complaining that you can’t buy or sell stocks because of a system downtime of your online broker during market hours is the last thing you’d want to have.
Take note however that this is much less of a concern if you have a much longer time horizon for your investments; in other words, if you’re holding fundamentally great companies where price action is a lot less volatile.
In this aspect, good options are AAA Equities, COL Financial, Philstocks and FirstMetroSec, BDO Nomura, 2TradeAsia and MakeTrade.
I must also say that BPI Trade has just the most boring trading page. FirstMetroSec has also a platform quite similar to COL. It can be a good choice if you have an existing Metrobank account.
Maketrade and BDO Nomura currently use the PSETradex trading platform, designed for active traders.
Other online features and services that cater to more advanced market players can also be a factor.
For instance, AAA Equities, 2TradeAsia and First Metro Securities both have the possibility of entering conditional orders which can be used for aggressive trading strategies such as buying on breakout and auto stop loss.
MakeTrade, COL, Philstocks, FirstMetro, AAA Equities, and 2TradeAsia also have extensive tools like charting, comprehensive market research, market calendars, and similar useful content to help you guide your trade decisions. They can be useful tools if you aspire to be a skilled trader down the road.
Mutual Fund Options
Another plus for COL Financial and FirstMetroSec is the availability of Mutual Funds in their platform. This means if you open an account with either of them, you can actually buy not just stocks but also mutual funds. (Read here >> How to Invest in Philippine Mutual Funds Online)
This is practically useful for people who don’t want to do direct investing for lack of time and skills, but just want to take advantage of better-projected returns with the growing economy of the country.
4. Customer Service
This is of low priority though, given that by the very nature of online brokers, we seldom make inquiries with their representatives. This also translates to receiving quick feedback when you ask them specific questions.
But you may also want to take advantage of the free seminars they organize. Check their website for regular schedules.
Some go the extra mile to value high-profile clients.
COL Financial, for example, assigns a dedicated Account Relationship Manager if you happen to be one of its premium clients (which should have a minimum of 1M portfolio). This resource person makes sure your concerns (mostly admin) are addressed quickly. They also organize special events for this group of Premium clients from time to time. Just recently (March 2017), I was able to join their Wine Tasting event at Marco Polo Ortigas. 🙂 )
Before I give my comments, be clear that choosing a broker is not as important as choosing stocks. Ultimately, your returns on your investments will depend NOT on your broker but on you as a self-directed investor making all the right investing(trading) decisions. Your brokers’ services will at the most just give you their research but the final decision will remain in your hands.
For starters, I recommend anyone of them.
COL Financial has an EIP scheduler too you can use as your starting strategy. At any time you decide to do quick short-term trades, you can then just use the tools and research available for you. Check this tutorial how to open an account in COL Financial.
First Metro Sec is also a great option if you have a Metrobank account. They publish daily research too and have lots of insights for both investors’ and traders’ pleasure.
If you’re going to be a passive investor and have a BPI bank account, BPI Trade can be an option. They have good research available though fewer features if you’ll be an active trader.
MakeTrade and BDO Nomura as mentioned use the same trading platform and are also good for traders.
If you are after using conditional orders so you can automate your trades, you can check out 2TradeAsia and AAA Equities.
Opening a trading account is like going to a gym for a planned workout. You’re done recognizing the need to exercise, and have actually already decided to go after it. But for some petty reason, each time you attempt and try, you just feel like it’s the hardest thing to do, and you’re back to the point on the verge of going on or turning back. But once you’ve managed yourself, and entered that room with all the other people working out for their dream body, you’re suddenly back to your senses and recharge what you’ve originally wanted and desired.
In chemical kinetics terms, we call it the rate-determining step – that crucial barrier in a series of steps that when overcame paves the way for the rest of the easy smooth steps.
So I ask you back the question – What now?
Have fun investing!
PS: As I said earlier, more important than choosing your broker is choosing what stock to buy.
For those aiming for long-term investments, leveraging on “SAM – Strategic Averaging Method”, you can check out Truly Rich Club! I’ve been a member of it for twelve years and has really helped me improve my finances.
As a member, I receive regular stock updates and wealth strategies; know what and when to buy and sell, plus a mountain load of other blessings to manage and grow my finances.
Check if it’s for you here – Truly Rich Club!
PS2: I am not paid to endorse any of the mentioned online brokers. Those are all coming from my personal experience with them.
Find time to check their sites and see what best suits you.
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This Post Has 52 Comments
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I don’t want it pushed to my Email.Should TRC becomes a paid member site for their paid stuff i’ll be a member.
I don’t want to join the TrulyRichClub because of its religious bullshit, but I am really interested with the SAM tables they publish, can you post it on your blog regularly? Thanks!
I know this is more than a year old thread but I find it hilarious (and insulting at the same time) that you shun TRC for it’s religious activities but wants the SAM tables it offers and for free! Typical leecher attitude don’t you agree? There is a reason why it’s called Truly Rich Club and you my friend will never be truly rich.
For a start-up Investor, say how much would be the approximate income monthly or annually. Just base on your experience sir. 🙂 I’m actually curious.
i live in Canada and i do my investment with Col Financial. How do i deal with CRA with my foreign investment since its tax season, should i get an accountant to do it for me or is there an easy way to do it your self?
Hi Ange, better if you consult this with a professional who knows your local regulations.
Hi omeng, I don’t know if you will reply since the last activity shown was October last year. Chinese have this saying “hindi bale konti kita basta madami”. With that mindset being said, if you have enough money to buy stocks from different company, could you make it as your source of income? Because if we look at it if you are gaining some money though it is small, the sum of all of them could make a difference. What do you think? Because as what you have shown us, you have gained a little in investing in one stock. Imagine you have 5 of that could you imagine the sum?
Hi Jeff that’s true.
thing with stock market is hindi regular ang income dito. Depende na ito sa market performance.
But others look for companies with consistent history of pay out of dividends and are called income investors.
These investors invest in these dividend paying companies and get their “regular” income from dividends.
If mas marami kang shares na hawak nila, mas malaki ang dividend income mo. TEL is one of that. If you look at pay out history ni TEL, you’ll see it gives regular dividends for many years. Just be clear what purpose you have in buying a stocks – whether for growth (price appreciation) or income (from dividends).
Just to inspire us more, can you tell the results of stock ventures? total fund invested vs your current fund.