Tiger Brokers is among a young crop of mobile-first, digital-only securities brokers that have made gains among individual investors around the region. Now Tiger Brokers (Singapore) is aiming to use its proprietary technology to create partnerships with financial advisors and other finance businesses.
Singapore is one of the most recent markets for Tiger Brokers, which is a trading name under China-based parent company UP Fintech. With better-than-expected take-up by consumers, Henry Toh, CFO of the Singapore business, is positioning the firm to cater to financial advisors, family offices, and external asset managers serving institutional investors.
“In the next year or two, I want us to go from being an online stockbroker to becoming an all-encompassing wealth-management platform,” Toh told DigFin. “We have confidence in our own technology.”
When B2C isn’t enough
Toh helped set up the Singapore business in 2018, which went live in 2019. He says the team planned for 5,000 active users by the end of 2020, but it ended the year with 70,000 customers.
But that kind of scale isn’t enough. “The reality is that brokers are racing to zero on commissions,” Toh said. “So what do we do?”
The answer is to find products that make customers stick around, and then find ways to charge fees for value-added services. That could be for Tiger’s own retail customers – and it can be creating technology-based solutions to help other wealth management businesses do the same.
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He assembled an institutional team and has begun building relationships. For now Tiger is building bespoke solutions for partners, although in time these building blocks should cohere around a handful of similar services, which would enable the firm to scale its B2B endeavors.
The firm has made public two such relationships. One is with a financial advisory firm, SingCapital. It’s providing SingCapital with portfolio and risk management tools built on the back of Tiger Trade, its consumer business which now caters to over 300,000 users. The goal is to enable fund managers and professional advisors to manage accounts and facilitate seamless investing.
Tiger is also working with PropNex Realty, Singapore’s largest listed real-estate agency, to turn its customer base into an investment community. Tiger is contributing up to S$240 worth of PropNex stock vouchers to participants who sign up with Tiger Broker’s trading platform.
Toh’s longer term goal is flow: Tiger is, after all, a brokerage. He wants to provide dealing for B2B parties. But to get there, he’s learning how to use Tiger’s in-house tech team to solve a client’s problems. Once a productive relationship is in place, Toh hopes to win trading business.
He believes there is plenty of space to build such partnerships in Singapore. Financial advisors, he notes, tend to focus on advising and selling retail investors on unit trusts, whereas customers will go to a local broker if they just want to trade stocks.
Tiger is therefore offering to integrate its stock-trading app tools so a financial advisor could offer mobile brokerage alongside their range of funds. Or it could enable a local distributor’s customers trade U.S. and other non-Singapore stocks directly.
Other value-added services include custody, portfolio management services such as reconciliation, and reporting.
Tiger has worked with one financial advisory firm that was struggling to place ETF orders; Tiger built a system to help the client price ETFs based on the underlying basket of securities’ performance. It found a discrepancy between this and the quoted price of the ETF. Its partner now has visibility into how Wall Street prices an ETF versus what’s quoted to small customers.
From broker to vendor
All of these ideas require API integrations. Because Tiger has an in-house tech team, the firm can allocate such projects without incurring additional headcount, and it can execute quickly.
Toh is also dangling the prospect of leveraging Tiger Brokers’ consumer base as a potential lure. “How do we make our Singapore user base aware of your business?” he suggested.
Tiger has its own product limitations, however. In Singapore, it doesn’t yet have the capacity to trade in fixed income. Nor is it the only game in town: traditional brokers such as CGS-CIMB, Philips, and UOB Kay Hian also engage in B2B businesses.
Toh asserts Tiger has better tech and because it’s new to the market, it is building more tailored solutions. “Those other brokers are just selling their dealing service,” he said.
Nor does he envisage Tiger straying from its roots. He says he won’t attempt to become a robo-advisor, for example. He’d rather partner with them.
Tiger’s New Zealand office has also dabbled in B2B services, but Toh says Singapore is the real testing ground. If this business model works, he will export it to Australia and New Zealand, as those are the markets that fold under Tiger Brokers Singapore’s organizational structure.