Martin Lee @ Sg
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DBS Cuts Sales Charge for Unit Trusts

DBS has recently started taking drastic steps to gain market share in the sale of unit trusts.

They have implemented a 1% sales charge policy on the sale of any unit trusts under their platform. This rate is even more competitive than the 2% or 1.5%  found in other online unit trusts platform providers.

In fact, you can easily transact via DBS internet banking (edited: Online still shows the usual charges of 3 and 5%). A check after login to DBS internet banking shows that funds from the following fund managers can be purchased online:

  • DBS Asset Management
  • Deutsche Asset Management
  • AllianceBernstein
  • Henderson Investors Singapore
  • Legg Mason Asset Management
  • Schroders Investment Management

In addition, DBS has added 7 more days to the cooling period for anyone who buys from them. This means a total number of 14 days for the cooling off period.

I suspect that their sales have been hit pretty badly since the ban by MAS on selling of investment products through bank tellers. So now they have resorted to competing on price.

Will other financial institutions follow suit?

We have indeed come a long way since the old days where banks used to charge 5% for the sale of unit trusts. All these are positive changes for the consumers.

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11 comments
SavvyInvestor says 9 years ago

I called up DBS. The staff on the line informed me that internet banking will still show the old sales charge. However, it will show a discounted sales charge down to 1% on one of the later screens.

This maybe from a staff at the call center. But I still do not know how trustworthy is this information.

Maybe someone else can call again to confirm – 1800 111 1111 (Toll Free).

Reply
    lioninvestor says 9 years ago

    That was what I heard as well. Probably they haven’t updated the IT side of things. Might not see the need to do so since it’s supposed to be an indefinite “promotion”.

    Reply
lioninvestor says 9 years ago

I checked the online purchase again which still shows sales charge of funds at 3 and 5%.

Perhaps the 1% only applies to walk-in or selected funds. Have to reconfirm with them again.

Reply
Hindsight says 9 years ago

So, DBS has been making tons of money from their clients from the sale of units trusts in the past when they charge a 5% sale charge.

Reply
    lioninvestor says 9 years ago

    Hi Hindsight,

    Not just DBS, but all the other distributors who charge 5% upfront sales fee.

    Reply
James Tan says 9 years ago

Hi Lion,

Thanks for the info, perhaps you may not know that Dollardex.com has been selling more than 400 Unit Trusts online at 1% for many years already!

Reply
    lioninvestor says 9 years ago

    Hi James,

    Yes, I’m familiar with dollardex.

    Their entry level sales charge is 2%.

    It only reaches 1% if you reach private client status (250k in investments).

    Reply
      James Tan says 9 years ago

      Hi Lion,

      That’s very strange. My first investment with them was in 2003, when I bought S$30K of APS Alpha UT. Then in 2004, I bought $5K of UOB Gold & Gen UT.

      On both instances, I only paid 1% sales fee. So, where does the $250K requirement come from?

      Reply
        lioninvestor says 9 years ago

        Hi James,

        There could be a promotion going on for the funds you bought then.

        Their charges are here:

        http://www.dollardex.com/sg/index.cfm?current=../contents/newpricing&contentID=2637

        At the entry level, they usually charge 2% for equity funds and 1.5% for bond funds.

        Reply
Vincent Teo says 9 years ago

This is indeed a good start.

However the number of funds they carry still pale in comparison with other distributors like Fundsupermart, Dollardex or Philips Capital.

There is also no MMF (with 0% sales charge) where their customers can opt to place their money instead of the usual saving account.

Nevertheless consumers now have a new avenue for low cost unit trust investment.

Reply
    lioninvestor says 9 years ago

    Hi Vincent,

    They charge 0.2% sales fee for the DBS enhanced income fund. We are almost there. lol

    Reply
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