Mention Tiger Brokers and many people may remember the bright yellow advertisements floating around social media in the past two years, saying that it would give away shares of companies like Starbucks, Apple, or Disney to new customers who sign up and fund a certain amount to their trading accounts.
Launched in February 2020, the Xiaomi-backed trading platform has seen a huge increase in its user base. Tiger Brokers (Singapore) CEO Eng Thiam Choon says the business under his charge has hit 1.77 million customer accounts as of the third quarter of 2021, which is about twice the number of accounts in the same period the year before.
And as a sign that investors are not simply using referral codes to just create accounts and leave them dormant, Tiger Brokers also saw a 185.1% increase in the number of customer accounts with deposits in 3QFY2021 compared to 3QFY2020. The company says it now has around 612,000 customers with deposits.
On Dec 3, Tiger Brokers announced that its average first-timer deposits from users in Singapore have increased to around $5,000 or above since October. This is compared to its initial deposit of $4,000 logged in its 2QFY2021 and 3QFY2021 ended June and September respectively.
It adds that it has also surpassed its guidance of 350,000 new funded accounts in Q3FY2021, slightly beating expectations with 353,300 newly- funded accounts.
Tiger Brokers’ Nasdaq-listed parent company, UP Fintech Holding, recorded a total revenue of US$60.8 million ($83 million) for their unaudited 3QFY2021 financial results ended September, which was a 59.6% increase as compared to 3QFY2020. Earnings in the same period surged from US$4.5 million in 3QFY2020 to US$20.5 million for 3QFY2021.
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The younger generation
According to Tiger Brokers, most of the growth comes from younger investors, especially millennials (typically defined as those aged 25– 40) who have turned to investing amid being cooped up at home in the ongoing pandemic. The drop in the stock markets last March had the unexpected result of attracting a new wave of investment interest from those taking advantage of the lower prices.
Subsequent surveys and studies agree with this view. For example, OCBC Bank reveals that younger millennials are investing a lot more than before, and in a wider range of investments in its financial wellness index report on Nov 2. Millennials in their 20s recorded a 22-percentage-point jump in those who have invested (86% vs 64% in 2020), the biggest change from last year compared to other age groups, according to the bank.
Such trends seem to be mirrored in Tiger Brokers’ user base, where a full 30% comprise what are defined as Gen Z investors (typically those below 24) as of October 2020.
Eng says the number of account openings by Gen Z investors increased by over 90%, with the purchase of stocks, futures and options up by at least ninefold in September 2021 as compared to the same time last year. There was a “notable interest” in stocks and options, with the trading volume of these asset classes rising by around 14 times in terms of volume from September 2020 to September 2021, he notes.
Another factor that has made Tiger Brokers attractive is how it has dealt with a common bugbear of investors: commission fees that are taken by the platform when a trade is made.
Tiger Brokers’ fee for stocks listed on the Singapore Exchange (SGX) is one of the lowest in the market. According to its website, it is charging only 0.08% per trade for SGX-listed stocks, with no minimum fee until Dec 31.
The platform also allows investors to access other popular markets with generally lower fees, such as the markets in the US, Hong Kong, UK and Australia, although fees differ for those markets.
OCBC’s report observes that digital investment platforms have upped the ante for investors with a wider range of investment options. Features like increased asset classes available for purchase, lower minimum investment amounts and more intuitive digital user journeys made investing more accessible and less intimidating for young investors.
The report also notes that although assets such as Singapore stocks and unit trusts are still the most held investment products — 47% of Singaporeans own Singapore stocks and 31% own unit trusts — investors, particularly millennials in their 20s, are increasingly going into more volatile foreign stocks and cryptocurrencies.
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Of these millennials, 35% invest in foreign stocks and 22% invest in cryptocurrencies, compared to the average Singaporean’s investment of 29% and 16% in foreign stocks and cryptocurrencies, respectively.
Eng is fully cognisant of this trend, and as such, Tiger Brokers has an eye on alternative asset classes, he says. Specifically, the company is looking at cryptocurrencies. “We are always evaluating new products and services and will want to do it right and well when the situation arises,” says Eng.
However, equities will continue to be the key focus for Tiger Brokers and its retail investors, he adds. Despite the keener interest in investing to grow their wealth, OCBC found that millennials in their 20s are not seeking professional financial advice enough, resulting in fewer of them achieving their investment targets.
Fewer millennials rely on financial advisors (30%), seminars by financial institutions (18%) and bank analysts (19%) than those who turn to online articles (61%), family and friends (52%) and YouTube (54%).
As such, Eng said Tiger Brokers has been organising seminars, posting finance-related content for various investor portfolios and age groups on blogs and as well as using what it calls “key opinion leaders” to reach its target audience.
Tiger Brokers also has an emphasis on digital marketing, using online banners, online advertorials, videos and infographics to engage investors. “More importantly, through online and offline channels, we want to help our retail investors enhance financial literacy and understand the relevant risk exposure when trading different asset classes,” Eng says.
Increasing consumer confidence
As the company looks for more investment products to offer to its customers and more markets to enter, it is not standing still, says Eng.
Its Singapore office has been established as its dual headquarters to complement the existing headquarters in Beijing, China, as well as to streamline operational efficiency. T
he Singapore office will also be Tiger Brokers’ new principal executive office. Tiger Brokers says this is intended to promote its current strategic global expansion plans and streamline the operational efficiency of the company, supported by the fact that Singaporeans already account for a “substantial and growing proportion” of its total client base.
The company is also constantly looking at its growth plans in the Southeast Asia region while awaiting the right time to expand. “We are constantly exploring opportunities presented to us as and when it arises,” says Eng.
In the meantime, he adds, Tiger Brokers will focus on strengthening its technology and offerings in Singapore in order to prepare itself to “set forth in new territories when the time for expansion comes”.
At the same time, it will be working with regulators to ensure it is aligned with regulatory requirements in each country, which will help it meet the various markets’ investment needs and demands.
On Nov 9, Tiger Brokers became the latest securities trading and clearing member for the SGX, as well as a trading member for derivatives. What exactly does this mean for investors? Eng says that the membership will help strengthen its presence amongst Singapore investors and financial institutions as a recognised and credible regulated online brokerage.
This also provides an added security layer and efficiency, which could possibly reduce the cost and risk of settling multiple transactions among multiple parties.
As such, Tiger Brokers would be able to focus on enhancing the experience for its investors — both in Singapore and overseas — while gaining a higher level of trust with institutional partners so as to onboard them onto its B2B platform.
For now, Tiger Brokers is keeping its cards close to its chest. While Eng is not able to disclose the company’s business plans ahead of time, he says that future developments at the company will be “exciting”, and assures investors that Tiger Brokers will continue to ensure it is compliant with regulatory needs, so that they can trade with ease and peace of mind.
Photo: Albert Chua/The Edge Singapore
