“Dear Wilfred, I want to RSP into ETFs but the brokerage fee is too expensive. Can you advice me on how to do it economically? – Regards J”

 

Dear J,

To do RSP for ETFs you have some obstacles namely:

1.The brokerage fee (in percentage) is large if the investment quantum amount is small.

 

2.There is no automatic way of doing it. Due to manual involvement, I can guarantee you will fail in your RSP because you have to make decision every month. Since you will never buy anything when market crash but you could buy more when market is good, your manual RSP will definitely fail. I have a number of clients who did manual RSP on their unit trusts and everyone of them failed because of this reason.

 

3.Due to a variety of reasons, I do NOT recommend any ETFs listed on the SGX. So you are left to choose a huge number of ETFs outside SGX and considering the tax and estate implication, you could be overwhelmed by the sheer volume of information you need to digest.

I have successfully implemented RSP on ETFs for a number of my clients which I managed to overcome all of the above problems. This is done through much research. My clients pay me a separate advisory fee for doing this. 

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