9 Disadvantages of Tiger Brokers

Singapore online brokerage Tiger Brokers is a popular choice among Gen Z investors with over 214,000 funded accounts (up 111% year-over-year), and total account balance reached $ 10.9B.

I will share the disadvantages of Tiger Brokers as I am evaluating an alternative to IBKR which I don't hate so far. The main disadvantages of Tiger Brokers are

  1. lack of support for the London Stock Exchange which has the cheapest Ireland domiciled ETF,
  2. Unproven track records as Tiger Brokers is still new,
  3. They make use of custodians (e.g Interactive Brokers or DBS Vickers) to 
  4. Unable to perform take-profit/stop-loss orders,
  5. Unable to send in trades before trading hours,
  6. Min fee of US$1.99/trade (compared to TD Ameritrade/Robinhood but those hide their fees elsewhere)
  7. promoting frequent trades with its lower fees for traders with over 200 orders
  8. Customer support still not perfect (but better than most) and
  9. Visual bugs or English translation issues.

(from Tigerbrokers)

1) The lack of support for the London Stock Exchange which has the cheapest Ireland domiciled ETF is a big issue for people who like to just allocate or Dollar Cost Average their portfolio into ETF. The fees of US ETF could be as high as 30% for withholding tax compared to the 15% overall fees from an Ireland-domiciled ETF.  In the long run or having a big holding, will be a significant cost you should avoid.

2) Founded in 2014, Tiger Brokers's mission to make investing more efficient for all by using next-generation technology. Many brokers end up cutting costs from all sides, causing downtime (e.g. Robinhood and IBKR) or hiding their fees in other charges (e.g. custodian fees, withdrawal fees, exchange rates). As they are still relatively new, it is hard to tell if their models are sustainable to ensure they are safe and reliable.

3) One thing I realized was they still end up using Interactive Brokers to be the custodian. Having a middleman will make me think they cannot be the cheapest option or compete with them in the long run. Nevertheless, it might be done to create more trust for people who are worried about their track record.

4) The inability to execute a buy and sell order (Take Profit or Stop Loss) in the same transaction might be killer to day traders. Assuming the current stock price is at $10.40 and you’re planning to do a buy-in IF the stock rises to $10.50 and you want to sell at $11 (Take Profit) or sell the stock at $10 to cut your losses (Stop Loss). This complicated transaction cannot be done within one single step using the Tiger Brokers interface.

5) The inability to execute any orders beyond trading hours might be an inconvenience to those who trade in a different country (e.g. Singaporean trading in US stocks). InteractiveBroker allowed it but will warn you that it will be queued. 

6) Tiger Brokers does have a low fee for trading but it isn't the lowest. The min fee of US$1.99/trade can be beaten by  TD Ameritrade/Robinhood but those hide their fees elsewhere. IBKR commissions fees are cheaper too but you must have $100,000 to bypass the $10 maintenance fees though. I doubt Tiger Brokers can be cheaper until they shift out of using IBKR as their custodian.

7) The promoting of frequent trades is not uncommon but 200 orders are on the high side I felt. I barely do 5-10 trades if the market is active and less than 2 trades a month so I definitely cannot meet this requirement and will feel unfair. 

8) The customer support is still not perfect based on others but better than most. I got my terrible share of answers from IBKR so I think Tiger Brokers is much better and useful for beginners who really want a guiding hand from their brokers and assumes they are newbies. IBKR is really tough for a starter and wants to learn a complex instrument such as options.

9) Being based in China, it is normal to have some visual bugs or English translation issues since English is not their core language. As I am Chinese too, it is much easier to understand 

Conclusion

Overall, as an IBKR user, I wouldn't change over unless I am a beginner and want a better user experience or there are great signup promotions. I don't like to change broker though as there is money involved and I can still tolerate IBKR. I did try a few brokers just for their free stocks but don't see them as a long-term solution. For Tiger Brokers, unless they moved out of IBKR, I don't see them as a viable competitor in the long run.

Author
Sky Hoon. Read Full Bio
Website Owner, Twitter-er
He has been trading since 2008. He started this blog to share the journey about option trading. He dabbled in stocks, bitcoin, ethereum (in Celsius Network), ETF (lazy Dollar Cost Averaging) and also built websites for fun. He used this as a platform to share my experiences and mistakes in trading, especially options which I just picked up.

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