Disadvantages of Rakuten Trade

(Updated: 23 August 2019)

After using Rakuten Trade for some time, I have discovered some of its disadvantages. As it is using nominee account exclusively, Rakuten Trade is different from the main brokerage houses in Malaysia.

(I have talked about its benefits in another article.)

 

What is a nominee account?

It is a securities account opened by an authorised nominee in accordance with Bursa rules. In Rakuten Trade, the client’s CDS account is held under KIBB Nominees (Tempatan) Sdn Bhd, instead of under his or her own name. Nonetheless, the client’s name will still appear in the Bursa record in the following format:  KENANGA NOMINEES (TEMPATAN/ASING) SDN BHD RAKUTEN TRADE SDN BHD FOR [CLIENT NAME].

 

Disadvantages of Rakuten Trade

1. No initial public offering (IPO)

As with all nominee accounts, we cannot apply for IPO using this platform.

My point of view (POV): As I do not invest in IPO, its absence does not bother me.

 

2. No annual report

The annual report will be sent to KIBB Nominees, instead of the account owner.

My POV: We can easily get the annual reports from Bursa Malaysia website. So, this is not a major problem.

 

3. Extra step to attend annual general meeting (AGM)/extraordinary general meeting (EGM)

To attend these meetings, we have to send our request through email to its customer service 10 working days before the meetings.

My POV: I do not attend these meetings. If I really want to attend a meeting, I will just send the email as soon as I know the date.

 

4. Slow dividend processing

The dividend will not go directly into our bank account, i.e. no e-dividend. The dividend will only be credited into Rakuten Trade account. This process will take at least five working days. Thus, we will be getting the money at a later date than the stated dividend payment date. The platform will send an email notification once the dividend is transferred into the account. The dividend vouchers will only be provided on request.

My POV: This is definitely an issue. But as long as the money goes into my account and I can withdraw the money easily, I am fine with it.

 

5. Earlier corporate action deadline

Due to the time required by Rakuten Trade for processing, it has an earlier deadline than the company registrar.

My POV: This is also a significant issue. If we miss the deadline, it means that we have forfeited an opportunity.

 

6. Adjusted price stock chart

Thanks to ChrisYeap for pointing this out. The stock price charts on Rakuten Trade may not be the same as the price charts on Bursa Malaysia as the platform uses adjusted prices, instead of the actual traded prices. Thus, if we want to know the actual traded prices, we may need to use the charts from other websites (like Bursa or i3investor.)

My POV: Since the information is available and easily accessible elsewhere, I feel it is not a very big issue.

 

Conclusion

The above are six disadvantages of Rakuten Trade that I discovered. Nonetheless, I personally will only treat the fourth and fifth as true disadvantages. Thus, it is up to you to decide if this is a suitable trading platform for your needs. If you find it to be unsuitable, there is a plethora of brokerages for you to choose. For me, I will still use this platform.

If you have more information about the disadvantages of Rakuten Trade, do share with us in the comment section below.

 

Referral link

Below is the referral link to Rakuten Trade. As I am involved in the Rakuten Trade Educator Program, by clicking on this link, I may gain referral rewards from your registration with the platform once certain condition is met. (2022: I am not longer involved in the Educator Program).
If you think I have done a good service in explaining the topic, please click on the link below if you are interested to register. Otherwise, you can always search Rakuten Trade Malaysia with Google and register yourself.

Rakuten Trade: Link here

*You may earn 500 RT points when you open an account or other account opening rewards being offered by Rakuten Trade. You may choose only one of them.