Broker strategy for FI/RE stage

Investing / Brokers
1

I have to start planning the proper setup for the retirement stage. We all know how to handle proper saving but does anything change after retirement? How would you go about your principal when pulling the trigger?

  • Would you split your investments over different brokers? I.e. one could have a four fund portfolio strategy and have one broker per fund to minimise risks. Would that make sense?
  • If you live in Switzerland, would you even consider brokers that are not purely Swiss? Degiro and IB seem to be very fee-efficient… but isn’t there a risk in them not really following the Swiss jurisdiction?

I am really curious as of how you would go about it. There is no right or wrong answer… but maybe some good ideas. I think the biggest difference between pre- and post-fi/re is that you don’t necessarily have an income stream from work and solely depend on your capital to be accessible and properly invested.

2

I did ask something similar here:
https://forum.mustachianpost.com/t/portfolio-after-retirement/

3

Kinda. I saw your post but I am more interested in the brokers to use… in the thread you link to the topic is more on asset allocations. Which is absolutely important as well!

4

Why would the broker change after retirement (unless you move somewhere, where you need a different one)?

Also is the Swiss jurisdiction not a risk too?

5

That’s exactly what I am asking :slight_smile:

Are there any differences? How would you approach such a situation?

6

Hi Fork,

Here is my plan with regards to brokers when I start living off the passive income (in 5/10y hopefully):

  • Diversify across jurisdictions & brokers (e.g. Switzerland, EU, US, Singapore?, Hong-Kong?) with a preference to the ones with stable laws, local language I can speak etc.
  • If possible open a Vanguard account or invest directly with them (without a broker).
  • If possible switch to a federal/canton backed broker/bank in the Swiss jurisdiction (e.g. PostFinance/ZKB might qualify)
  • Avoid brokers that don’t have their clients’ best interests [Degiro][TD Ameritrade]
  • If living off the dividends/interests, consider brokers that may look expensive for buying/selling but that are relatively cheap for holding, collecting and transferring the generated income.
  • Make partial security transfers between them initially and also from time to time to verify I can leave any of them with ease.
  • If not too expensive, avoid selling, wiring money, then buying again to make tax reporting simpler.
  • Use Interactive brokers for currency exchange between them.
  • Before alzheimer finds me or the jurisdiction of my residency gets interested in my heirloom, simplify everything and transfer assets progressively to my heirs or to a trust.
  • Document how to access my accounts to my heirs and let them know where to find it.

And you, how would you do it?

7

All good points.

I would probably diversify into four brokers and one current account. The latter, as you say, at a backed federal or cantonal bank. However I don’t see the need to have a federal / canton backed broker as I assume one owns the funds even if the broker goes bust (that depends on the type of brokerage account though).
I would also think about the trust for inheritance purposes.

Rebalancing would happen through withdrawing from those accounts that are off-balance. I would do a withdrawal every quarter and transfer the funds to the current account.

Everything monitored by a quarterly Excel and chart that shows an inflation corrected chart of the assets, and a few curves that show where the assets should be assuming 3.25%, 3.5%, 3.75% and 4% SWR.

But then again, I don’t have a full plan yet, that’s why I am grateful for your inputs!

8

I suggest you to post that link about Degiro on the thread about them.

9

I agree on the second part and I still see the need. My though was that if a broker is insured by a government/state, it is the last one you expect to go bust which means you can likely take a bit more risks when selecting the other brokers.
If a less trustable/stable broker goes bust, you have your more solid broker where you can transfer the recovered securities.
It’s all theory of course :slight_smile: and increases the convolution of managing a portfolio.