Choosing Swiss broker - Swissquote or TradeDirect?

Hi,

I’m still thinking if I should open the account in IB or in Switzerland. Speaking about the second option, I was thinking about Swissquote, but on Moneyland I’ve found that TradeDirect from BCV is also not bad option from the costs point of view (compared to Swissquote). Plus, they currently have a nice offer for new clients:

  • First CHF 3,000 in Swiss brokerage fees waived
  • No admin fees in 2019 and 2020
  • First CHF 250 in transfer fees refunded

Anyone has/had any experience with them?

To adress the most basic point here: Have you clearly defined what militates for a Swiss Broker? Could you write that down?

I ask this since the conditions (fees etc.) do not seem to be your highest concern. So why is the fee difference between BCV and Swissquote or BCVs offer then important?

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When I read it correctly, they wave those fees are only within the first 3 months. Otherwise the prices are overall very competitive and cheaper compare to Swissequote where I am. Give it a try, check out the platform, see if you like it. As they want to enter the Swiss market, they have be much cheaper and/or much better than the competitor - in this case probably Swissquote.

Was not able to see any account or deposit fees table or overview. Maybe I missed that?

If your main focus would be the price structure, for sure check out IB as well. Because they are even more price competitive than TradeDirect or Swissquote.

Edit: Found the deposit rates. When I remember correctly they are 1:1 the same as Swissquote - 0.1% per year (or 0,025 % quarterly)

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I’ve found this:

0.025% of the securities on deposit (minimum fee of CHF 10 and a maximum of CHF 25), plus 0.025% of any securities on deposit that are not tradable online

I think for IB is 50 CHF maximum per quarter?

What I look for, more or less is:

  1. The cheapest broker (long-term).
  2. Based in Swiss because:
  • I prefer to keep my assets here than for example in US (I’m probably reading too much of catastrophic blogs ;)).
  • I hope it will make my tax declarations easier.
  • In case of problems (?) it will make it easier also from legal point of view.
  1. Nice to have: user-friendly/easy interface/apps.
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I would recommend instead of creating a decision tree (“Swiss or not”, then “cheap or not”; two-step-decision), to decide it in one step. This makes the decision sharper: How much are you willing to pay more for swissness? I would also include fees to move your securities out, in addition to the usual suspects (currency fees, commissions, depot fee, Swiss stamp duty, higher spreads, TER of the funds available, withholding tax, etc.).

I will give you now my feedback to your reasons. Feel free to ignore it. :blush:

  1. Location of assets
    This is not very defined. What exactly do you fear?

IB keeps the assets for european clients with IB UK. The regulatory agency FCA does not have a worse reputation than the Swiss Finma.
If you buy US funds, then you are possibly subject to US inheritance tax (and a duty to file a declaration after your demise) no matter if the broker is a Swiss one or not. Swiss ones, when not qualified intermediaries, might rat you out or not. However …

  1. Tax declaration
    … is for US funds much harder without a qualified intermediary. You either lose 15% withholding tax on dividends (also with irish etf) or you file a partial US return.
    For Swiss taxes, it’s not much more complicated. You fill it all in Wertschriftenverzeichnis or for US assets in DA-1 (a different sheet).

  2. Legal point of view
    Believe me, it’s not easier in Switzerland. Will give reasons if requested.

  3. Interface
    There is a whole thread about this. IB does have several interfaces.

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I strongly recommend avoiding Swissquote. Trying to open an account with them took several months, at which point I decided they absolutely can’t be trusted with my money and abandoned the attempt. I made multiple calls to their customer support, and was promtly sending them any requested documents, only to be told they will get back to me in a few days, and then they ignored me until I call again a few weeks later.
It is true that I was upfront with them that a lot of my wealth is crypto related, and I understand that this can take some additional time for KYC. But not being able to either approve or reject my application for many months and not returning my calls? Incompetence, very crypto unfriendly, bad customer support.
I have never tried TradeDirect, but I am a happy IB user - no problems so far with them.

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It is easy to do W8-BEN on IB. There is an guide in this forum.
Swissquote never answered when I asked about W8-BEN

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Wow, I truly have the opposite experience in… actually all your point! Account opening? - instantly on their website. Had several contact with the client support e.g. for the “Aktienregister” and during the call I already received the email with the form. After I signed it, 2 day later I was able to add my Swiss equities to the registration for Annual General Meeting on web. Interesting how different the experience might be.

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With swissquote I had 0 issues. They even gave me a nice ballpoint pen. :slight_smile:
I did it at their offices,though.

Maybe you didn’t tell them during account opening that you intend to deposit funds coming from crypto exchanges?
Or maybe it was personal in my case, I wouldn’t be surprised if some decision maker at Swissquote just hates the particular altcoin I am associated with (which is not BTC or any of the top 10)… anyway, they made it clear they don’t want my business.
Back on topic, how about Strateo, for those already using IB but looking for a Swiss brokerage too?

I have no experience with TradeDirect but I have a lot of experience with Swissquote.
To me the offer of TradeDirect is in line with the offer of Swissquote.
Admin Fees + Trading platform: TradeDirect: CHF 250, Swissquote: CHF 200
Brokerage fees: Roughly 0.3% to 0.5% depending where you are in the stepping of the fees at both places.
Swissquote has a strong advantage with the ~ CHF 10 brokerage fees on sponsored ETF. (Blackrock, Vanguard, UBS, Comstage, Amundi…).
The free admin fees in 2019 and 2020 is an half argument (2019 is almost gone) .
I see the offer of TradeDirect as a tentative of BCV to catch a part of the market within a traditional bank while SwissQuote is more an disruptive company that came out of nowhere.
For me SwissQuote remains the winner because of its commitment, reactivity and willingness to change the market.

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If I remember correctly the W8-BEN is automatically proposed to you on IB when you join. The funny thing is that even at Raiffeisen they made me sign a W8-BEN eventhought I wasn’t there to invest. Why would Swissquote not offer it ?!? Are they crazy?

I highly doubt they give even a little bit of a fuck about whatever altcoin you are associated with. If I had to guess, your request was non standard enough that it was not able to go through the automated process and had to go through human bureaucracy.

Never attribute to malice that which is adequately explained by stupidity(/bureaucracy) - Hanlon’s razor (slightly modified)

I am surprised by your experience. I would like to offer a counter-example : it took me less than a day to open the account. Same experience for my wife. Support has been proactive and efficient since then.

Thank you for all the replies and opinions! I see that number of people using Swissquote is not as small as I expected on this forum. I think I’ll forget about TradeDirect and will take final decision between IB and Swissquote only.

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Be aware that when your money is coming from crypto, you will get flagged as a tax/compliance risk. When your money is coming from Coinbase or other exchanges withing the US, you get flagged as a risk. Crypto’s are still in a grey area and the natural enemy of especially US banks. And no sane financial company want to get in conflict with the US under all circumstances. Bank’s compliance rules are super clear on that. If you want to trade with cryptos, go to SQ or other banks worldwide who offers you a trading platform. Of course then you can not transfer it to any ledger at all, it will stay with the bank.

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