CornerTrader Questions


#1

Dear fellow mustachians,

Finally got my CornerTrader Account, i choose it because it was the safest option in my opinion (for a swiss resident who lives here). Second Option was Degiro, since it is cheap - but they are in netherland. I also considered IB, but it seems to have a clunky interface and they based London (for EU citizens, otherwise US). Somehow you have to make a choice and move forward - and i am so glad we have this forum, thanks to all the people who provide helpful infos.

So I have the account and also bought my first Shares in VT :blush:. But i have some questions about CT:

  • They are 15 Min behind the NY Stock Exchange, which is a bit uncomfy. I do not want to buy the subscription for live prices, so I just watch the price on tradingview.com and then put them into CT. How are you guys setting the prices in CT?
  • There is no “max” by button or something that can just buy as much shares for my CHF - or am i just blind?
  • For VT Shares, should I have some kind of dollar account? Or just buy and sell through CT normally? Does it matter?
  • Following the tax discussion for ETF’s, where is VT taxed in CT (in Ireland as well)?
  • What other ETF’s do you recommend in addition to VT or because they are good offers in CT?

Thanks for feedback from CT users :smiley_cat:


#2

I’m an IB user, but I also don’t have live data, I’m too cheap to pay for it. I don’t really miss it, though, I just set a price a bit below the current (old) price and hope to hit it at some point. Doesn’t really matter much when you place an order once a month or so. The tradingview.com trick is good to know, though!


#3

Can you back your opinion with some facts? I also created CT account first, because of the “Swiss magic”, but what is the problem with IB? I’m asking sincerely, if there is any reason I should fear to put money in IB, then I would like to know :thinking:

Please! Is that a serious concern? Are you a professional trader, making at least one trade per day? Or are you gonna make 1 trade per month max? How can visual aspects mean anything when the cost difference is so big? I make trades maybe even twice per year only, and I got used to WebTrader GUI, not much difference really from the CT.

but actually their office is in Zug, their phone number is also Swiss. You can pay them a visit if it calms you down :stuck_out_tongue:


#4

I am a passive, long term buy & hold investor. I am not interested in intra-day-volatility. I just buy.

I have the exact same question, actually. on IB, I always calculate the number of shares separately, which is annoying and could be automated that easily.

Back when I was at CT, USD dividens were converted int CHF, losing 0.5% in commissions. buying back USD shares with USD costs another 0.5% -> total 1% loss.
I never found out if this could be fixed. maybe a call can help: “hey guys, please let me keep dividends as forex position in the according currency!”

In US. I had VSS back then at CT, and CT had to deduct a full 30% of source tax from dividends

checkout other people’s portfolios, for example mine. however, VT on its own already is the ultimative one-fund-diversified-world-stocks-portfolio.


#6

I only investigated some factors which seemed important to me.

Safety
Degiro: Up to 20K (Law in Netherland)
CT: Up to 100K
IB: Up to 50K GBP

Inactivity is free
Degiro: yes
CT: yes
IB: no

It is just based in Switzerland, that was the main selling point - which is maybe not that strong in the end.

You are right, guess I overrated that one.

Interesting, so IB would really be worth a second look.


#7

Oh wow - that is very good to know. I didn’t even knew that I get dividends with VT (I’m such an ETF Noob :joy:). 1% is a lot - will ask them if they can change the process somehow.

Why is IB better than CT? Or why you guys prefer it?


#8

This is just for cash, so not a particularly important decision factor. Better keep the cash in your swiss bank account


#9

I actually delayed opening an IB account mainly because I couldn’t do what I wanted with the demo account and I attributed this to UI issues. It turned out the problem was really the demo account not acting like the real thing. So, yes, that’s a serious concern for at least some people.


#10

I don’t know the use cases that you were trying to test, but I tested currency exchange and ETF purchase with WebTrader and I don’t need anything else for a buy and hold strategy.

This has been a hotly debated topic if our IB accounts are protected by the American SIPC protection. But if they are, that’s 500’000 USD.


#11

Really? Cash only? That is good to know - so then it is useless for me.

Isn’t there a European Company of IB based in London that you belong to as a swiss investor? And if so are they providing this SIPC protection? Is this also only for cash?

I guess we own the shares in our ETF’s, so if something goes wrong we should receive them?!?


#12

I googled for it just to have a source and found it here: FINMA - Depositor protection

https://www.finma.ch/en/supervision/banks-and-securities-dealers/depositor-protection/

The interesting point is: Custody accounts excluded

Unlike deposits, custody account assets (e.g. shares and fund units) belong to the client. By law, they are segregated entirely (i.e. not included in the bankruptcy proceedings) and returned to the client. This is also the case with client-owned precious metals deposited physically at a bank.

So in case of Swiss broker, you shouldn’t even be bothered if it goes bankrupt, because the shares are segregated. (if I understand this correctly)

Regarding SIPC, there is this FAQ page:

https://www.sipc.org/for-investors/investor-faqs/

SIPC does not protect customers of non-SIPC member firms. If the affiliate is not itself a SIPC member, there is no SIPC protection. If the affiliate fails, or if the affiliate steals your cash or securities, you are not protected by SIPC. However, if the affiliate opens an account for you with the SIPC member firm and the SIPC member firm fails holding cash and/or securities for you, you may be eligible for SIPC protection.

So it’s still unclear to me if we are covered or not. But hey, maybe it doesn’t even matter!

https://www.interactivebrokers.com/en/index.php?f=111

Customer securities accounts at Interactive Brokers are protected up to $30 million (including up to $1 million for cash)

$30 million? For real? Can somebody verify that or has something to add?


#13

Wow! 30 Mill is a statement!


#14

Sorry for all my questions - but I really like to make an informed decision before i move the majority of our money to a broker - and your feedback is so valuable. Some information is hard to find or often only known through experience. I asked CT about depositing VT dividends on USD Forex position, will report answer here as well.

  1. Let’s assume I only buy VT at a broker. Is IB better than CT? If yes, why?

  2. Let’s think about the endgame scenario. For instance 1 Million in VT shares and you wanna retire now. Is IB better than CT? I mean you will take out some of the money with some kind of a system (What kind of system is actually a valid strategy?).


#15
  1. IB charges minimum 2 orders of magnitude less in trade commissions than CT: <0.5USD vs minimum 25$
  2. IB qualifies as “qualified intermediary”, hence deducting only 15% of dividend witholding taxes from US funds like VT. CT afaik has 30% because they dont qualify, at least one year back that was the case
  3. IB charges virtually zero in forex transaction commissions (or “adjusted” forex rates"), CT about 0.5%
  4. IB does not force to convert dividends into the account’s default currency (you may check if this practice is still used, because it may not)
  5. IB is said to have a working 2FA, where with CT some ppl claim their 2FA was useless.
  6. IB is not swiss domiciled, which for some ppl is a reason to stick with CT
  7. [added later] IB has a custody fee up to CHF 120/y if your account is below CHF 100’000. CT has zero custody fee

I would not know any reason besides those stated above

thinks like safe SWR or variable SWR come to my mind. check bogleheads on those


#16

You have always the option to transfer your securities to another broker when you retire. You need to check transfer costs (don’t know how much IB charges).


#17

Pfft… up to $150M in total for all accounts. That’s a joke compared to the scale they’re working on, tens of billions (with a B) in customer assets/payables/receivables.

That’s a pretty standard arrangement in many countries AFAIK. Securities typically are not insured, only segregated from broker’s own balance sheet. So if there’s a fraud from broker’s side and securities aren’t where they’re supposed to be when SHTF, you can still have a loss. The fact that someone’s going to jail will not make you whole, SIPC will.

There was a broker failure in not so distant past, MF Global, you can google and read how it turned out as a case study


#18

Just got an answer about depositing VT dividends on USD Forex position. They say:

It is not “thesaurierend”, so there is no automatic reinvesting of dividends. Dividends are paid in USD. It is better to buy the ETF from a USD account, to avoid the exchange costs. They provide me with USD-Konto, it is free.

  1. Cheaper is better, but not really critical I guess.
  2. That’s 50% better, which is way better. +1 for IB.
  3. Is a Forex transaction from one currency to another (USD to Dollar) or any transaction (in the same currency). Maybe +1 for IB.
  4. It seems, or they say, if I buy the ETF with USD, it will not convert.
  5. 2FA only if you ask for it, what I did. But not active right now - have to test ist, but I think this is just a MUST for an online Trading Platform and a big minus if it does not work. But something that will be addressed, I hope.
  6. If possible, yes. Better Options welcome :wink:

“Qualified intermediary” could be the game changer for me. Current dividend yield at 2.67% means 26.7k dividends per year (for 1mill shares), which means 13.35k more with IB!


#19

@hedgehog interesting stuff - so SIPC ist good for us, but kinda hard to understand where it is applied and where not.


The trustee liquidating the company said that the losses incurred by customers of MF Global stood at $1.6 billion at April 2012.[4][5] In January 2013, a judge approved a settlement that would return 93 percent of customers’ investments, with the prospect of additional payouts from the company’s general estate.[6][7] In December 2014, MF Global Holdings settled a U.S. government lawsuit, agreeing to pay $1.2 billion in restitution and a $100 million fine for customer losses tied to the company’s 2011 collapse.[8]
– from wikipedia

That is a loss of about 25% of the customers holdings. Bad, but not the worst case scenario if I understand it correctly.


#20

Err… can you be a bit less cryptic? The way I understood it is that each customer of IB is insured up to 30 million, not 30 million to share. They even write, if you’ve received SIPC (whatever that means?), then it covers the remaining 29.5 million. So how is it? What do they mean with this 30 million?

And what’s your take on SIPC? Are we covered as clients of IB UK, or not?


#21

Ok, just got this one after reading it twice! You say IB is only covering losses for 150M, but over all accounts they have? This is really a joke then.
So we do not really have a secure statement about the safety of an account!?! Can somebody (with an IB account) ask the IB support what are they paying in the “normal” worst case scenario?