Interactive Brokers - all eggs in one basket?


#1

Hello.

after reading here and all over the net for months it seems to me that IB is the best.

But would you put all your money there? All eggs in one basket?

Fact is, I tried to find other ‘baskets’ but I didn’t find any with the same advantages (fees and reliability).

So my dilemma is: just to honor the above motto should I choose at least another online broker even if I don’t trust it as IB?

Consider that I’m retired and so all my future chance of income would be there…

Thank you


Interactive Brokers inbound transfer position (from Swissquote)
#2

IB is best, but I like the idea of more than 1 basket too!
Why not Postfinance? It’s not that bad fee-wise for buy and hold of relatively big amounts spread over a few ETF’s. Cost = CHF 90 per year which counts as trading credits. Trading is not cheap, but for limited trading it should be ok. Do your trading on IB if u want to be more active, and keep Pf for the long-term stuff.


#3

Why PostFinance all of a sudden? What is the advantage of PostFinance over CornerTrader?

I already got my portfolio split over IB & CT. I guess eventually when I reach FIRE, I would consider a following split (the percentages may not be exact):

  • 25% VTI at IB
  • 25% VXUS at Schwab/Degiro?
  • 10% VEUR at CT
  • 25% real estate (maybe a mortgage on a flat)
  • 15% cash

#4

For me already now, and probably even more the older I get, the less logins, passwords and procedures to remember the better.
Postfinance combines a current account (with bank cards, LSV and bill paying possibilities) with a reasonably priced broker n safekeeping services. If your portfolio is CHF 100’000 u will pay less than 0.1% fee.
Where will u keep the 15% cash? What will u pay your bills with. Additional bank relations to keep tabs on.
Pf is Swiss-based and somehow still part of Die Post (as solid as it gets although ties are being cut more and more) and for me trustworthier than Degiro & CT for a while still.
That’s why, at this time, for me, at least.


#5

I totally get you. When I was beginning with investing I first considered PostFinance. It’s feels super easy to have a bank account and trading all in one.

But then I calculated, that if I want to reach FIRE, I will probably need to purchase shares for 1’000’000 CHF and then probably sell a similar amount over the course of the rest of my life. PostFinance fees are like 0.3% of the transaction value + stamp duty 0.15% thats 0.45%. Since you pay it when you buy and sell, that makes it’s 0.9%. And that’s not including compounding!

Over the course of a lifetime, I guess sticking with PostFinance instead of IB could cost about a month longer of your work to reach FIRE in order to close that fees gap. Is it worth it? I don’t know, I’m starting to think that maybe it is, at least for some people.

By the way: have we reached consensus of how the US withholding tax for a broker like PostFinance works if you hold VTI? Are you worse off than IB or not? Edit: I also forgot that if you want to buy VTI with PF, you need to convert CHF to USD. Another cost.


#6

My plan is to split everything into:

  • 2 x IB (one for me, one for my wife)
  • 2 x VIAC
  • 2 x CT

In all three I’m planning to invest in global market ETFs. For IB it’s VT ETF in USD, for VIAC it’s Global 100 in CHF, and for CT it’s Vanguard ETFs at SIX in CHF. 80% of my investments will go into two IB accounts, rest into VIAC and CT accounts.

It’s too early for this for me anyway, but at some point I’ll start implementing this plan.


#7

Very interesting discussion thread. I have been thinking as well regarding separating my etfs into different baskets. I currently have my stock portfolio with Interactive Brokers. As transaction fees with Swiss brokers are very high, I was thinking to continue buying etfs with IB where transaction fees are low, but then transfer some of the etfs on regular basis to Postfinance (perhaps annual). I asked Postfinance about fees for incoming titles, but they could not really answer. Does anybody here know about transfer fees (IB to Swiss broker, ideally Postfinance)? Many thanks and regards!


#8

Usually brokers apply fees only for outgoing securities. Incoming are free as they want to encourage you to transfer securities to them, so they can later apply deposit management fees (usually a fraction of the portfolio).
This said, you’ll have to check for your particular case.


#9

You should start with 5 VIAC Portfolios right away. It doesn’t cost anything and gives you more flexibility for tax deductions should you retire in Switzerland.


#10

How come? And does it make any difference if I won’t retire in Switzerland?


#11

You can take out third pillar funds starting 5 years prior to AHV retirement age.
You can only take out whole “baskets”.
By taking out 5 smaller chunks instead of one big chunk you save taxes because of the progressive tax (tax deductions was the wrong word, oops).

I believe if you retire elsewhere it doesn’t matter because you kind of have to withdraw everything at once, but I’m not sure about that.


#12

I’ve transferred shares from another CH-based broker to Postfinance & this was free on the Pf side. Sorry, I know this wasn’t your question. Indeed, it wud be interesting to know… Does an international transfer incur fees somewhere incoming side, at least the stamp duty I would imagine, else the tax man is losing out!


#13

And now you won’t be able to transfer them out anywhere without coughing up a fat commission for sale/transfer to postfinance.

Depends on broker

You’re imagining wrong, stamp duty is charged on sales


#14

Sorry I am late on this thread and the discussion has moved on, but

For which scenarios you need another broker than IB? I mean, what do you imagine could happen to my securities at IB?


#15

Well, as I’ve been reading all over to choose ETFs instead of single stocks so to fragment your risks, same should be for the broker you choose. If there wouldn’t be risks, why would they give IB a rating? (If not you could follow Buffett: “Keep all your eggs in one basket, but watch that basket closely.”)

For example as a total ignorant I was wandering about the effects of Brexit on the IB London account.

Also I’ve read in this forum that is the broker who owns the securities:

Or about what could happen to your cash:


#16

@hedgehog , I transferred those shares to Pf 4-5 years ago, long before I had even heard about IB. Yes, I will pay about CHF 100 fees to sell in about 20 years. I can live with that.
Swiss Stamp Duty (I translated it from Stempelsteuer or Transaktionssteuer) is charged equally when buying and selling shares in Switzerland (0.1 for CH shares, 0.15% for foreign shares). That’s why I wud imagine it a loophole to transfer shares from IB to Postfinance and thereby avoid the Swiss Stamp Duty (which is a relic from the First World War btw) and the tax man don’t like loopholes (nor people using them).


The Pillar 3a Tutorial
#17

What if they’d suddenly decide to jerk you around for some compliance nonsense? Happens at banks sometimes, can take months, even years to resolve during which time your money is locked down, and you’d have to find some other means to survive


#18

Hi, I found this site useful for comparing online brokers, in particular the section about ‘INVESTOR PROTECTION’.
https://brokerchooser.com/blog/best-trading-platform-for-europeans


#20

Another informative reading about risks with online brokers (i found it while browsing about IB “street name”) How safe are stock broker nominee accounts?


#21

All brokers keep your securities “in the street name” at least in the US, that’s how modern electronic finance works

Unless you got a few B’s to join an elite club like this and deal with a central securities depository directly