It’s clear that if you want to save costs down to a penny, IB is the cheapest option, long term. Yes, you start with 20k, but I’m sure that’s not the goal, the goal is to grow.
However, if you are ready to give up on something like 100 CHF per year (I don’t have the numbers in my head, and of course it depends on the total), it would buy you a lot of simplicity to have a bank account & broker directly by PostFinance.
If you do opt for it, however, I would recommend that you buy products in CHF. If you buy VT (which is in USD), PF will apply an exchange rate that is far from ideal. If you want the minimalist solution with the fewest steps possible, go for PF and buy VWRL.CH. You will not be able to reclaim the dividend withholding tax, but it gives you an easy start and is probably a bit more reassuring.
Down the road, once you’ve got the grasp of it and once your portfolio has grown, you can run the numbers and consider switching to IB.
I’m reviving this thread because of the current GME short squeeze.
Am I the only one who is worried how safe brokers really are, given the fact that they might have to cover losses of short sellers and my shares are not in my name with them. As far as I know I there’s no way to get shares registered in your name with Interactive Brokers.
I have about 50% of my net worth at IB and I think I will move some money to another broker used by less option traders. I’m considering moving the positions to PostFinance, but continue buying new shares with IB.
I saw this interview some time ago and it makes me even more worried now than it did a few weeks ago.
The IB guy says no problem, we have enough money to cover everything, but I bet a Lehman Brothers guy would have said the same one day before everything blew up.
What’s the scenario you’re foreseeing where they cover the losses of short sellers? (short sellers need collateral, I think it’s currently 300% for GME).
Some people here want to move their ETFs once there are more than a certain amount (Cortana said 200k. I’m not sure what I’d do).
No one ever showed numbers though. I think I’d move them to SQ, since they have a cap on costs if I remember correctly.
This should be the page to read: https://www.interactivebrokers.com/en/index.php?f=14718
After 10 unknown acronyms I gave up understanding it.
I have even more % at IB and I also consider to open brokerage account at PostFinance. Additionally, I created a thread to discuss IE vs US as ETF domicile. I know you choose IE and you were one of the persons who put doubts in my head about holding US. I was almost convinced I would open PF and start buying VWRL, but today I reminded myself of the total cost.
PostFinance transaction fee 0.35% (1)
Stamp duty 0.15%
Witholding tax on VWRL 0.20% (2)
-------------------------------------
Total per transaction 0.50%
Total per year 0.20%
(1) 70 CHF per trade up to 20’000 CHF
(2) not sure about that one
At IB the fees are negligible. So, 0.8% extra cost annually. That’s massive… I don’t know if it’s reasonable to switch.
EDIT: OK I maybe mixed two things up. First three costs are transactional only, not annual. So it’s a one-off cost (ok maybe two-off cause one day you will sell). Only the withholding tax loss is annual. Chart updated.
Some kind of black swan scenario. Maybe a short squeeze with such a high surge that the collateral doesn’t cover the losses. SNB policy change, negative oil price or something else that gets out of control.
Yeah I think it would only be the costs to transfer the positions. I also have a broker in Germany. I don’t buy there and only hold VWRL there so the costs are like 1€ per month. Well worth the peace of mind for me.
I would do the same with PostFinance.
I have about 30% of NW at IB.
I have faith that it’s safe, for now. IB has $290B of client equity. There should be something left after paying out u/DeepFuckingValue and the others, so at least expecting to get something back after GMEagedon.
That’s true and important to consider. I still fear that it might be a long and maybe expensive process.
A black swan scenario could also be a fraud like wirecard, the government seizes shares or something else I would never think about.
I guess you are right all of this has a low probability, but the impact could be devastating.
It might be irrational, but I feel better to have more than one basket.
My bank account got suspended some time ago (for paying my rent!). A strange experience and a burnt child dreads the fire.
One thing to keep in mind is that there are regulations in place that your assets need to be segregated from the ib own assets, so even in case ib would go bankrupt your assets are segregated and you should be able to get them back.
Well if transferring from IB to SQ/PF is free, you can buy on IB and transfer them there every X years. VT or whatever you buy. Even if it will costs you 50chf, it’s less than the cost of buying them there.
Yes that’s what I thought as well but in the interview at 25:30 it’s stated otherwise.
There are a lot of different or even contradicting information out there. I read a interpretation somewhere that you have a claim against IB like other people as well and if they file for bankruptcy you’d have to secure your part of whatever is left like everybody else. I fear that in the worst case a court will rule and that the situation is not crystal clear. Maybe it is, but I’m not a lawyer and I don’t feel competent to judge what will happen in that case. Maybe there’s no problem at all, but I really can’t tell.
Yes that’s what I plan to do. Same for my german broker, as long as there are no transactions it’s very cheap.
The street name system is designed to withstand even a brokerage firm meltdown. When a firm faces liquidation, regulators, including the SEC and FINRA, work to ensure that customers’ securities are transferred to another firm. Keeping investments in street names can actually make the process easier because all of the documentation will be in one centralized account.
FWIW there isn’t really much alternative, at least if you’re trading (if the broker doesn’t hold the share, then you’d have very long settlements, wouldn’t be able to do margin or limit orders, etc.)
Building on this. I have an account at both IB and UBS (both current account and custody). The idea is to continue to buy VT until I can. When I am no longer comfortable to have too much money on IB (e.g around 30-40% of NW) maybe moving some to UBS.
UBS is very expensive 0.3% custody fee, however As I understand in kanton Zürich custody fees are tax deductible.
Is the above correct?
if yes, do you see some flaw in moving funds to UBS vs post finance or brokers?
does anyone know if I can move US domiciled ETFs to Swiss banks? Or only Irish, LUx and etc
Yes. The fee is tax deductible, so that brings it down to perhaps an effective charge of 0.2%, (depending on your tax rate)? But in my days of dealing with UBS they had no ceiling on custody fees, and I think that has not changed. So on, say 100’000 of assets you will pay 300 Fr with UBS, roughly 100 Fr with Swissquote, zero with Cornertrader (assuming you have activity each quarter) and zero with IB (to take just a few examples). Scale it up to, say, 1’000’000 and the corresponding figures are 3’000 , 200, 0, 0.
Not much point paying more in fees to save less in tax. Don’t do it! I ran screaming from them many years ago when I realised how much those nice free coffees and meetings with “advisors” had actually cost me.
And all that is before you even think about trading fees.
PS, I’ve just checked, and it looks like UBS custody charges up to Fr 10m of assets are 0.35%! Even worse.
The fees in SQ are capped to 50.- per trimester (holiding fee, of course not counting the purchase fee).
My numbers is 500k. Once I have more than 500k in a broker I move to the next one.
I’m also interested in finding another place to park ETFs, just in case. I’m not a big fan of the custody fees the swiss brokers charge, though, so I’m also looking for options.
I know it’s probably overkill, but I also got out of the IB Stock Yield Enhancement Program.
I would not. I do agree they have a slick app, low fees, a good features. Just try and get client services to do something. I am trying to resolve a transfer of funds with them for two months. Really awful CS agents just quote process and give no information. If you have everything with them you could find yourself in serious problems with no access to funds.
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