Good on you, and congratulations on achieving this. I hope you will be able to keep it up.
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Fair enough 
I’m “undiversified” on the broker level, as well, for now. I read a bit in this thread and the other one focusing on security at IB and wonder about 2 things I didn’t see adressed.
Based on that, that’s well into 8-digits territory. Do you actually still care about those fees by then? You do mention you do, yet don’t in the footnote. Where or how do you draw the line?
Out of curiosity, when it comes to cyber security, you did comment on that topic in the other thread: Do big banks or brokers actually develop their MFA devices or apps themselves and is there any difference? I mean technical, I guess the regulatory side is not too different. Or is it rather some specialized companies, so it’s eventually the same level of security?
I just imagine IB has a lot more in-house experience and resources then the Swiss online brokers, or traditional banks.
And if someone gets hold of your 100 character strong password and access to MFA device for one broker, what’s stopping them from impersonating your voice on the phone or also login to your 2nd or 3rd broker?
It’s probably coming back to “no simple answer”, but I would be interested in your take.
Thanks for sharing your experience. And I agree with you, if costs start adding up, people’s perspectives also change
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Wonderful thread and discussion. From what I understand, the cheapest place to buy and sell is IB.
The cheapest place to hold is IB or other brokers for no custody fee (or small fixed fee like PF? etc.) AUM based custody fee brokers turn more expensive as portfolio size increases.
A middle of the path option seems to use IB to buy and periodically move chunks to other brokers to hold assets there. Best suited are assets with low dividend or no dividend distribution (accumulating UCITS), and those that one intends to not sell for a long time. The goal is to minimise custody + trading costs at these brokers.
Here is a post from 5 years ago. May need some updates for current costs.
For those who use the above or Degiro or the many (no-custody fee) German broker, how have your experience been transferring from IB and holding assets there : both US domiciled ETFs and UCITS.
Which CH/EU brokers are definitely ‘Qualified Intermediaries’? I.e fill in W8-BEN so that WHT loss of US domiciled ETFs can be brought down to 0.
PS: there is a new accumulating UCITS funds Xtrackers MSCI World ex USA UCITS ETF (IE0006WW1TQ4) with TER of 0.15% only. Something better suited for holding in an alternative broker to IB, while holding stuff like VTI , etc in IB.
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IB to PF is pretty straighforward (US securities, but except similar for non US). Reverse seems a bit more painful (have to send them a form), but I also expect it to work.
Note that the PF fee is a quaterly trading credit.
PF/SQ should be fine with DA-1 reporting. (iirc according to them they don’t need an explicit W8-BEN, since they know you’re swiss resident, but you can still send them the form), though I can’t confirm yet it works as expected since I haven’t received my 2023 return back.
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Please let us know if you are able to get the full 15% back. I’m interested also in moving some positions over from IBKR for positions where I do not plan to add any funding anymore like PM for example and some UK-positions where I get the dividend in as a corporate action being a stock dividend.
Nah, you’d already pay an additional CHF 1000 custody fee for a NAV of 3’330’000 (=1000/(4*0.0075%)).
It’s a gut feel line for me.
I’m (mostly) fine paying a flat CHF 200 fee per year for SQ’s custody. That’s a flat 2k in 10 years. I get a second broker for that fee and in case IBKR goes belly up, I’ll still have a steady cash flow coming from SQ until my assets at IBKR are moved to a new broker.
I’m not fine paying an additional (and growing) 1k+ per year at SQ. That’s an additional (at least) 10k in 10 years.
10k is a nice sum. Even if I was worth 8 figures. 10k could
- be two first class return trips with Swiss from Zurich to, say, San Francisco
- turn into maybe 13k if I instead invest 1000 every year
- be a my personal contribution to Marc Bürki’s (Swissquote CEO) 1 million plus salary
I prefer options 1 and 2 to option 3. 
I have no recent experience* with this (except for B2B), but I’d be willing to bet that it’s mostly the usual set of 3rd party experts that design and develop MFA solutions (in Switzerland Crealogix is a big player) — and I’d even claim that this is probably a good thing since typically you won’t find the hottest IT talent at banks (no offense, there’s exceptions, of course).
At best, operations of these solutions is done in house, though it’s often moved off shore.
That said, I really don’t think you’re a target, and as long as you apply common sense, you’ll be fine.
You don’t have to outrun the bear, just outrun the unfortunate victims that more easily fall pray to fraud.
The attackers will go after the easy targets first, and there will always be a good amount of those.
* My actual experience with this goes back about two decades.
Retail Banking Experience 1
- large Swiss bank that was swallowed by another large bank about a year ago
- MFA security** and in fact the entire front-end application was developed and maintained by a 3rd party. Only operations was done in-house.
- (the entire backend was developed and run in house)
Retail Banking Experience 2
- large Swiss private bank
- first e-banking project of that bank, they flew in a team of about 100 consultants (Arthur Anderson (AA) of Enron fame — does anyone remember them?)
- AA wrote the middle layer between the banking backend (mainframes) and chose RSA as the MFA mechanism to authenticate at the front end, but was unable to integrate their middle layer with the RSA authentication stack
- Enter yours truly, young gun at the time, writes a Perl-based prototype add-on to an Apache reverse proxy in order to handle RSA authentication for the e-banking application
For lack of an alternative by AA and launch deadline pressure, my prototype becomes The Thing™, gets security audited (again by a 3rd party) and handles authentication for that e-banking solution for many years to come.
I have so many war stories on this … <insert Blade Runner I’ve-seen-things meme here>
B2B Banking Experience(s)
It’s mostly duct tape and chewing gum, even today, i.e.
- scripts mostly initially written by 3rd parties talking to bank sftp servers, in advanced cases using key based SSH authentication, but the username/password combos still exist
- applications talking to Bloomberg’s order interfaces via stunnel, an OSS establishing and providing a TLS secured channel
- “messages” transported are as advanced as SWIFT Message Types (MT, standardized in the early 90s) or as low key as CSV
** State of the art at the time (no smartphones yet) was physical RSA tokens although one large bank (the remaining one) offered a custom device with personal smartcards for their clients. Pretty sure the custom device was also 3rd party developed and manufactured.
Oh, and in case you haven’t heard, RSA was also hacked a while back.
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Oh, I missed the «per quarter”. Confusing. I agree,though, even with the typical middle-class 7-digits (edit: I assume I can skip an smiley) , these fees sum up and are difficult to justify especially when it’s online vs. online.
Thanks a lot for your insights, I’ll read more about the topic and the industry. Personally, I’m not too concerned about it, it’s more out of interest.
I do remember the RSA tokens from my first jobs, but they disappeared some 10 years ago.
For me, IB is the last physical device standing for online services, everything is else is some app or SMS code.
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Touché!
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What are your finpension strategy? What do guys chose?
Has anyone made calculations where it is best to invest? Yuh, neon or finpension?
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Interactive Brokers 
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IBKR obviously, but after it Neon is still better then any other one no?
Why I don’t want to invest on IB:
So I have vanguard world VT. Every quarter you receive dividends.
I invest every few months for about 500CHF. The dividends you receive, you have to invest again for the Zinseszins effect.
Problem: when you don’t invest regularly, the dividends just stay in Ib as Cash.
Isn’t it better to use Neon or finpension, where you can set a Sparplan?
So you could invest right after you receive the dividends in March, June, September and December
Sparplan is also possible at IBKR by the way.
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It would depend on what you want to do. If you can define your needs, it can help in recommendation
For example -: do you want to buy a world ETF every month ? Or something else ?
I understand you don’t want IBKR because you are looking for a Swiss alternate perhaps
I didn’t want all eggs in one basket so had 2 brokers. But when 2020 crash came and I had margin, I put everything into IBKR to pool collateral.
Now that I don’t use margin any more, I guess I could transfer stuff back to another broker. Transferring a chunk could also prevent over-trading as I tend not to look at the other broker.
Update on securities transfer from IBRK to ZKB: it took less than a week, I am positively surprised.
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Folks, there has been a discussion not so long ago about direct share registration, see Registering US shares bought at IB on your own name
Would that not be a good option for safety. You can basically move out your US ETFs from the broker to the “registrar”. Has still no one tried this? I imagine that would be a lot cheaper. Probably a US bank account is needed for the dividends, not sure how this would work otherwise.
Coming late to the discussion but i remember when switzerland unpegged the franc from the euro. I could not log in in PF for 24 hours because of the volume. I don’t remember if SQ reported issues. After the incident i left PF for interactive brokers.