Interactive Brokers or another broker? [2023]

[Siegward]

@Dr.PI

@Siegward

I’m probably a cynic, but referrers on IBKR are limited to 30 referrals total and I suspect this is the reason.

The reason is referral fees. I can give you a referral code if you want .

TER of products has nothing to do with brokers.

Thank you for your offer, but I already have an account
Yes, that was some unfortunate wording on my part. I was thinking about the TER difference between VT and VWRL in addition to the broker costs.

@Abs_max

There are following factors

1. Brokerage costs

2. Availability of ETFs and other instruments

3. Ease of investing

4. Stamp duties

5. Regulations

6. Custody fees

If you compare Swissquote and IBKR, I would say the following because I have accounts in both

#1 -: IBKR is by far the best . Only Saxo even comes close.

#2 -: both are good and I think availability of Swiss bonds and funds on SQ is a plus. But if you mainly want VT , VWRL, SWDA, CHSPI, both have everything

#3 -; not much difference for buy and hold investors

#4 -; SQ has disadvantage because of Swiss law. It’s not their fault but it does increase costs (0.15% for buy and sell of Foreign ETFs, 0.075% for buy and sell of local CH domicile ETFs)

#5 -: both are well regulated. Only difference is SQ is governed by Swiss law and IBKR seems to have other jurisdictions. But I don’t see much issues

#6 -: IBKr is 0, SQ ranges from 80-200 CHF depending on asset value. Above a million there is a premium on SQ…

I started with IBKR and only added SQ as a backup broker. Going forward I would keep both but maybe higher value at IBKR. I had same dilemma for many months. But in the end I decided that I don’t want everything in one broker and if the cost to do so is ~100-200 per year then so be it.

If you are in dilemma , just open account in BOTh. You can buy Swiss ETFs in SQ and World ETF in IB. And just to be clear , you CAN buy and Store VT in both platforms. Just SQ is more expensive in terms of #1 and #4

You can also buy in IBKR and then in 1-2 years transfer to SQ for no fees. But of course eventually you might incur selling fees.

P.S -: I can share referral if you need. But I guess you already have it

Wow, thank you for your detailed reply. I especially like the idea of a backup Broker, I might actually do just that. VT in IBKR and SMIM or CHSPI in SQ.

@Mirager

For some of us the quality of our sleep is worth more than a few CHF per month in fees.

My point exactly. I wouldn’t care about a difference of a few CHF per month, but I suspect the gap widens after a few years. I’d rather not look back in 10 years and realize I “lost” 10k

[Abs_max]

@Abs_max

I checked some data and here is performance for 100 USD invested in VT vs VWRL from June 2012 to Feb 2024. I used JustETF for VWRL and Portfolio visualizer for VT. I am not 100% sure what is assumed dividend tax in these simulations but following is result. It is exactly the same.

1 Jun 2019 to 29 Feb 2024
VT - 325 USD
VWRL - 325 USD

@Siegward - I added this info a bit later. not sure if you read it

[Mirager]

@Siegward

My point exactly. I wouldn’t care about a difference of a few CHF per month, but I suspect the gap widens after a few years. I’d rather not look back in 10 years and realize I “lost” 10k

There are some good points above, including numbers and me being schooled to move to PostFinance if I have to have a brick and mortar Swiss bank as my broker from VERY expensive UBS.

Objectively speaking, if we assume equal level of safety between IBKR and a Swiss bank, IBKR is better, I just couldn’t sleep with my savings there.

I’m inclined to call you Onion Bro, not sure how many will get the joke here

[thewicked]

Hi All
EU citizen living and working in Switzerland. Want to move about 500K CHF to a broker. My smallest trades will be in the 20K range. I will trade about 4-5 times a month: mostly US, swiss stocks, US etfs. maybe later I will learn options.
Best would be an all in one solution that also offers a credit card and I can pay my bills from if needed. I heard about Cornertrader but maybe there are some better options for me?

Thanks in advance.

[cubanpete_the_swiss]

Very bad experience with Corner Trader. Took forever to open the account (almost 2 months). They did charge 30% U.S. withholding tax where it should have been 15%, even with all the correct papers supplied. Currency exchange was extremely expensive, thousands more than at IBKR. They wrote a letter to communicate they stop offering some ETF my friend did hold. So he decided to leave.

Check out the mustachian comparison of brokerage accounts.

[nabalzbhf]

If you want to do active trading (good luck!), you’ll probably save hundreds of CHF per year or more using IBKR instead of a local broker.

[afstand]

It may be not 100% reliable, as I used (tortured) ChatGPT to come up with estimations of broker reliability in my case. I have no idea if the probabilities are properly estimated, but do believe that the ranking is likely to be correct. The question essentially was: 1) what is the probability that broker looses my equity over the period of 30 years and 2) what is the expected recovery rate before SIPC or other compensation schemes mitigate the loss.

Broker	Probability of Equity Loss (30y)	Estimated Recovery Before Compensation
Rabobank (NL)	~0.5%	~98-100%
IBKR (IBIE & US ETFs)	~1.0%	~95-100%
Swissquote (Switzerland)	~1.5%	~90-100%
Swissquote (Luxembourg)	~2.0%	~85-100%
Saxo Bank (DK)	~5.0%	~75-95%
DeGiro (FlatexDEGIRO)	~7.0%	~50-90%

Key Insights:

• Rabobank remains the safest, as it is a systemic Dutch bank with strict supervision.
• IBKR is also very strong, but slightly more complex due to its global structure.
• Swissquote Switzerland is fairly solid, benefiting from strong Swiss banking regulation.
• Swissquote Luxembourg has slightly more risk, given EU vs. Swiss regulatory differences.
• Saxo and DeGiro carry the highest risks, due to past regulatory issues, conflicts of interest, and less robust investor protections.

[markus654]

@afstand

(…) benefiting from strong Swiss banking regulation

Yes, that’s why you shouldn’t use ChatGTP. It is an urban legend that Switzerland has particularly good banking regulation. This can be seen from the fact that first UBS and then Credit Suisse got into difficulties and FINMA was unable to intervene at an early stage.

[afstand]

Oké, I put a warning above the table, that it may be not 100% correct. But I think ChatGPT should get the big picture right through indexing of everything and coming up with an intuition. The bigger picture is that IBKR likely more reliable than Swiss brokerages, and that Saxo and Degiro are not very good long term.

[almi]

There is no secret sauce here. It gets it from sentiment, as you get it as a human as well. So there is no surprise that it fits what you were thinking.

It’s like you have a teacher (human) that teaches a student (ChatGPT) and later says “what I say is likely correct because my student says the same”.

I call bullshit on that table, especially the DeGiro percentage.
Repeat the same thing with perplexity.ai (check out these results) and you get probability of loss of max 0.02% for all. Not saying this 0.02% is closer to reality, just saying these estimates are kind of all over the place.

However, my intuition would agree with this part:

@afstand

do believe that the ranking is likely to be correct

[dbu]

@afstand

…ChatGPT…coming up with an intuition

Please
It’s just a probabilistic word puzzle generator.

[stojano]

@dbu

probabilistic word puzzle generator

Sometimes it feels we all are…

[cubanpete_the_swiss]

Better ask your cleaning lady.

The only thing that those artificial idiots did learn to do good is to answer when they have no clue instead of just saying “I don’t know”.

[afstand]

@almi

There is no secret sauce here. It gets it from sentiment, as you get it as a human as well.

In the absence of objective quantitative information, I believe it is best what you can get if you rely on wisdom of the crowd or jellybean count, what essentially what ChatGPT does.

Wisdom of the crowd