Safe custody of securities [2025]

Yes, this is my understanding. IBKR has a direct account at the main depository DTCC. Assets are held there directly without the involvement of any banks. No intermediaries.

On the other hand, and not related to the brokerage issue, the fund manager (vanguard) doesn’t hold assets itself and uses a custodian. So the banks are involved, but not on the side of IBKR.

The same applies to UCITS, IBKR has direct accounts at national depots like Clearstream. Certainly in Germany.

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Did we just made a full circle and come to the conclusion that IB is actually the safest broker?

More fuel for your thoughts:

  1. This overview classifies brokers into different categories:

IB is “tier 1 pure broker”. Swissquote as well, so it doesn’t give me an extra confidence. But that’s not the point. What I find noteworthy is:

1.2 Direct Brokers within a Banking Group
Brokers in this category have a direct-to-consumer (minimal traditional infrastructure) business model, often a modern and mobile-friendly approach to clients. They are typically part of banking groups of significant importance.
Examples include HelloBank (BNP Paribas), Fortuneo (Arkéa), Boursobank (Société Générale), Bolero (KBC Bank) or Comdirect (Commerzbank).

I can imagine Comdirect as a secondary or main broker no problem. It’s not dirt cheap, but still the fees are very low.

  1. ETF shares traded in CHF are custodied by SIX? Or SIX is only a secondary custodian? Or what?

  2. Custody situation could be an argument for mutual funds (indexed, of course) vs. ETFs. Now, mutual funds available to retail investors in Switzerland are just a rip off. But you can subscribe retail classes of Swiss indexed mutual funds e.g. at Swissquote. These funds still suck.

If you have 500+ k in taxable account, there are more options. Both Vanguard and Blackrock give access to their mutual funds for this level of investment.

I also looked through e.g. Luxembourg SICAVs at some point, but have not found anything interesting.

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could you give a pointer for this? would be interested in using vanguard directly but i thought this wasn’t possible in CH

Can’t easily find it, but you can try to dig into docs for this fund, for example:

If you are serious and you have 1 million to invest, you can also contact “Vanguard Investments Switzerland GmbH”.

Maybe. But except for the country it belongs to :wink:
Wouldn’t be wise to assume that US brokers are safest to use these days

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In the past, after reading all the standard US blogs, I tried looking to see if it’s possible to directly invest with Vanguard, but I came to the conclusion that it’s not possible because on this website it only mentions ETFs, or mutual funds via a third party bank https://www.ch.vanguard/en/private-investor/how-to-buy

I looked on the “Professional Investor” version of the website (as opposed to the “private investor” one above) but it seems this is for institutions. I was surprised to see that a lot of the admin seems to be running on fax/post :scream: https://www.ch.vanguard/en/professional/product/investing-with-vanguard/mutual-funds

If I’m missing something I would be glad to be corrected.

In Switzerland , I think only option is via Exchanges

However for UK folks, there seems to be a way to invest directly