Swissquote, Degiro or IB

After having read nearly all posts on this topic, I am even more insecure about the broker selection than before. I started by opening a Swissquote depot and bought some ETFs there. As the quarterly fee is pretty high (min 15.- per quarter), I started to look for alternatives. I opened a basic and a custody account on Degiro and it seems pretty good to me and has a good price-performance ratio.

The only reason I currently stay with Swissquote is the fact, that Swissquote is located in Switzerland. I do not know why, but I currently feel uncomfortable holding my shares and etfs with a foreign broker. I just read a long post regarding the risk of losing shares on different brokers in this forum.

If I understand it right, the most of you would recommend IB (or if the invested amount is unter CHF 100’000 Degiro). Is there really no disadvantage in using a foreign broker like IB or Degiro over a Swiss one?

The things I am most scared of are:

  • Losing money in case of bankruptcy of the foreign broker
  • Losing money due to government regulations or restrictions (for example if Switzerland does not cooperate like the EU would like it to)
  • Having troubles in filling out the tax forms (missing the opportunity to order a tax overview like on Swissquote)
  • Getting lower dividends due to US regulations or as the broker only forwards part of it

Could any of you help me with my fears? I really would like to move to IB or Degiro once my fears are eliminated.

Thank you so much.

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IBKR will be cheaper than Degiro with >30k assets. Refundable withholding tax, lower TER ETFs and no fees on dividends.

Of all the things you mentionend, just the first one is “valid”. The rest you can manage to solve them. If regulation changes, you just move your ETF out.

Thank you for your reply. Does this risk also include the shares or “only” the cash?
How do you deal with this risk? And is the risk the same if I stay with a Swiss broker?

IBKR will be cheaper than Degiro with >30k assets. Refundable withholding tax, lower TER ETFs and no fees on dividends.

Ah I did not know that, thank you! Do you know if the cost for the depot on IB incur only if there are stocks on the depot or in every case?

Others will address the rest, but

There are no “troubles” which exist - Swissquote is “charging for air” with that report IMO.
Every decent broker will have a yearly (dividend) report available - and that is enough to attach, if required at all by your canton.
You anyway need to fill the corresponding tax form (W) when doing the tax returns.

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Thank you, that helps a lot!

You didn’t read them all :smiley:

The risks are stated there and in some other posts. (funds are segregated, cash is not. The risk that some insider steal you stuff is the same (or smaller) than someone hack your pc and steal it from there)

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SQ is more expensive, but I still use SQ. Why?

  • SQ is a swiss bank and not a brokerage firm (dont ask me about bank regulation) -> insured by ESISUISSE up to CHF 100k cash/client (stocks are anyway held in your name)

  • SQ is a 5 minute walk away from ZĂĽrich HB

  • If you have a problem and you call them you have a solution on the same day (Had an issue with an ETF fusion)

  • I dont care that much about VT and VTI that it would justify the headache that non Ireland or Luxemburg based funds would cause me.

  • If I should ever get into a litigation with SQ (fingers crossed) I rather have it in Switzerland in German, than in any other country in any other language

Is that all worth to me CHF 64.64 a year at SQ?
Yes!

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Thank you for your reply.

After reading this post I am even more closer to staying with Swissquote. Some commentators write that the shares in degiro are not necessarily in the name of the buyer and may be lost in the event of bankruptcy. One stated that a couple of years ago Hungary confiscated private pension funds. And as the title of the post states, IB is migrating to Hungary, Ireland or Luxembourg.

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That was my argument too. But there are not only the yearly cost for the depot but also the higher cost for each transaction.

Most of the people I talk to about using Swissquote, IB or Degiro use one of last two. None of them is scared about losing money or get into a litigation in another country. Are they just brave or careless?

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Don’t mix up. Pension funds have nothing to do with that. It’s a different field, even if they manage the same stuff.
Also it will piss many many people off. Not happening.

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I invest once a year and just let it sit there unless a business case changes drastically.

Dont wanna cause bad blood here :smile: I dont know the actual motivation behind it for those people, but you know mine now and obviousely you see it the same way, otherwise you would be at Degiro or IB :wink:

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I am using IB and DEGIRO and I don’t think just because SQ is in Switzerland that it is necessarily any safer. So I just go for the cheapest, it’s as easy as that. But maybe that’s just me not trusting much all these corporates… In my honest opinion the odds are equal that something goes badly wrong with any of them and that you will never see your money again.

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The cost difference between VT and VWRL is around 30 basis points if you include non-recoverable withholding taxes (15% of 2% of the 55% US part of VT + the 14 basis points cost difference).

That is around 300 chf with 100’000 chf invested. With a single 32k trade per year, you would pay something like 5 chf with IB and 140 with SQ, so another difference of 135 chf.

Now it is around 430 chf more per year that only grows bigger every year.

With 200k invested the opportunity cost is 600 chf + 245 chf = 845chf per year.

That is quite a bit of money.

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That is nice, but

  • I dont have 100k invested

  • I dont wanna deal with the IRS in case a president suddenly decides to change tax-treaties or a forum user misunderstood something :wink:

  • I dont act against the advice of several financial and tax experts just because I read it in a forum, where everyone can post everything (nothing against this community, I see myself as part of it)

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Read this topic:

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What are the costs of, for example, moving 100k of VT from IB to Swissquote?

I haven’t seen anyone talk about the (monetary and time) costs of not having a stable Broker over time. And it seems as if chasing the cheapest broker means changing your broker every couple of years.

Are there some brokers, where one can be sure that they’ll offer a somewhat marketable offer even in 5, 10 or 20 years? (Maybe Charles Schwab would be a likely Broker for people in the US, when considering this criteria.)

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Care to explain more? Thx

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I dont know what I should explain more, so you have to be a little more specific :wink:

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