[Please help me choose a brokerage - Thailand]

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Topic Author
Jodie
Posts: 5
Joined: Mon Apr 12, 2021 8:40 pm

[Please help me choose a brokerage - Thailand]

Post by Jodie »

[Moved into a new thread from: International diversify but not many low cost foreign index fund available in Thailand. Any suggestion please. --admin LadyGeek]
MaxDOL wrote: Tue Jun 11, 2019 3:14 am
2.Invest directly in foreign domiciles ETF.
You can open foreign brokerage account at local Thai brokers or as andrew99999 suggest you can also invest through international brokers such as https://www.interactivebrokers.com/.
Opening account with local Thai brokers will be less hassle compare to International brokers because it very difficult to transfer fund to international brokers. I found that some Thai banks refuse to make the fund transfer until you got permission from Bank of Thailand. However Thai brokers have very high minimum trading commission range from 20 usd to 100 USD per single trade.Also most Thai brokers are not helpful regarding tax if you invest in the US and receive dividend you will get 30% withholding tax even though Thailand and US has tax treaty with will reduce withholding tax to 15%.
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Hi. Sorry, I'm going off-topic. But hopefully, you could advise me about choosing a brokerage. I'm a 30-year-old new boglehead from Thailand. I plan to buy 100% VWRA and already opened an account with Phillip (POEM). But then I see that a lot of folks here are using IB. May I ask what made you choose IB? I'm just going to buy and hold, so I won't probably need to make a lot of trade per year.
MaxDOL
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Re: [Please help me choose a brokerage - Thailand]

Post by MaxDOL »

Most people will suggest InteractiveBroker because it is one of the cheapest brokers out there, has high reputation and good customer service.

However InteractiveBroker has 10 USD minimum trading fee per month if your investment portfolio is below 100,000 USD.

If you intend to use local Thai brokers there are brokers with cheaper trading fee compare to POEM.
POEM trading fee for London stock exchange is 0.25% with 16.16 USD minimum trading fee per order.http://www.poems.in.th/service_detail.aspx?id=515

One local broker that I found to be cheaper is AIRA https://www.aira.co.th/global.aspx.
In case of AIRA there is no minimum trading fee for London stock exchange, the fee are flat rate for order that are less than 1,500 GBP and percent based on your trading volumes if your order exceed 1,500 GBP.
Trade value 0 - 1,500 : GBP 9 per transaction
• Trade value 1,500 - 4,000 : 0.60-0.35%
• Trade value 4,000 - 11,000 : 0.35-0.25%
• Trade value 11,000 - 50,000 : 0.25-0.21%
• Trade value >50,000 : 0.21%

For currency exchange/transfer fee to offshore investment account AIRA also cheaper at 800 Baht vs POEM 1,000 Baht.
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andrew99999
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Re: [Please help me choose a brokerage - Thailand]

Post by andrew99999 »

Jodie wrote: Tue Apr 13, 2021 5:22 am Hi. Sorry, I'm going off-topic. But hopefully, you could advise me about choosing a brokerage. I'm a 30-year-old new boglehead from Thailand. I plan to buy 100% VWRA and already opened an account with Phillip (POEM). But then I see that a lot of folks here are using IB. May I ask what made you choose IB? I'm just going to buy and hold, so I won't probably need to make a lot of trade per year.
Even in Australia — a politically stable, developed country with very low levels of corruption — we have occasionally had brokers who just took the money and investors were left with nothing.

Australia now has a system so that individuals own stocks in their own name, so you can know for sure that you own the stocks bought through your broker.

If that can happen in Australia, how can you be sure that a Thai broker is safe?

As to your question on why IB is most commonly used — because
- it is a US company
- it is listed on the US stock exchange
- due to being listed and in the US, it is audited by the SEC.

All of that means it is 1000 times less likely to have your money stolen compared to Thailand where that theft would be helped by corrupt police, judges, military, government. It isn't going to help to have cheaper trades if your life savings have been stolen.

Note that I haven't checked POEM. It may still be a reasonable brokerage. I am just explaining why IB is the go-to broker mentioned on this forum. The 10 USD inactivity fee is frustrating and I don't have a solution. Just be aware that the broker fee is not the most important thing.
sfnerd
Posts: 277
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Re: [Please help me choose a brokerage - Thailand]

Post by sfnerd »

Hello Jodie,

While there are some local options to purchase some indexes like the S&P 500 at a fairly reasonable rate, Interactive Brokers is by far the best option for selection, and if you have more than 100k USD, they will be best on price as well.

Even below 100k, IB is probably the best, since the inactivity fees are not very large. Almost everyone I know in Thailand (I live in Bangkok) uses IB if they trade international equities and indexes. They are big, safe, and relatively cheap.

Poems is pretty new and you're probably better off with IB, just because it will be easy to use and is very trustworthy. However, Poems seems legit.

If I were you I would open an IB account if your balance will be more than 10k within a few years.
InvestInPasta
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Location: Italy

Re: [Please help me choose a brokerage - Thailand]

Post by InvestInPasta »

andrew99999 wrote: Thu Apr 15, 2021 1:00 amIf that can happen in Australia, how can you be sure that a Thai broker is safe?

As to your question on why IB is most commonly used — because
- it is a US company
- it is listed on the US stock exchange
- due to being listed and in the US, it is audited by the SEC.

All of that means it is 1000 times less likely to have your money stolen compared to Thailand where that theft would be helped by corrupt police, judges, military, government. It isn't going to help to have cheaper trades if your life savings have been stolen.
Yep, Bernie's tale is a good lesson to all the people who wants to get smart with US rules.

Anyway I would like to open a regular bank account in US as a foreigner non resident in US, in that way I could buy stocks/ETF in my own name.
I don't like too much broker accounts, they keep all the money and assets is one big account for all their customers and the account is owned by the broker.
When I study English I am lazier than my portfolio. Feel free to fix my english and investing mistakes.
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andrew99999
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Re: [Please help me choose a brokerage - Thailand]

Post by andrew99999 »

sfnerd wrote: Thu Apr 15, 2021 6:05 am Hello Jodie,

While there are some local options to purchase some indexes like the S&P 500 at a fairly reasonable rate, Interactive Brokers is by far the best option for selection, and if you have more than 100k USD, they will be best on price as well.

Even below 100k, IB is probably the best, since the inactivity fees are not very large. Almost everyone I know in Thailand (I live in Bangkok) uses IB if they trade international equities and indexes. They are big, safe, and relatively cheap.

Poems is pretty new and you're probably better off with IB, just because it will be easy to use and is very trustworthy. However, Poems seems legit.

If I were you I would open an IB account if your balance will be more than 10k within a few years.
The inactivity fee size is quite a lot for local Thais. An early university graduate might earn about USD $3.40 an hour (THB20,000/m salary). So an inactivity fee of USD $10/month comes to 3 hours of salary per month. If you add up 36 hours of your salary as an annual cost to use a broker, you will understand how bad it is.

The 100k USD limit to remove the inactivity fee comes to 3.12m THB, so again, unlikely within a few years for local Thai's.

It's unfortunate and I don't know a good solution for a secure brokerage at a reasonable price, but my first step would going international.
latak215
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Re: [Please help me choose a brokerage - Thailand]

Post by latak215 »

I wonder i 1 or 2 box spreads a month mitigate inactivity fee. good luck
sfnerd
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Re: [Please help me choose a brokerage - Thailand]

Post by sfnerd »

andrew99999 wrote: Thu Apr 15, 2021 7:54 am
sfnerd wrote: Thu Apr 15, 2021 6:05 am Hello Jodie,

While there are some local options to purchase some indexes like the S&P 500 at a fairly reasonable rate, Interactive Brokers is by far the best option for selection, and if you have more than 100k USD, they will be best on price as well.

Even below 100k, IB is probably the best, since the inactivity fees are not very large. Almost everyone I know in Thailand (I live in Bangkok) uses IB if they trade international equities and indexes. They are big, safe, and relatively cheap.

Poems is pretty new and you're probably better off with IB, just because it will be easy to use and is very trustworthy. However, Poems seems legit.

If I were you I would open an IB account if your balance will be more than 10k within a few years.
The inactivity fee size is quite a lot for local Thais. An early university graduate might earn about USD $3.40 an hour (THB20,000/m salary). So an inactivity fee of USD $10/month comes to 3 hours of salary per month. If you add up 36 hours of your salary as an annual cost to use a broker, you will understand how bad it is.

The 100k USD limit to remove the inactivity fee comes to 3.12m THB, so again, unlikely within a few years for local Thai's.

It's unfortunate and I don't know a good solution for a secure brokerage at a reasonable price, but my first step would going international.
I have no clue about the OP's financial situation, but I live in Thailand and would bet that given their English skills, he/she is doing fairly well. You'd be surprised at the number of millionaires here, too.

While there are other options locally with frankly very high fees and bad products, there are few international options open to Thais, unfortunately. IB is what all of my colleagues here in Thailand use to trade/buy anything besides the local market.

$120/year isn't too bad when your other options are a few percent in expenses. Siam Commercial Bank does have an S&P 500 tracker that locals can access for about 0.5%, but once you're above 10k USD and have a few trades a year it really makes sense to go with IB.

I personally don't use Interactive Brokers myself. Since I am a US citizen I have access to brokers that are better for my situation.
Topic Author
Jodie
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Joined: Mon Apr 12, 2021 8:40 pm

Re: [Please help me choose a brokerage - Thailand]

Post by Jodie »

MaxDOL wrote: Tue Apr 13, 2021 11:18 am Most people will suggest InteractiveBroker because it is one of the cheapest brokers out there, has high reputation and good customer service.

However InteractiveBroker has 10 USD minimum trading fee per month if your investment portfolio is below 100,000 USD.

If you intend to use local Thai brokers there are brokers with cheaper trading fee compare to POEM.
POEM trading fee for London stock exchange is 0.25% with 16.16 USD minimum trading fee per order.http://www.poems.in.th/service_detail.aspx?id=515

One local broker that I found to be cheaper is AIRA https://www.aira.co.th/global.aspx.
In case of AIRA there is no minimum trading fee for London stock exchange, the fee are flat rate for order that are less than 1,500 GBP and percent based on your trading volumes if your order exceed 1,500 GBP.
Trade value 0 - 1,500 : GBP 9 per transaction
• Trade value 1,500 - 4,000 : 0.60-0.35%
• Trade value 4,000 - 11,000 : 0.35-0.25%
• Trade value 11,000 - 50,000 : 0.25-0.21%
• Trade value >50,000 : 0.21%

For currency exchange/transfer fee to offshore investment account AIRA also cheaper at 800 Baht vs POEM 1,000 Baht.
Thank you so much. That’s very helpful. :D It turns out that the trading fee at POEM is a bit higher than they stated in the website (0.35%). I’ll definitely move my portfolio to IB when I I could accumulate over 100,000 USD.
Topic Author
Jodie
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Joined: Mon Apr 12, 2021 8:40 pm

Re: [Please help me choose a brokerage - Thailand]

Post by Jodie »

andrew99999 wrote: Thu Apr 15, 2021 1:00 am
Jodie wrote: Tue Apr 13, 2021 5:22 am Hi. Sorry, I'm going off-topic. But hopefully, you could advise me about choosing a brokerage. I'm a 30-year-old new boglehead from Thailand. I plan to buy 100% VWRA and already opened an account with Phillip (POEM). But then I see that a lot of folks here are using IB. May I ask what made you choose IB? I'm just going to buy and hold, so I won't probably need to make a lot of trade per year.
Even in Australia — a politically stable, developed country with very low levels of corruption — we have occasionally had brokers who just took the money and investors were left with nothing.

Australia now has a system so that individuals own stocks in their own name, so you can know for sure that you own the stocks bought through your broker.

If that can happen in Australia, how can you be sure that a Thai broker is safe?

As to your question on why IB is most commonly used — because
- it is a US company
- it is listed on the US stock exchange
- due to being listed and in the US, it is audited by the SEC.

All of that means it is 1000 times less likely to have your money stolen compared to Thailand where that theft would be helped by corrupt police, judges, military, government. It isn't going to help to have cheaper trades if your life savings have been stolen.

Note that I haven't checked POEM. It may still be a reasonable brokerage. I am just explaining why IB is the go-to broker mentioned on this forum. The 10 USD inactivity fee is frustrating and I don't have a solution. Just be aware that the broker fee is not the most important thing.
That’s a very clear explanation. Thank you! :D I also share your concern about the reliability of local brokerages. In fact, the reason that draws me to POEM in the first place is that its headquarter is in Singapore. However, now that I’ve read all the replies, I’ve decided to move to IB when my portfolio reach the required amount to be exempted from an inactivity fee.
Topic Author
Jodie
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Re: [Please help me choose a brokerage - Thailand]

Post by Jodie »

sfnerd wrote: Thu Apr 15, 2021 6:05 am Hello Jodie,

While there are some local options to purchase some indexes like the S&P 500 at a fairly reasonable rate, Interactive Brokers is by far the best option for selection, and if you have more than 100k USD, they will be best on price as well.

Even below 100k, IB is probably the best, since the inactivity fees are not very large. Almost everyone I know in Thailand (I live in Bangkok) uses IB if they trade international equities and indexes. They are big, safe, and relatively cheap.

Poems is pretty new and you're probably better off with IB, just because it will be easy to use and is very trustworthy. However, Poems seems legit.

If I were you I would open an IB account if your balance will be more than 10k within a few years.
Hello! Thank you for your advice. :D It really helps me made up my mind. It’d probably take me about 5 years or more to reach 10k. So my plan is to stick with POEM for some time and then switch to IB as soon as I can.
sfnerd
Posts: 277
Joined: Tue Apr 08, 2014 1:16 am

Re: [Please help me choose a brokerage - Thailand]

Post by sfnerd »

Jodie wrote: Mon Apr 26, 2021 6:06 am
sfnerd wrote: Thu Apr 15, 2021 6:05 am Hello Jodie,

While there are some local options to purchase some indexes like the S&P 500 at a fairly reasonable rate, Interactive Brokers is by far the best option for selection, and if you have more than 100k USD, they will be best on price as well.

Even below 100k, IB is probably the best, since the inactivity fees are not very large. Almost everyone I know in Thailand (I live in Bangkok) uses IB if they trade international equities and indexes. They are big, safe, and relatively cheap.

Poems is pretty new and you're probably better off with IB, just because it will be easy to use and is very trustworthy. However, Poems seems legit.

If I were you I would open an IB account if your balance will be more than 10k within a few years.
Hello! Thank you for your advice. :D It really helps me made up my mind. It’d probably take me about 5 years or more to reach 10k. So my plan is to stick with POEM for some time and then switch to IB as soon as I can.
You're welcome. I think SCB has some lower fee S&P 500 and other index funds available, which might be an OK option in the meantime also.
Topic Author
Jodie
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Joined: Mon Apr 12, 2021 8:40 pm

Re: [Please help me choose a brokerage - Thailand]

Post by Jodie »

sfnerd wrote: Mon Apr 26, 2021 8:55 am
Jodie wrote: Mon Apr 26, 2021 6:06 am
sfnerd wrote: Thu Apr 15, 2021 6:05 am Hello Jodie,

While there are some local options to purchase some indexes like the S&P 500 at a fairly reasonable rate, Interactive Brokers is by far the best option for selection, and if you have more than 100k USD, they will be best on price as well.

Even below 100k, IB is probably the best, since the inactivity fees are not very large. Almost everyone I know in Thailand (I live in Bangkok) uses IB if they trade international equities and indexes. They are big, safe, and relatively cheap.

Poems is pretty new and you're probably better off with IB, just because it will be easy to use and is very trustworthy. However, Poems seems legit.

If I were you I would open an IB account if your balance will be more than 10k within a few years.
Hello! Thank you for your advice. :D It really helps me made up my mind. It’d probably take me about 5 years or more to reach 10k. So my plan is to stick with POEM for some time and then switch to IB as soon as I can.
You're welcome. I think SCB has some lower fee S&P 500 and other index funds available, which might be an OK option in the meantime also.
Big thanks! I’m applying for the SCBe account right now. :)
mkps
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Joined: Mon May 11, 2020 4:02 am

Re: [Please help me choose a brokerage - Thailand]

Post by mkps »

SCBs has recently offered the easiest possible way to invest in US-domiciled ETFs through SCB Easy Invest Mobile App where you can do everything from exchanging money to investing in US stock exchanges.

Pros:
- No permission needed from Bank of Thailand to transfer money outside the country
- No flat rate charged (US ~40) from local banks when making a wire transfer

Cons:
- USD ~5 as minimum commission per transaction in US exchanges
- USD ~60 as an administrative fee for applying W-8BEN to claim the US tax treaty benefits (withholding tax reduced from 30% to 15%) which is valid for 3 years :annoyed

In my opinion, if you're a big fan of lazy-fund style of investing, the most cost effective is to invest in VT (Vanguard Total World Stock Index Fund ETF) for every monthly paycheck to come and forget. If we ignore the US estate tax for a second, and let's focus on the dividend withholding + TER ratio, VT's total cost is (2.0% × 0.039) + ((2.0% × (1 - 0.039) - 0.08%) × 0.15) + TER = 0.078 + 0.2763 + 0.08= 0.4343% while VWRA(VT's Ireland-domiciled equivalent) has (2.0% × 0.103) + ((2.0% × (1 - 0.103) - 0.22%) × 0) + TER = 0.206 + 0 + 0.23 = 0.436%. Although the costs are almost identical, if investing in VT through SCBs, you're going to save yourself a lot of trouble from having to go to a local bank and making a wire transfer to your IB account every month (US 40 x 12 = US 480 per year). Still, you're taking a risk of US estate and inheritance taxes if you've accumulated US 60k in situated assets.


edit: fix the calculation for VT from TedSwippet
Last edited by mkps on Mon Jun 21, 2021 2:16 pm, edited 3 times in total.
TedSwippet
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Re: [Please help me choose a brokerage - Thailand]

Post by TedSwippet »

mkps wrote: Mon Jun 21, 2021 1:33 pm ... VT's total cost is (2.0% × 0.039) + ((2.0% × (1 - 0.039) - 0.08%) × 0.15) + TER = 0.078 + 0.5526 + 0.08= 0.4343% ...
0.078 + 0.5526 + 0.08 = 0.7106%. This is VT's total cost including US tax drag, and it is a fair bit larger than VWRA's 0.436%.

More here: Nonresident alien investors and Ireland domiciled ETFs - Bogleheads
mkps
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Re: [Please help me choose a brokerage - Thailand]

Post by mkps »

TedSwippet wrote: Mon Jun 21, 2021 1:55 pm
mkps wrote: Mon Jun 21, 2021 1:33 pm ... VT's total cost is (2.0% × 0.039) + ((2.0% × (1 - 0.039) - 0.08%) × 0.15) + TER = 0.078 + 0.5526 + 0.08= 0.4343% ...
0.078 + 0.5526 + 0.08 = 0.7106%. This is VT's total cost including US tax drag, and it is a fair bit larger than VWRA's 0.436%.

More here: Nonresident alien investors and Ireland domiciled ETFs - Bogleheads
That's because you assume 30% tax rate when for Thailand, it's actually 15%

I also made some wrong calculation because I quoted from the boglehead's wiki page. This current version should be correct now. Sorry for the confusion.

Ref: https://www.bogleheads.org/wiki/Nonresi ... sion_table
TedSwippet
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Re: [Please help me choose a brokerage - Thailand]

Post by TedSwippet »

mkps wrote: Mon Jun 21, 2021 2:11 pm
TedSwippet wrote: Mon Jun 21, 2021 1:55 pm
mkps wrote: Mon Jun 21, 2021 1:33 pm ... VT's total cost is (2.0% × 0.039) + ((2.0% × (1 - 0.039) - 0.08%) × 0.15) + TER = 0.078 + 0.5526 + 0.08= 0.4343% ...
0.078 + 0.5526 + 0.08 = 0.7106%. This is VT's total cost including US tax drag, and it is a fair bit larger than VWRA's 0.436%.

More here: Nonresident alien investors and Ireland domiciled ETFs - Bogleheads
That's because you assume 30% tax rate when for Thailand, it's actually 15%

Ref: https://www.bogleheads.org/wiki/Nonresi ... sion_table
I see. Thanks. In which case, your second to last expression in your post should have read "0.078 + 0.2763 + 0.08" and not "0.078 + 0.5526 + 0.08".
TedSwippet
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Re: [Please help me choose a brokerage - Thailand]

Post by TedSwippet »

mkps wrote: Mon Jun 21, 2021 2:11 pm I also made some wrong calculation because I quoted from the boglehead's wiki page. This current version should be correct now. Sorry for the confusion.
Crossposted with my previous reply. Thanks for the correction.
glorat
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Re: [Please help me choose a brokerage - Thailand]

Post by glorat »

Jodie wrote: Mon Apr 26, 2021 5:40 am Thank you so much. That’s very helpful. :D It turns out that the trading fee at POEM is a bit higher than they stated in the website (0.35%). I’ll definitely move my portfolio to IB when I I could accumulate over 100,000 USD.
Any commissions you pay for trading get taken out of the $10/month. So if you pay $6 trading in commissions already from your monthly trading then the monthly fee is only $4. So see how much your current broker is costing you in comissions... you'll find it cheaper to switch to IB much sooner.
typical.investor
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Re: [Please help me choose a brokerage - Thailand]

Post by typical.investor »

Jodie wrote: Mon Apr 26, 2021 6:06 am
sfnerd wrote: Thu Apr 15, 2021 6:05 am Hello Jodie,

While there are some local options to purchase some indexes like the S&P 500 at a fairly reasonable rate, Interactive Brokers is by far the best option for selection, and if you have more than 100k USD, they will be best on price as well.

Even below 100k, IB is probably the best, since the inactivity fees are not very large. Almost everyone I know in Thailand (I live in Bangkok) uses IB if they trade international equities and indexes. They are big, safe, and relatively cheap.

Poems is pretty new and you're probably better off with IB, just because it will be easy to use and is very trustworthy. However, Poems seems legit.

If I were you I would open an IB account if your balance will be more than 10k within a few years.
Hello! Thank you for your advice. :D It really helps me made up my mind. It’d probably take me about 5 years or more to reach 10k. So my plan is to stick with POEM for some time and then switch to IB as soon as I can.
Schwab International has no activity fees or commissions.

All you need is 25,000.

I highly recommend them. They don’t open accounts I. As many places as IB, but Thailand is one of the places they do.
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