Change of broker from Saxo to Interactive Brokers

[bubbasour]

Hi,

I currently have all my investments (VOO, VTI, VT, VUSD@LSE, VWRD@LSE, SCHX, ..) with Saxo Bank SG, and I've got two objectives:

1. Lower my trading costs, fees (commissions, custodian fees etc.) by shifting broker to IBKR(HK).

2. Swing my portfolio from VOO/VTI/VT to VUSD/VWRD@LSE. This is primarily for dividend tax reasons.

I have been thinking on what's the most cost efficient, least risky, way of doing this switch and I can think of a few options.

A. Transfer all positions to IBKR. Saxo charges Euro50 per ISIN which is quite pricy. , Sell the positions on IBKR, and then buy the Ireland domiciled funds on IBKR platform. Currency remains USD througout.

B. Sell the positions on Saxo, transfer the USD to IBKR, then buy the desired positions.

C. Do nothing at Saxo, keep Saxo as a second broker spreading some risk, just do all new investments on IBKR platform. Saxo overall is good, except for:
-> 0.06-0.12% custodian fee p.a for all your positions. So the more you invest with this broker, the more they will take from you.
-> The FX conversion fee, e.g. SGD to USD seems very high. It is Mid-rate+-0.5% which adds up quite expensive if you're gonna convert lotsa monies.

Has anyone else been through a similar situation and can provide some gudiance? Appreciate any pointers! Thx bubba

[bubbasour]

Has anyone made a change of borker with open positions and can provide some gudiance here? Appreciate any hints.

[imperia]

b. Sell the positions on Saxo, transfer the USD to IBKR, then buy the desired positions.

[AlohaJoe]

B. Sell the positions on Saxo, transfer the USD to IBKR, then buy the desired positions.

Why wouldn't you just do this?

You don't list any pros/cons and very few people on Bogleheads use Saxo so you're unlikely to get lots of answers.

[gmbndg]

I saw that you live in Singapore. Are you eligible for IBKR (HK) or will you open a IKBR (US)? Last time I talked to IBKR I had the impression they would open a US account for NRA who are not living in EU, Canada, HK, Japan, Australia, China.

[bubbasour]

I saw that you live in Singapore. Are you eligible for IBKR (HK) or will you open a IKBR (US)? Last time I talked to IBKR I had the impression they would open a US account for NRA who are not living in EU, Canada, HK, Japan, Australia, China.

Hi gmbndg, you can register here https://www.interactivebrokers.com.hk/ and open your account. They will ask for a set of document, verification of address, gov ID etc. HK is closer to Sing than is the US, so I assume it would make sense with HK (timezone, language etc.), but I may be wrong here..

I didn't know that there's a preferenace to create the account in US entitity, and how do I even figure whether it is a US/HK registered account? thx bubba

[bubbasour]

I eventually transferred the positions "as is" from Saxo to IB. Saxo does not support ACATS so it was a manual process, with both parties plus an intermediary involved. It took at least 1-1.5 weeks to complete this internaltional secuirty transfer with manual emails going back and forth between timezones. IB seemed to run out of the UK, and Saxo probably india (?)

Saxo will charge you Euro 50/position, capped at E160.
https://www.help.saxo/hc/en-us/articles ... from-Saxo-

While I first was thinking of selling, and transferring the cash and rebuying the equity, I came to realize after some test transfers that cash transfers across banks and borders involve multiple parties and there will be fees charges by each intermediary. You can see it explained here: https://www.help.saxo/hc/en-us/articles ... er-amount-

I tried to figure out on calls with HSBC, Citi what they actually charge, and it was near impossible as they didn't wanna reveal all details, or did not know exactly until I was routed back and forth to someone eventually who could give me some high level pointers. I asked the hsbc to trace the telex message and they did not wanna do that.

Why transferring positions as-is involves fees on the outward broker, it is a predictable and I would recommend this to others.

[Always passive]

Has anyone made a change of borker with open positions and can provide some gudiance here? Appreciate any hints.

It should be a simple process. I transferred for a client all his open positions from City in NY to HSBC in Switzerland. It is a common activity. Make sure to understand the fees and also be prepared for a month or so to complete the transfer. During this time, I do not think that you will be able to buy or sell anything.

[gmbndg]

I saw that you live in Singapore. Are you eligible for IBKR (HK) or will you open a IKBR (US)? Last time I talked to IBKR I had the impression they would open a US account for NRA who are not living in EU, Canada, HK, Japan, Australia, China.

Hi gmbndg, you can register here https://www.interactivebrokers.com.hk/ and open your account. They will ask for a set of document, verification of address, gov ID etc. HK is closer to Sing than is the US, so I assume it would make sense with HK (timezone, language etc.), but I may be wrong here..

I didn't know that there's a preferenace to create the account in US entitity, and how do I even figure whether it is a US/HK registered account? thx bubba

The way I understood it from the IKBR representative is that if you live in Europe you account is open in Europe (UK), if you live in Japan your account is open in Japan, if you leave in Australia your account is open in Australia, etc... If you live outside EU, Canada, HK, Japan, Australia, China, your account is open in the US. I assumed it has to do with compliance and tax reporting for IKBR. He also said that if I move from Nigeria to Europe I would need to close my account with IKBR US and open a new one with Europe because it is a different region.

It would be good to have some clarification on this and confirm you can open your IKBR account in HK especially if at some point you move country. I feel it is sometimes hard to get reliable information on this type of subject. Hope this is useful

[AlohaJoe]

If you live outside EU, Canada, HK, Japan, Australia, China, your account is open in the US

I live outside all of those places and my IB account is in Hong Kong.

[gmbndg]

If you live outside EU, Canada, HK, Japan, Australia, China, your account is open in the US

I live outside all of those places and my IB account is in Hong Kong.

Hi AlohaJoe, thank you for sharing your experience. I still don't understand why IB would let you choose the location where you can open an IB account? It might be worth confirming their policy on which country you are eligible to open an account.

[DJN]

Hi,
You could add deGiro to the mix, they have a list of "free" etfs to invest in.
DJN

[LadyGeek]

This thread is now in the Non-US Investing forum.

[bubbasour]

I saw that you live in Singapore. Are you eligible for IBKR (HK) or will you open a IKBR (US)? Last time I talked to IBKR I had the impression they would open a US account for NRA who are not living in EU, Canada, HK, Japan, Australia, China.

hi gmbndg, I've confirmed and my acc is with IB US which I believe is totally fine with me.

can you pls explain how this concern matters to us investors, and if there's anything in paricular I should keep in the back of my mind when it comes to which entity your account is with? thx bubba

[TedSwippet]

I've confirmed and my acc is with IB US which I believe is totally fine with me. ... Can you pls explain how this concern matters to us investors, and if there's anything in paricular I should keep in the back of my mind when it comes to which entity your account is with?

One way that it might matter is if you hold more than $60k in cash in the broker. A balance above $60k would be at risk of US estate taxes if in IB US, but might not be at risk if in IB London, IB HK and so on.

I guess that would hinge on whether or not IB's non-US subsidiaries are organised as separate brokerages, or if they all operate as a single US broker. No idea on that one.

[gmbndg]

I saw that you live in Singapore. Are you eligible for IBKR (HK) or will you open a IKBR (US)? Last time I talked to IBKR I had the impression they would open a US account for NRA who are not living in EU, Canada, HK, Japan, Australia, China.

hi gmbndg, I've confirmed and my acc is with IB US which I believe is totally fine with me.

can you pls explain how this concern matters to us investors, and if there's anything in paricular I should keep in the back of my mind when it comes to which entity your account is with? thx bubba

My understanding is that if you move to one of these places: EU, Canada, HK, Japan, Australia, China, you will have to open a new IB account with the entity where you move. For instance if you go back to Europe you might have to close your IB US account and open a IB Europe account. It would be interesting to confirm this with IB and to ask how the investments would be managed in such a case.

[bubbasour]

My understanding is that if you move to one of these places: EU, Canada, HK, Japan, Australia, China, you will have to open a new IB account with the entity where you move. For instance if you go back to Europe you might have to close your IB US account and open a IB Europe account. It would be interesting to confirm this with IB and to ask how the investments would be managed in such a case.

I see.. yeah I agree that would cause inconvenience, especially if IB does not have any automatic process for this when one changes the residential address?

Maybe someone has been through moving from US to either of the mentioned regions and can share their experience if they were requested to do anything at all? thx bubba