Saxobank vs Swissqoute Luxembourg

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Topic Author
900
Posts: 35
Joined: Sat Aug 08, 2020 1:54 pm

Saxobank vs Swissqoute Luxembourg

Post by 900 »

Hi,
I am a long-term(20+ years) passive index investor. I have an Interactive Brokers account and I invested mid 7 figures to index ETFs. I want to invest more but I want to open another broker account for diversification.

I'm not a US/EU person; that's why I don't have too many options(for example, I can't open a Vanguard account).

My main objective is safety. It looks like Saxo Bank(VIP) and Swissqoute Luxembourg(Platinum) are good options and they accept my residency. I am ok with their pricing but I couldn't decide which one is safer. Do you have recommendations, including other brokers?
helloyou
Posts: 222
Joined: Sun Apr 26, 2020 6:09 am

Re: Saxobank vs Swissqoute Luxembourg

Post by helloyou »

For passive investing what about going with your bank(s)? Realistically huge banks should be safer than brokers
Topic Author
900
Posts: 35
Joined: Sat Aug 08, 2020 1:54 pm

Re: Saxobank vs Swissqoute Luxembourg

Post by 900 »

helloyou wrote: Sun Jul 18, 2021 10:06 pm For passive investing what about going with your bank(s)? Realistically huge banks should be safer than brokers
It is very hard to find a bank for investing, most of them trying to rip off the customers. For example, I have a UBS account but fees are extremely high(custody 0.7% and trade 1%).
helloyou
Posts: 222
Joined: Sun Apr 26, 2020 6:09 am

Re: Saxobank vs Swissqoute Luxembourg

Post by helloyou »

900 wrote: Mon Jul 19, 2021 3:44 am
helloyou wrote: Sun Jul 18, 2021 10:06 pm For passive investing what about going with your bank(s)? Realistically huge banks should be safer than brokers
It is very hard to find a bank for investing, most of them trying to rip off the customers. For example, I have a UBS account but fees are extremely high(custody 0.7% and trade 1%).
Indeed this is very expensive. There has to be a bank that does not charge custody fees, and with a fixed trade fee given your volume at hand). I can think of HSBC Expat in your situation. It’s open to pretty much anyone and the only charge is a flat fee or ~15 pounds per trade. No custody or variable fees. This might be the best option for you.

Otherwise, have you considered private banking? It could make sense for you in your situation (including for taxation optimization), or not.
Topic Author
900
Posts: 35
Joined: Sat Aug 08, 2020 1:54 pm

Re: Saxobank vs Swissqoute Luxembourg

Post by 900 »

@helloyou
I'm ok with custody fees as long as it is not extremely high. For example 0.2-0.3% is fine. I don't need tax optimization because I'm a UAE resident(no capital gains, no dividend, no income tax) I also don't have any tax responsibility to my home country because of my residence.

Do you have any specific private banking recommendations? I heard HSBC expat before but did you use their platform? As far as I know, it is very outdated and Jersey based.
DJN
Posts: 996
Joined: Sun Nov 19, 2017 11:30 pm

Re: Saxobank vs Swissqoute Luxembourg

Post by DJN »

Hi,
I have accounts with both Saxo and Swissquote for flexibility. I much prefer IB over these two and Saxo has expensive charges. I don't like investing via a Swiss company either, you never know when they will start asking for more fees. Unless you are concerned about solvency with IB why not stick with them? Keep it simple remember when you depart UAE you should sell everything.
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
Topic Author
900
Posts: 35
Joined: Sat Aug 08, 2020 1:54 pm

Re: Saxobank vs Swissqoute Luxembourg

Post by 900 »

DJN wrote: Mon Jul 19, 2021 8:24 am Hi,
I have accounts with both Saxo and Swissquote for flexibility. I much prefer IB over these two and Saxo has expensive charges. I don't like investing via a Swiss company either, you never know when they will start asking for more fees. Unless you are concerned about solvency with IB why not stick with them? Keep it simple remember when you depart UAE you should sell everything.
DJN
Swissqoute CH is expensive also there is a Swiss stamp tax but Swissqoute Luxembourg is not expensive and has better pricing. I will probably go with Saxo but still looking for safer options.

I trust IB but I shouldn't put all eggs in one basket. I will invest another mid 7 figures in the new broker account.

I don't have a plan to leave the UAE in the near future. I bought a home in UAE and my company is also in UAE. Even if I depart from UAE, I can just switch my residency at brokers(they also support my home country), no need to sell?
DJN
Posts: 996
Joined: Sun Nov 19, 2017 11:30 pm

Re: Saxobank vs Swissqoute Luxembourg

Post by DJN »

900 wrote: Mon Jul 19, 2021 9:05 am Even if I depart from UAE, I can just switch my residency at brokers(they also support my home country), no need to sell?
Hi,
I don't think that this is necessarily correct, it really depends upon the tax law of the country you move on to. In order to avoid any question of capital gains tax on your investments from the time of purchase you should sell and repurchase from the new country.
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
helloyou
Posts: 222
Joined: Sun Apr 26, 2020 6:09 am

Re: Saxobank vs Swissqoute Luxembourg

Post by helloyou »

900 wrote: Mon Jul 19, 2021 8:04 am @helloyou
I'm ok with custody fees as long as it is not extremely high. For example 0.2-0.3% is fine. I don't need tax optimization because I'm a UAE resident(no capital gains, no dividend, no income tax) I also don't have any tax responsibility to my home country because of my residence.

Do you have any specific private banking recommendations? I heard HSBC expat before but did you use their platform? As far as I know, it is very outdated and Jersey based.

Saxo bank could be fine then if you can tolerate a 0.12-0.2% cut in custody fees, which I think is a lot for what they are offering beyond how much this would represent in dollar value for the sum you are looking to invest.

HSBC Expat has an outdated platform but at least your money is safe compared to your average broker. Plus the platform is good enough to do basic buy and hold of any Irish ETFs you might be interested in.

Regarding private banking options I have very limited knowledge but you could look after all of the main street ones (UBS Credit Suisse JPM HSBC etc)… they can provide customized solutions in terms of tax optimization, investments (PE/VC deals), estate planning etc. that you could not come up with yourself.
Topic Author
900
Posts: 35
Joined: Sat Aug 08, 2020 1:54 pm

Re: Saxobank vs Swissqoute Luxembourg

Post by 900 »

helloyou wrote: Mon Jul 19, 2021 12:32 pm
900 wrote: Mon Jul 19, 2021 8:04 am @helloyou
I'm ok with custody fees as long as it is not extremely high. For example 0.2-0.3% is fine. I don't need tax optimization because I'm a UAE resident(no capital gains, no dividend, no income tax) I also don't have any tax responsibility to my home country because of my residence.

Do you have any specific private banking recommendations? I heard HSBC expat before but did you use their platform? As far as I know, it is very outdated and Jersey based.

Saxo bank could be fine then if you can tolerate a 0.12-0.2% cut in custody fees, which I think is a lot for what they are offering beyond how much this would represent in dollar value for the sum you are looking to invest.

HSBC Expat has an outdated platform but at least your money is safe compared to your average broker. Plus the platform is good enough to do basic buy and hold of any Irish ETFs you might be interested in.

Regarding private banking options I have very limited knowledge but you could look after all of the main street ones (UBS Credit Suisse JPM HSBC etc)… they can provide customized solutions in terms of tax optimization, investments (PE/VC deals), estate planning etc. that you could not come up with yourself.
Thanks for the information. Are you using HSBC InvestDirect? I heard that UK tax can be a problem for non-UK residents.
Hustlinghustling
Posts: 321
Joined: Mon Jul 25, 2016 12:09 am

Re: Saxobank vs Swissqoute Luxembourg

Post by Hustlinghustling »

900 wrote: Mon Jul 19, 2021 8:04 am @helloyou
I'm ok with custody fees as long as it is not extremely high. For example 0.2-0.3% is fine.

Do you have any specific private banking recommendations?
I believe I've suggested this for you previously. I use UBS Singapore (as a non-Singaporean resident or citizen) 0.15% custody fee.
DXBinvest
Posts: 24
Joined: Sun Jul 07, 2019 2:42 pm

Re: Saxobank vs Swissqoute Luxembourg

Post by DXBinvest »

Hustlinghustling wrote: Sat Jul 31, 2021 3:57 am I believe I've suggested this for you previously. I use UBS Singapore (as a non-Singaporean resident or citizen) 0.15% custody fee.
What are the requirements and trading fees? Do they have access to XETRA and Euronext Amsterdam? Based on their website and FAQ it is not clear.

And why to use UBS Singapore which is charging 0.15% custody fees if you can use Standard Chartered SG with 0% custody fees? On €2M that's €3000 savings p.a.
megatron1911
Posts: 34
Joined: Fri Mar 29, 2019 2:52 am

Re: Saxobank vs Swissqoute Luxembourg

Post by megatron1911 »

I know what your premise is (just passive investing), but I would still think that for a portfolio your size some diversification into alts – which are not available on retail online brokerages – would seem worthwhile some consideration. In that case, an account with a bank like UBS would complement well your IB account.

But I understand the wish for diversification. Not out of fear IB might go broke (and even if it does, ETFs are still yours), but geograpic/jurisdictional diversification seems a very reasonable thing to do.
Topic Author
900
Posts: 35
Joined: Sat Aug 08, 2020 1:54 pm

Re: Saxobank vs Swissqoute Luxembourg

Post by 900 »

megatron1911 wrote: Wed Aug 04, 2021 7:52 am I know what your premise is (just passive investing), but I would still think that for a portfolio your size some diversification into alts – which are not available on retail online brokerages – would seem worthwhile some consideration. In that case, an account with a bank like UBS would complement well your IB account.

But I understand the wish for diversification. Not out of fear IB might go broke (and even if it does, ETFs are still yours), but geograpic/jurisdictional diversification seems a very reasonable thing to do.
I completely agree with your recommendations but can you give me a little bit more information and examples about alts?
DXBinvest
Posts: 24
Joined: Sun Jul 07, 2019 2:42 pm

Re: Saxobank vs Swissqoute Luxembourg

Post by DXBinvest »

@900 I am not a big fan of the brokers to be honest. I prefer banks. I am currently with SQ LU but it doesn't seem to be clear where and who is the custodian of the shares held on behalf of the investors. Also with neither Platinum or Apex you get RM. It is all the same but "priority" support regardless if you have €100k, €1M or €5M invested with SQ LU.

Maybe check SC SG, they have a very good promo now waving trading (buying) fees for 12 or 24 months depending if you go for Priority or Private Priority status:
https://av.sc.com/sg/content/docs/sg-prbtrade-tnc.pdf

They also have no custody fees and each bank in Singapore is required to held the shares under separate SG entity. SC is keeping clients' investments with Raffles Nominee incorporated in 1937.
megatron1911
Posts: 34
Joined: Fri Mar 29, 2019 2:52 am

Re: Saxobank vs Swissqoute Luxembourg

Post by megatron1911 »

Private Equity (if only for the diversifying aspect – it shouldn't fare worse than your passive exposure, even after fees, and you seem to have the mindset for long term investing)
Hedge Funds (systematic CTAs complement extremely well with a passive equity PF, just as as an example)

I don't say you NEED to do it, but those products add some diversification while improving your risk adjusted return (this is not an opinion). Also, the recent past might be an exception when it comes to the success of passive equity ETFs (also depends on what share of your investment was in the US, most other markets didn't do that well).

You could very well subscribe to most of those alts without any additional bank. It's tons of paperwork, but you don't do it everyday.

Also, via bank, you usually get to subscribe with lower minimums (which might be too high, even for you) and in case of some UCITS/mutual funds you get access to the "cheapest" share classes (where you'd usually need enormous minimums, or which aren't available at all, like founder class shares..); not even mentionning products that are exclusively available to private banking customers.

Eventually, it might not be worth the hassle. Also, private banks might convince you to buy stuff you don't even need. They've become VERY good at that over the last decade, they didn't have much choice given the competition by almost free passive investing.

Back to initial point: yes, UK inheritance tax apparently is an issue, so the brokerage/bank shouldn't be domiciled there. Also goes for most investments you make there (not channel islands though), threshold is 325.000gbp if i remember well, and extends to most listed products, except OEICs and other so-called "qualifying investments". No tax advice, I might be wrong, but that's what I remember from my research.
vinvesting
Posts: 5
Joined: Fri Jan 20, 2023 6:48 am

Re: Saxobank vs Swissqoute Luxembourg

Post by vinvesting »

900 wrote: Sun Jul 18, 2021 8:52 am Hi,
I am a long-term(20+ years) passive index investor. I have an Interactive Brokers account and I invested mid 7 figures to index ETFs. I want to invest more but I want to open another broker account for diversification.

I'm not a US/EU person; that's why I don't have too many options(for example, I can't open a Vanguard account).

My main objective is safety. It looks like Saxo Bank(VIP) and Swissqoute Luxembourg(Platinum) are good options and they accept my residency. I am ok with their pricing but I couldn't decide which one is safer. Do you have recommendations, including other brokers?
What did you finally do?

I am in exactly the same situation, resident in UAE with already a part of my fund on IB so I am looking to diversify my passive investments.

I had opened in private banking with Credit Suisse but their costs are completely crazy (0.35 custody + 0.5 brokerage fees to enter and 0.5 again to get out your position).

So I was thinking about Saxo as well, is that what you did?
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