Brokerage fees

[swx]

Stock market transaction cost: Hello,
For the sake of rationality, I only use 3 currencies for my transactions – CHF/EUR/USD, each with their respective stock exchange: Swx, Xetra, New York Stock Exchange:
I sometimes make transactions in other currencies, but using only one of these exchanges:
Finnish stock type, traded at XETRA,
Canadian stock on the New York Stock Exchange.

The shares I buy are also traded on one of the exchanges mentioned
Does doing this result in high bank charges that would be a deterrent?

[swx]

Hello Pat Jac –
Postfinance: to my knowledge, for a non-resident to open an account, the following three conditions must currently be met:
– Receive a Swiss income: such as AVS or Pension Fund, or a salary
– Special ties with Switzerland – (From what I understood from the family for example)
– Be able to prove that you have enough regular income yourself to live on –

[Jeff]

Hello,

Personally, I'm with Postfinance and I think it's pretty good.

No deposit fees, no money transfer fees and no custody fees.
A hotline until 10 p.m. which always answered my questions and 3 accounts in CHF, € and $ are automatically opened.

They just collect on the transaction fees (around 1% on a 5000 CHF trade).
But for Buy and Hold strategies it remains correct.

What is especially funny is that it is the Banque Cantonale Vaudoise which manages all the e-trading accounts and deposits of PostFinance as custodian bank (until the end of 2015, after which it will be Swissquote).
I was interested in it for a while and the rates charged at the time by BCV to its own customers are much less attractive than for Postfinance customers :o)

[Chris212]

I myself am with Swissquote as well as a trading account abroad: Binckbank Belgium

Binckbank because there are no management fees and the transaction fees are ridiculous 10 euros on the NYSE and 13 euros on all other markets (except Swiss and Scandinavian 30 euros) for amounts up to 5000 euros.

They even give me free trades or trade discounts depending on the number of trades made.

In short, so far Swissquote Buy and Hold and Binckbank to do a little more intensive trading.

I would now like to repatriate everything into a single trading account for obvious visibility reasons and for tax reasons (I believe it is impossible to recover dividends from foreign accounts).

I don't know yet which trading company to turn to. Saxo Bank has a more diversified offer (especially in terms of market places (Singapore!)) but charges 100CHF if no trading during the semester + custody fees (since January 1, 2015) of 5CHF per month...
Postfinance are apparently the only ones not to charge management fees (but when will it pass into the hands of Swissquote?)
On the other hand, no exotic financial center (Singapore), no forex.

[Earnie]

There are so many parameters to take into account for a novice. From what I have read, being already a Postfinance customer, the easiest thing for me who wants to do buy and hold would be to open an e-trading account with them. As I plan to buy initially on SIX and NYSE, that will do it.
I went to take a look at Swissquote but I don't find the interface very user-friendly or very intuitive, I'll get started as soon as I have a little more experience for medium-short term trading.
Regarding taxation, does Postfinance establish a document with the summarized positions and dividend gains? Otherwise, I will delegate this job to my trustee…
For each title, is there a breakdown of the dividends received? How are they reinvested?
I admit I don't really know how to start.
Thank you for your answers.

PS: what is a Lombard loan?

[Jerome]

Postfinance can provide a tax statement (summarized positions and dividend earnings), like any bank. But it costs a lot. I asked the question at the time, I don't remember the price quoted, but it was clearly not worth the price. So I decided to process it myself, position by position. It takes a little time, but the job is made easier by the tax software provided by the cantonal administrations (VStax for example will automatically download the prices as of 31.12 and the dividends received from quite a few securities).
Dividends are not reinvested, they remain in the account of the corresponding currency.
Lombard credit consists of pledging some of these securities, in return for which the nice bank will lend you cash to buy other securities… This allows you to have a leverage effect because with less cash available you can buy more shares. All this is fine, as long as the value of the securities pledged does not fall… but when it does, hello damage => your cash balance will melt until it is necessary to add cash to cover your positions, otherwise the securities will be automatically sold by the bank. In short, it is highly speculative and I do not recommend it.

[Earnie]

OK for the tax statement. I will look with the trustee to see what they propose. It must be something of this ilk, a small software. So we have to declare "by hand" all our securities, and the software does the rest?

So the dividends accumulate nicely in the account over the years? In the graphical interface, we see the distinction of the securities, with for each security the accumulated dividends? And all this is added up with the value of the securities at time T + the dividends accumulated up to time T?

Thanks for the explanation of the Lombard credit. Indeed, I had already vaguely heard about the leverage effect in the stock market. I am currently using it for the farm that we are renovating which will include 6 apartments (another pillar of dividends that I am setting up for the inheritance)

[Jerome]

Yes, for the software, that's sort of it. Except that not all titles are recognized. So for some, you also have to enter the dividends and the value manually.
Yes, dividends accumulate on CHF, EUR or USD accounts and are used to buy other shares. Or if you are lucky enough to be further along in the process, to live off your income.
I didn't understand the following questions, are you still talking about Postfinance? I'm lost...

[Earnie]

Yes indeed, that would be Postifinance, but that's because I have trouble practically visualizing dividend management. Sorry if my questions are not clear, you're not the first to raise communication problems with me :). My question to summarize, is to know if via the Postfinance interface, it is possible to see and take a "photo" at any time that one wishes of the status of the securities and dividends, in very distinct and understandable ways. For example, the swissquote interface, I find it very complicated for a beginner. Thank you for your understanding

[Jerome]

uh… yes… you log in and you can see your status of the securities… ??? you can also see the history of the dividends that come into your account…
I still don't understand...what is the point
Postfinance is not complicated, just a little confusing I find

[Earnie]

Well, forget it ;), I think that it is by practicing and navigating in the interface that I will learn it and that I will make it a good tool. And there is always the possibility of having help, which is quite efficient at Postfinance. Besides, I saw that it would now work (mid 2015) with swissquote for deposits? I imagine that this does not change anything for customers.

[Jerome]

Yes, but I don't know if the interface, brokerage fees and especially deposit fees will change.

[Earnie]

Ouch yes of course, there are still these parameters to check… I have already opened my e-trading account with postfinance, since I have been a customer for a long time, but I will wait patiently for the transition to see the impact on these fees.

[Mystic]

For my part, I have several accounts:

– Postfinance (great for hold&buy) but does not announce your name in the shareholder register abroad. So no voting rights but dividends are still paid

– DKB.de: German site with non-existent custody fees. Just ridiculous transaction fees (10 EUR). Cons: when you sell a security, the money is not immediately in the account but within 48 hours and it is cheaper than on the German market (Xetra, Frankfurt, Berlin, Hamburg, Munich, etc.)

– Fortuneo: French site that also offers free deposit. Not tried yet, because in the meantime, the stock market has become very volatile. cheap on the French, Belgian and Dutch market.

I am looking at VZ Bank because the deposit fees are quite low and the transaction fees are flat regardless of the amount. We have more markets available.

Another possibility: cash.ch (partner of bank2plus). They speak French. Fixed deposit fees of 80 CHF per year up to 100,000 and flat rates for transaction fees: http://www.cash.ch/fr/banque/placements/fonds-de-placement/conditions

[YaPasPhoto]

Hello Jerome,
Hello everyone,

I read with interest the whole thread and especially the messages from dom67 relating to CornèrTrader.ch.

Is there any user here who has experienced CornèrTrader for a stock portfolio?

At first glance, CornèrTrader seems attractive according to the comparison established by MoneyLand and the display of transaction fees found at the bottom of this page.
https://www.cornertrader.ch/fr/accounts/commissions/

User dom67 was also able to obtain additional information which was rather reassuring, but which unfortunately does not appear on the CornèrTrader website.

But be careful, not everything seems rosy.

The points that seem interesting to me about CornèrTrader:

1) This service is offered by a real bank in Switzerland, Cornèr Bank.

2) Brokerage fees as a percentage and not as a flat rate, which is interesting for buying or selling small volumes and therefore increases the liquidity of the deposit.

3) No fees for inactivity, which seems like the least I can do, but unfortunately is not the case everywhere.

4) There are indeed fees for converting to cash, as well as fees for closing an account, but these seem reasonable to me for now.

5) I have the impression that Cornèr Bank "wants" to strengthen its presence in this trading activity, which leads me to believe that its rates could remain attractive as long as it seeks to increase its market share in this activity.

6) There is apparently no deposit fee, but this information seems to be missing from their site.

The gray areas and the minuses:

1) The TradersCard seems to be the only way to withdraw funds; the website seems to be completely silent about the fees for withdrawing cash from ATMs using the said VISA card. Since the credit/debit card business seems to be another strategic pillar of Cornèr Bank, one can imagine that the bank can easily make its customers captive to its trading platform. All it needs is a high fee for card withdrawals.
I guess that's the kind of nasty surprise you can find out about after the fact...

2) The CornèrCard is payable from the second year. (40.- Frs/year)
Yes, you shouldn't dream; see the little asterisk on this page:
https://www.cornertrader.ch/fr/accounts/account-comparison/index.html
I guess the card is imposed with the account, but it's not clear.

3) As another way to transfer money from your CornèrTrader account, bank transfer is also offered, but this seems a priori quite folkloric when reading the CornèrTrader FAQ: "(…) You can also send us an e-mail or contact your account manager who will take care of transferring your money as soon as possible.". It may work very well, but let's say that a priori the fact that they offer e-mail as a contact method really freaks me out. As for the account manager, you have to have a lot of trust to be sure to be able to reach him when the time comes, and if possible in a way other than by e-mail.

4) It is not mentioned whether one can "back" one's CornèrTrader account with a bank account (from Cornèr Bank, so that the amount of shares resold would fall directly into the current/private/savings account. (cf. as at Migros Bank for example) A priori, I would say no, but I have not tested it.

5) Account statements: CornèrTrader distinguishes between “Account statements sent” at CHF 50
and the “Account Statement”, also at CHF 50, while specifying that it is a generic profit report which cannot be considered as a valid tax declaration.
This is a bit puzzling.
It is not clear whether these documents are sent automatically. At first glance, it seems that for "Account statements sent", this is only done on request.
On the other hand, how does it happen at the beginning of January: does CornèrTrader automatically send a letter for 50 CHF with the status of the deposit account as of December 31?

6) Printing transactions (purchase/sale): this seems to be left to the user as a self-service.

Now I would like to share my experience with Migros Bank and its securities trading platform.

1) The 40 Frs flat rate brokerage fee is a false bargain for most purchases and sales of securities, unless you are buying or selling large volumes in one block.
Even if you have acquired a lot of shares at once, you may want to sell only part of them at a given time. Or on the contrary, increase your position on a share. These 40 franc packages that accumulate quickly become prohibitive.
If you buy 1,000 francs worth of shares at once, and assuming that you sell everything at once, the two times 40 francs will make 80 francs, or 8%. That's not nothing!
Not to mention that each transaction generates other costs (stamp duty and brokerage fees).

2) The flat-rate fee of CHF 40 for Migros Bank securities trading may become completely disproportionate in the event of partial execution of the order, as it is then charged in full (and not in proportion to the percentage of the order that could be executed).

Example: A price is at say 1.55 currency units per security, say CHF.
You want to buy 10,000 shares with a price limit of 1.50 currency units per share, i.e. CHF 15,000, within a given period.
The flat rate of 40 CHF would therefore correspond to a commission of 0.27%; great, you say.
The share price fluctuates and momentarily falls below the threshold of 1.50 that you have set for yourself.
Migros Bank therefore buys securities on your behalf, but only manages, say, to acquire 5 of them, because despite its fluctuations, the price of the security remains generally above the threshold that you have set, except at a given moment which does not allow you to acquire the desired number of securities.
Result: you end up with 5 securities (shares) at CHF 1.50, i.e. a position of CHF 7.50 and a commission of CHF 40 charged in full, plus other costs! If you want to resell these 5 securities, you will again be subject to the flat rate of CHF 40. Hello business!
All you have to do is increase your position on the stock and pray that the stock performs well to erase these nasty fees.

3) Migros Bank sends a notice for each security purchased or sold, which is appreciable.
Migros Bank sends a statement of assets at the end of the year, with a summary of the amounts in bank accounts (private, savings, etc.) and deposit positions (securities).
For foreign securities, the currency rates as of December 31 are mentioned, which is convenient.
These statements have a clear layout.

PostFinance:

The fees for stock trading seem attractive, but I haven't tested their brokerage platform.

On the other hand, for bank account management, my experience of the e-Finance platform is very negative (forgive me for deviating a little from the subject):

1) writing that is difficult to read both on the screen and on paper statements:
– texts are switched to capital letters, making them difficult to read
– no graphic highlighting of important elements
(e.g. in bold as is the case at Migros Bank,
both for the e-banking platform and on paper statements)

2) Disastrous payment history browsing:
“Previous” and “Next” buttons requiring countless clicks
while Migros Bank offers real “pagination”
with numbers “1”, “2”, “3”, …, “4”, …
allowing you to more easily go back through the transaction history,
although a pagination displaying the names of the months would still be preferable.

3) insufficient possibility to go back in history at PostFinance: only 15 months
even for a commercial account, which is hell if you file your tax return after March, for example...
At Migros Bank, you can go back 2 years (24 months) in history.

4) Unable to search for past payments by keywords.
(Migros Bank's e-banking, on the other hand, does allow this, although the search functions could still be pushed much further.)

PostFinance only allows searching by recipient account number and you still need to know the approximate amount transferred. But typically if you know the name of the recipient of a bank account, you don't necessarily remember their account number. This search functionality is therefore almost unusable in practice.

5) At PostFinance, it is impossible to display or hide the details of the entries
e.g. communications to the payment recipient
(Migros Bank e-banking allows you to display or hide the details of the transactions.)

6) Numerous errors when ordering payment slips.
(misspelled town name, wrong town from several years ago, etc.) A lack of seriousness that is frightening...

I look forward to reading your feedback on trading securities at CornèrTrader and PostFinance, also regarding the usability of the site and the quality of the statements.

[Author]

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