I have been trading infrequently with CommSec on ASX share for years, trade qty has been low due to buy and hold, so cost has not been a big deal, now I have started with SWS I am looking for advice on the best broker for trading ASX & US stocks as per SPA3 Investor, and ETF’s as per SPA3 Income, as advised by SWS US trading requires MOC capability, which not all platforms have. Done some research and have IB and Totality free trials. Both seem ok, IB has lots of bad reviews online and support seems to be via a call centre overseas. Fees on both seem similar and are far cheaper than CommSec international. Any feedback on either or the best alternate would be appreciated. Broker account will be set up for a SMSF.
Schwab for US, Stake for AU.
There are other threads that have lots of other brokers
I’ve been using IB for many years and found them to be absolutely fine. I’ve had no interaction with their call centre though.
Phillip, thanks for the info, I have looked at Schwab and want to try their demo account but cant find a link, any suggestions? Looking at their accounts they are all US based do they do SMSF accounts? How do you find their support if you need to call to speak with someone in the US, chat support?
I’ve used IB Australia (an Australian based entity separate from their US equivalent) for a long time and found them to be fine also. They do provide SMSF accounts, but I have had no need to interact with their call centre. When setting up your brokerage account be aware of the level of past trading experience they will require to allow you to trade leveraged ETFs. It is much more comprehensive than is required if trading shares only.
Hi Layne,
Gemini:
Schwab offers a free demo through the thinkorswim paperMoney simulator.
- Guest Pass: You can sign up for a 30-day trial without opening or funding a Schwab account.
- Virtual Funds: You start with $100,000 in simulated buying power to practice trading stocks, options, and futures.
- Full Access: If you do open a brokerage account later, paperMoney remains free to use indefinitely, though data is delayed by 20 minutes unless the account is funded.
Schwab is based in America. I run my SMSF US portfolio with them. You will need to fill out a W8-BEN-E form to get the tax concessions of 15% on dividends and 10% on monthly interest payments.
There are no buy/sell fees for shares and ETFs. The only fee is a govt. fee of 0 to 4 cents when you sell. On, say, 10-20k position sizes the fee is around 1 or 2 cents.
Once you convert and send your money, it is held in US dollars until you decide to send back.
This can be done through any reputable third party like ofx.com or worldfirst.com
Support can be through their on line message service, live chat or phone call.
Hi Layne
Your W8-BEN-E form will need to be recertified every 3 years. (I’ve just been reminded to update mine.)
If you set up an account, make sure that it is set up as a Trustee account. When mine was set up it was in my name and my auditor wanted it changed to reflect that it was not a personal account. I have a corporate trustee, so the name of the Schwab account is:
(company name) TTEE
(smsf name)
I guess TTEE is short for Trustee.
I’ve used OFX to transfer AUD to USD. I had to set up a USD account with an Australian bank (I used Comm Bank as there are no account keeping fees and it usually has a zero dollar balance) because, from memory, there are restrictions on OFX sending USD directly to Schwab. I was then able to transfer the USD from Comm Bank to Schwab.
If I remember correctly, I was able to transfer USD from Schwab to OFX who converted them to AUD and deposited them in my AUD Superfund account without going via my USD Comm bank account.
I’ve used the Schwab phone support a few times and they were very helpful. Their Australian number is 1800 781 423 and I believe they will answer that anytime between 9:30am Monday until 4pm Friday New York time. Their call centre agents are in the US.
One other thing to watch out for is that if you place a market on close (MOC) order on the thinkorswim mobile app and set it to a total dollar amount and you have that amount of dollars in your account thinking that the number of securities that will be bought will be calculated using the closing market price then you run the risk of spending more than the funds in your account because, as I understand it, what actually happens is that they calculate the number of securities to be bought at the time you place the order, using the prevailing market price at that time. If you do this more than once in 90 days your account will be restricted so that you can only place limit orders with cleared funds.
Phillip, Bill
Thanks for your assistance, I spoke with a rep from Schwab today and he was very helpful, I have set up the paper trading account and the platform is very comprehensive, but it has the critical things (MOC) that I was after. I will paper trade the SPA3 ETF’s and see how it works, cost is for trades is zero so not sure where they make there $ as a broker. Forex is $15 per transfer so this is a very cost effective platform.
Good discussion.
One point to add is that the $15 may be a one off additional charge to the spread. FX exchange costs are always in the spread, which is seldom fully disclosed.
The only way to get a close idea of what it is, is to compare the filled exchange rate at the time with the spot rate. I think you’ll find that the spread is around 1% of total amount being exchanged.
Would be interesting to hear what the Schwab rep’s answer is to this.
Phillip and Bill, I’m checking on the reasons you use OFX or Worldfirst to transfer funds to your Schwab accounts. I assume they are lower cost than Schwab. I note that an Australian bank transfer can be done to Schwab’s JP Morgan Bank Australian bank account, then Schwab converts to USD. They have told me their cost is up to 1% including the spread. That is in line with Gary’s comment above. So, do you have a lower cost way of doing it through the others? Thanks for your help.
David. I called OFX and talked to them about transferring the funds and asked them for their best rate. They were quite helpful. I also asked them the rate to transfer USD to AUD and looked at the difference. It was significantly less than 1%. I guess it depended it on the amount being transferred.
I made sure I understood what I had to do and how long it would take and then called them again when everything was in place and set up the deal. They suggesting transferring a small amount to verify the process and then after that transaction was successful, I transferred the bulk of the funds.
I’ve only done this two or three times with reasonable sized amounts to fund my US market accounts.
Hi David,
I mentioned Worldfirst because it was cheaper than anything I had looked at or used previously. Also, you can watch the prices live and try to squeeze a better price when you lock in.
Cheers, Phillip.
I’ve used ofx several times for reasons other than trading funds. Their service is excellent and their rates have always been the cheapest that I’ve been able to find at the time.
Has anyone heard of or used Tiger Broking ?
I have used OFX for multiple business transactions both ways (paying OS invoices and receiving funds) and they are very good to deal with, their online platform is very easy to use and the process of locking in a rate/deal is very quick, payments are usually received in about 3 days both ways as long as you have the paying/receiving accounts setup in your account..