Optimizing for costs with two brokers: IB and Standard Chartered Bank

For investors outside the US. Personal investments, personal finance, investing news and theory.
Sister forums: Canada, Spain (en español)
---------------
Post Reply
User avatar
Topic Author
bubbasour
Posts: 223
Joined: Thu Jul 26, 2018 10:28 am

Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by bubbasour »

Hi experts,

To spread the risk, I will be using two brokers. I've next to IB decided to use SC (SG). My question is how to most cost efficiently leverage both IB and SC, and if anyone can share their experience.

Option 1: Transfer positions to SC
SC has no custodian fee. However, there's a 0.25% trade commission. SC FX rates are not very good compared to that of IB.
SC does not charge for inward position transfers. I don't think SC supports ACATS, so I believe transfers are manual DTC(?).
IB charges $100 DWAC and $5 DRS for outward position transfers as mentioned here. Does anyone know what method SC supports :?:

The flow here would be.
Transfer SGD to IB, do a FX conversion to USD, buy LSE/IE ETFs, quarterly/6monthly transfer positions to SC.

Option 2: Use SC for everything
A more straightforward approach where I would transfer the fresh funds, SGD to SC. Use SC for FX conversion to USD with poor rates, then buy the LSE/IE ETF here with the 0.25% commission.

Would appreciate any guidance here to which of these options would be recommended especially if you've had a two-broker strategy yourself and ways you could optimize your expenses. Thx! bubba
NRA, Prefer VUAA/VUSD (VOO) and VWRD (VT), No capital gain tax.
pin
Posts: 80
Joined: Sat Aug 26, 2017 5:32 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by pin »

Hello.

I have just opened an SCB SG trading account as well and am using it for USD.

There is an epic thread on Hardwarerforum Singapore which goes into lots of details in using SCB for trading.

https://forums.hardwarezone.com.sg/stoc ... 87938.html

If you get up to Priority then trades are 0.2% and no minimum

https://av.sc.com/sg/content/docs/sg-fees-schedule.pdf

Based on the hardwareforum thread the currency spread on scb is around 0.4%. If you get up to gold on live fx I think the spread comes down to 0.2%.

For position transfers you have to use FOP method. I am in the process of trying that, so will update how it works, how long it takes and its costs.

One thing you could consider is converting currency on IB (as its pretty much spot rate) and then transferring the USD to SCB SG and then making the trades via SCB.
User avatar
Topic Author
bubbasour
Posts: 223
Joined: Thu Jul 26, 2018 10:28 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by bubbasour »

pin wrote: Fri Jan 01, 2021 5:02 am One thing you could consider is converting currency on IB (as its pretty much spot rate) and then transferring the USD to SCB SG and then making the trades via SCB.
Thx pin. I thought of this earlier and asked SC customer service, but they mentioned that transfers to the Online Trading USD settlement account must be done from a local SC account, e.g. sgd esaver account - fx convert - USD settlement account.

Can you please confirm whether this is false, and you can actually Wire transfer USD directly from IB to the SC USD settlement account?

Pardon my ignorance, but what is FOP transfer mode?

Thanks a lot for the pointers !
NRA, Prefer VUAA/VUSD (VOO) and VWRD (VT), No capital gain tax.
pin
Posts: 80
Joined: Sat Aug 26, 2017 5:32 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by pin »

bubbasour wrote: Fri Jan 01, 2021 8:14 am
pin wrote: Fri Jan 01, 2021 5:02 am One thing you could consider is converting currency on IB (as its pretty much spot rate) and then transferring the USD to SCB SG and then making the trades via SCB.
Thx pin. I thought of this earlier and asked SC customer service, but they mentioned that transfers to the Online Trading USD settlement account must be done from a local SC account, e.g. sgd esaver account - fx convert - USD settlement account.

Can you please confirm whether this is false, and you can actually Wire transfer USD directly from IB to the SC USD settlement account?

Pardon my ignorance, but what is FOP transfer mode?

Thanks a lot for the pointers !
Hi there.

I was able to transfer USD from my HSBC HK and SCB HK accounts directly into the USD Settlement account without any issues. Haven't tried with IB yet though.

If you have to use the esaver account route, why don't you set up a USD esaver account, transfer into that and then transfer internally from USD esaver to USD settlement.

Re IB position transfer, for LSE listed securities this has to be done Basic FOP Transfer. Have a look here:

https://www.interactivebrokers.com.hk/e ... p=transfer

I am in the process of doing this for the first time out of IB, so am figuring it along the way.
User avatar
Topic Author
bubbasour
Posts: 223
Joined: Thu Jul 26, 2018 10:28 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by bubbasour »

Thx pin for sharing!

I'm hoping to be able to directly transfer USD from IB to the SC USD Settlement account without any fees. Will try it as soon as I get my SC online trading account approved.

Please let me know whether it worked for you once you've tried.
NRA, Prefer VUAA/VUSD (VOO) and VWRD (VT), No capital gain tax.
User avatar
Topic Author
bubbasour
Posts: 223
Joined: Thu Jul 26, 2018 10:28 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by bubbasour »

pin wrote: Fri Jan 01, 2021 10:33 pm If you have to use the esaver account route, why don't you set up a USD esaver account, transfer into that and then transfer internally from USD esaver to USD settlement.
One more thing, I did explore this earlier and an USD eSaver requires min acc bal of $10k, which is a bit ridiculous.
I went with a SGD eSaver which has a min acc balance of $1k.
NRA, Prefer VUAA/VUSD (VOO) and VWRD (VT), No capital gain tax.
pin
Posts: 80
Joined: Sat Aug 26, 2017 5:32 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by pin »

bubbasour wrote: Fri Jan 01, 2021 11:57 pm
pin wrote: Fri Jan 01, 2021 10:33 pm If you have to use the esaver account route, why don't you set up a USD esaver account, transfer into that and then transfer internally from USD esaver to USD settlement.
One more thing, I did explore this earlier and an USD eSaver requires min acc bal of $10k, which is a bit ridiculous.
I went with a SGD eSaver which has a min acc balance of $1k.
Oh wasn't aware of that. I'm based in HK and was able to get a Priority account opened remotely through SCB HK where I am Priority (so don't need any minimum balances in Singapore). When opening I automatically got USD and HKD esaver account (along with SGD).
oldchap
Posts: 245
Joined: Mon Nov 12, 2018 7:46 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by oldchap »

Hello bubba

I'm planning on using a 2nd broker too, in order to split the risk.

I'm NRA and already using IB. Could you elaborate why your decision was to go with SC instead of other brokers like Saxo, swissquote or e*trade ? Etc.
NRA, LSE-based ETFs only | 1-fund portfolio powered by Vanguard: 120% VWRA | Following the Lifecycle Investing Strategy
User avatar
Topic Author
bubbasour
Posts: 223
Joined: Thu Jul 26, 2018 10:28 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by bubbasour »

thibaulthib wrote: Sun Jan 03, 2021 8:37 am I'm NRA and already using IB. Could you elaborate why your decision was to go with SC instead of other brokers like Saxo, swissquote or e*trade ? Etc.
I don't believe there's anything wrong with Saxo (which I was a customer of for a short period in the early days), except for 1. Custodian fee (believe it was 0.12% monthly?) and 2. poor FX rates. These were deal breakers for me.

Another way of thinking of it is that, the more you invest with Saxo, the less there's for You.
NRA, Prefer VUAA/VUSD (VOO) and VWRD (VT), No capital gain tax.
oldchap
Posts: 245
Joined: Mon Nov 12, 2018 7:46 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by oldchap »

Edited: to be deleted, new message below.
Last edited by oldchap on Sun Jan 03, 2021 8:32 pm, edited 1 time in total.
NRA, LSE-based ETFs only | 1-fund portfolio powered by Vanguard: 120% VWRA | Following the Lifecycle Investing Strategy
oldchap
Posts: 245
Joined: Mon Nov 12, 2018 7:46 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by oldchap »

bubbasour wrote: Sun Jan 03, 2021 6:57 pm
I don't believe there's anything wrong with Saxo (which I was a customer of for a short period in the early days), except for 1. Custodian fee (believe it was 0.12% monthly?) and 2. poor FX rates. These were deal breakers for me.

Another way of thinking of it is that, the more you invest with Saxo, the less there's for You.
Thanks bubba ! Great way of putting it indeed. I fully agree with you.

1) But how about account protection? I believe there is none in Singapore.
Unless SC SG protects your LSE ETF up to €20k because SC has branch in Europe? But I am not too sure...

2) How about other traders/brokers ? Have you checked swissquote/internaxx, or Zacks Trade?
ZacksTrade has 0.3% commissions fees when dealing with LSE, but since it is a 100% US-broker/dealer, it provides SIPC protection.
NRA, LSE-based ETFs only | 1-fund portfolio powered by Vanguard: 120% VWRA | Following the Lifecycle Investing Strategy
User avatar
Topic Author
bubbasour
Posts: 223
Joined: Thu Jul 26, 2018 10:28 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by bubbasour »

thibaulthib wrote: Sun Jan 03, 2021 6:59 pm Thanks bubba ! Great way of putting it indeed. I fully agree with you.

1) But how about protection? I believe there is none in Singapore. Unless SC SG protects your LSE ETF up to €20k because SC has branch in Europe?

2) How about other traders/brokers ? Have you checked e*trade or swissquote/internaxx, or others?

Ps: I also live in SG
For general broker discussion, may I suggest a new thread is created please?
NRA, Prefer VUAA/VUSD (VOO) and VWRD (VT), No capital gain tax.
oldchap
Posts: 245
Joined: Mon Nov 12, 2018 7:46 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by oldchap »

bubbasour wrote: Sun Jan 03, 2021 8:32 pm
thibaulthib wrote: Sun Jan 03, 2021 6:59 pm Thanks bubba ! Great way of putting it indeed. I fully agree with you.

1) But how about protection? I believe there is none in Singapore. Unless SC SG protects your LSE ETF up to €20k because SC has branch in Europe?

2) How about other traders/brokers ? Have you checked e*trade or swissquote/internaxx, or others?

Ps: I also live in SG
For general broker discussion, may I suggest a new thread is created please?
Thanks Bubbasour, done here : viewtopic.php?f=22&t=334746
NRA, LSE-based ETFs only | 1-fund portfolio powered by Vanguard: 120% VWRA | Following the Lifecycle Investing Strategy
pin
Posts: 80
Joined: Sat Aug 26, 2017 5:32 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by pin »

bubbasour wrote: Fri Jan 01, 2021 11:52 pm Thx pin for sharing!

I'm hoping to be able to directly transfer USD from IB to the SC USD Settlement account without any fees. Will try it as soon as I get my SC online trading account approved.

Please let me know whether it worked for you once you've tried.
So wasn't able to transfer positions from IB to SCB SG. Reason given by IB is as follows:

""In regards to your transfer request on [ ] shares of VWRA LN, please note that since Standard Chartered hold this positions in "CREST" while we hold in "Euroclear", and given that even though we could facilitate "cross-border" transfer for you but Standard Chartered claimed they do not facilitate "cross-border" transfer, we were unable to deliver the positions over to their end. In short, your transfer was unable to be processed due to "clearing issues". Apologies for not notifying ahead of time as we were advised that the receiving end would explain this to you. Should you have any questions, please feel free to contact us."
User avatar
Topic Author
bubbasour
Posts: 223
Joined: Thu Jul 26, 2018 10:28 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by bubbasour »

pin wrote: Wed Jan 20, 2021 8:39 pm So wasn't able to transfer positions from IB to SCB SG. Reason given by IB is as follows:
Thanks a lot pin for coming back and sharing your experience. It speaks for itself what kind of broker SC-SG is. I'm surprised they were that inflexible.
I did google CREST and Euroclear and it seems like CREST is owned by Euroclear.

Another limitation on the SC platform is that they don't seem to be able to change the base currency of trading account to USD. It gotta be SGD. If you hold USD assets, it will obviously be indicated in parentheses, however reporting, bottom lines will be SGD which is misleading. I asked them to feedback this to their product team.

Last resort is to sell and move the cash, but that will imply several fees on both sides and possibly an intermediary as well. If possible I would just keep whatever is in IB and start using SC from a clean slate ie transfer funds, use their live-fx to get usd in the usd settlement account, then buy.
NRA, Prefer VUAA/VUSD (VOO) and VWRD (VT), No capital gain tax.
pin
Posts: 80
Joined: Sat Aug 26, 2017 5:32 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by pin »

bubbasour wrote: Thu Jan 21, 2021 7:33 am
pin wrote: Wed Jan 20, 2021 8:39 pm So wasn't able to transfer positions from IB to SCB SG. Reason given by IB is as follows:
Thanks a lot pin for coming back and sharing your experience. It speaks for itself what kind of broker SC-SG is. I'm surprised they were that inflexible.
I did google CREST and Euroclear and it seems like CREST is owned by Euroclear.

Another limitation on the SC platform is that they don't seem to be able to change the base currency of trading account to USD. It gotta be SGD. If you hold USD assets, it will obviously be indicated in parentheses, however reporting, bottom lines will be SGD which is misleading. I asked them to feedback this to their product team.

Last resort is to sell and move the cash, but that will imply several fees on both sides and possibly an intermediary as well. If possible I would just keep whatever is in IB and start using SC from a clean slate ie transfer funds, use their live-fx to get usd in the usd settlement account, then buy.
In all fairness SCB's share trading platform is better than the share trading platforms of many banks in Hong Kong.

Also I have generally found that bank share trading platforms are limited. They are not trying to target sophisticated traders, that is not their key demographic. If you want that, probably best stick to the likes of IB. What you get with trading with a bank is safety.

Also I'm not surprised that SCB Singapore will show the AUM in SGD. I have a DBS Hong Kong trading account and they do the same, even though all my shares with them are in USD, the AUM is shown in HKD.

With SCB SG, you may still find it beneficial to convert your money via IB, as their rates are still much better than SCB live fx, and then send it to SCB SG once converted. This obviously works better for larger amounts, if its smaller amounts probably best sticking with sCB live fx.
glorat
Posts: 1041
Joined: Thu Apr 18, 2019 2:17 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by glorat »

pin wrote: Thu Jan 21, 2021 7:11 pm With SCB SG, you may still find it beneficial to convert your money via IB, as their rates are still much better than SCB live fx, and then send it to SCB SG once converted. This obviously works better for larger amounts, if its smaller amounts probably best sticking with sCB live fx.
Digging up an old thread... has anyone done this? One potential catch is whether there is going to be some SWIFT wire fee transferring from IB to SC Singapore USD. Some $25 might be a not worthwhile compared to whatever the SC FX spread is
User avatar
Topic Author
bubbasour
Posts: 223
Joined: Thu Jul 26, 2018 10:28 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by bubbasour »

Just wanted to add that I've been able to transfer IE ETF successfully from IB to SC-SG.
No outward share free, nor inward fee.

So I believe if you really wanna optimize you can go through then motion of funding IB, fx convert, buy share, transfer share to SC.

However I believe commissions and execution prices on SC platform are expensive so if you plan to keep the stock for a long time and spread the risk of having more than one broker it may still be a good idea.
Bubba
NRA, Prefer VUAA/VUSD (VOO) and VWRD (VT), No capital gain tax.
pin
Posts: 80
Joined: Sat Aug 26, 2017 5:32 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by pin »

bubbasour wrote: Fri Mar 18, 2022 11:34 pm Just wanted to add that I've been able to transfer IE ETF successfully from IB to SC-SG.
No outward share free, nor inward fee.

So I believe if you really wanna optimize you can go through then motion of funding IB, fx convert, buy share, transfer share to SC.

However I believe commissions and execution prices on SC platform are expensive so if you plan to keep the stock for a long time and spread the risk of having more than one broker it may still be a good idea.
Bubba
Thanks for that. Can you set up what you did?
dr.otter
Posts: 3
Joined: Thu Apr 21, 2022 6:15 pm

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by dr.otter »

bubbasour wrote: Fri Mar 18, 2022 11:34 pm Just wanted to add that I've been able to transfer IE ETF successfully from IB to SC-SG.
No outward share free, nor inward fee.

So I believe if you really wanna optimize you can go through then motion of funding IB, fx convert, buy share, transfer share to SC.

However I believe commissions and execution prices on SC platform are expensive so if you plan to keep the stock for a long time and spread the risk of having more than one broker it may still be a good idea.
Bubba
Hi @bubbasour,

Thanks for sharing. I'm in a similar situation, and keen to know more.

How long did the process take?
Can you kindly share an overview of the process please? ...e.g. who did you contact first (IB or SC-SG), what documentation/validation is required, did you submit your request to SC-SG's customer service or a specific department, etc ?

Thanks in advance!
glorat
Posts: 1041
Joined: Thu Apr 18, 2019 2:17 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by glorat »

Bumping this thread again... I want to try to attempt this shortly so any tips are welcome.

For my personal context, I believe in holding assets in a second broker to mitigate the risk that one of the brokers freezes up for whatever reason and I need funds. I had so close my backup broker recently (during which time my assets were defacto frozen for a while due to administrative reasons, which reinforces my belief). SCB seems and excellent backup broker since there are no custody fees so just need to get some assets there cheaply
User avatar
Topic Author
bubbasour
Posts: 223
Joined: Thu Jul 26, 2018 10:28 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by bubbasour »

Yes, SC is ok. I don't like the UI but it's OK for backup broker or spreading the risk. I've successfully transferred LSE positions both ways between SC and IB.
NRA, Prefer VUAA/VUSD (VOO) and VWRD (VT), No capital gain tax.
glorat
Posts: 1041
Joined: Thu Apr 18, 2019 2:17 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by glorat »

bubbasour wrote: Sun Jan 22, 2023 7:50 am Yes, SC is ok. I don't like the UI but it's OK for backup broker or spreading the risk. I've successfully transferred LSE positions both ways between SC and IB.
Thanks for your confirmation!

I submitted my request to both IB and SC to move a position across and it eventually went through just fine. I feel better having several months of expenses worth of bonds sitting in SC as my backup broker :)
Curny
Posts: 28
Joined: Fri Mar 17, 2017 9:09 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by Curny »

Hi - Standard Charter SG was mentioned above, is it actually based in SG? Another option to de-risk is to have a broker outwith China in the event of assets being frozen for all CN/HK brokers. Does SC-SG allow a client to operate outside the country or is it just a dumping ground for assets?

Interested to understand if anyone in the community has similar thoughts and whether the research has already been completed.
glorat
Posts: 1041
Joined: Thu Apr 18, 2019 2:17 am

Re: Optimizing for costs with two brokers: IB and Standard Chartered Bank

Post by glorat »

Curny wrote: Tue Jul 04, 2023 7:49 pm Hi - Standard Charter SG was mentioned above, is it actually based in SG? Another option to de-risk is to have a broker outwith China in the event of assets being frozen for all CN/HK brokers. Does SC-SG allow a client to operate outside the country or is it just a dumping ground for assets?

Interested to understand if anyone in the community has similar thoughts and whether the research has already been completed.
SC SG is based in SG. I expect you can only open a trading account there if you are resident there. I don't know if you can operate it after you leave SG.
Post Reply