Brokerage Battle: Saxo Capital Markets versus TD Direct International

battle

I just finished reading a fabulous book, Why I Left Goldman Sachs.

Long-time employee, Greg Smith, left the firm after he watched the culture corrode.  

More than ever, the firm started to go after fees at the expense of relationships. Clients got screwed. They were called Muppets.

Never forget that banks and brokerages exist to make profits—not for you, but for their firms.

And that’s OK. But as consumers and investors, we can vote with our feet.

In late 2014, I published The Global Expatriate’s Guide To Investing.

At one point, I mentioned the brokerage firm, Saxo Capital Markets. Overall, they’re a very good firm. But my book led people astray.

And to sound like a teenaged kid, it wasn’t my fault.

In the book, I quoted a Senior Manager at Saxo Capital Markets, in Singapore.

I interviewed him in March 2014. He said that the firm would soon roll out a 0.2% annual charge later that year.

Here’s a passage from the book: “The fee, according to Mr. Eoh, would likely be waived on a ‘case-by-case basis.’ When I asked for clarification, he suggested that accounts exceeding values of $500,000 would be exempt.”

My portfolio value exceeded that amount. So I signed up for an account.

After reading my book, many expats followed.

A few months later, Saxo Capital Markets slapped me with the fee. It doesn’t cost 0.20%. It costs 0.12% per year.

But it was a bitter pill to swallow.

Despite my pleas for the firm to stick to their word, they said there was nothing they could do about the added charge.

This was an unusual step for a brokerage to make. Most of the world’s brokerages are slashing costs.

Saxo Capital Markets, in the face of steep competition, chose to raise fees instead.

TD Direct International, based in Luxembourg, went the other direction.

They reduced their account fees, making them a much cheaper option than Saxo Capital Markets.

They also reduced their trading fees.

TD Direct International Trading And Account Fees

Competitive commissions on 18 International Exchanges

td-direct-fees

 

Source: TD Direct International

Saxo Capital Markets maintains low trading fees that are comparable to those at TD Direct International.

But Saxo’s annual 0.12% account fee is a killer for large accounts.

Impact of Account Fees On Portfolios

Assuming No Trades For The Year

Account Size

Saxo Capital Markets Annual Fee

TD Direct International Annual Account Fee

$200,000

$240.00

$196.43

$500,000

$600.00

$196.43

$1,000,000

$1,200.00

$196.43

$2,000,000

$2,400.00

$196.43

$5,000,000

$6,000.00

$196.43

*Fees converted to U.S. dollars

*Sources: Saxo Capital Markets; TD Direct International

If investors choose to invest at least once per quarter, TD Direct International becomes an even better deal.

Impact of Account Fees On Portfolios

Assuming At Least One Trade Per Quarter

Account Size

Saxo Capital Markets Annual Fee

TD Direct International Annual Account Fee

$200,000

$240.00

$109.13

$500,000

$600.00

$109.13

$1,000,000

$1,200.00

$109.13

$2,000,000

$2,400.00

$109.13

$5,000,000

$6,000.00

$109.13

*Fees converted to U.S. dollars

*Sources: Saxo Capital Markets; TD Direct International

TD Direct International is impressive. Its platform is far easier to use, compared to the one at Saxo Capital Markets. On the website, its brokerage and account fees are also far more transparent.  Just don’t let TD Direct International change your currencies from one to the next.  Switch your money to the desired currency first.  Otherwise, the bank will hit you with a foreign exchange spread as high as 1.5%.

Should You Switch?

If you are interested in switching your money from Saxo Capital Markets to TD Direct International, it’s easier than you think.

  1. Call TD Direct International at 352 2603 2003
  2. Tell them that you would like to open an account with them
  3. Let them know that you would like to transfer your Saxo Capital Markets holdings to TD Direct International
  • TD Direct International will ask you to fill out some online forms.
  • They will also ask you to fill out some paperwork that you’ll need to sign and snail mail.
  • You’ll need to send a certified copy of your passport from a notary (this costs $25 to do in Singapore).
  • They will then ask you to fill out a transfer form, so they can move your investments from the other brokerage to TD Direct International.

This transfer will take 3-4 weeks. You won’t be able to trade during this time.

Many investors prefer Standard Chartered’s brokerage. They provide access to a variety of stock exchanges. Clients, from feedback they have given me, seem to like this brokerage. Unfortunately, Standard Chartered doesn’t provide access to the Canadian stock exchange.

Their trading fees are also high.

Standard Chartered versus TD Direct International

Annual Commission Fees, Assuming 12 Trades Per Year Off The UK Market

Amount Traded Per Month

Standard Chartered

Annual Brokerage Fees

TD Direct International

Annual Brokerage Fees

$1000

$300.00

$195.72

$2000

$600.00

$195.72

$5000

$1,500.00

$195.72

$10,000

$3000.00

$195.72

Sources: TD Direct International; Standard Chartered

Other Costs To Consider

Investors should look into wiring costs before making decisions. They should also realize that some brokerages might be cheaper for smaller accounts and deposits, while those same brokerages lose their luster when an account value grows.

It’s your decision to make. But always remember. If you invest with one brokerage now, it’s always easy to make a switch. Doing so could save you thousands.

 

 


andrew hallam

andrew hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (Wiley 2011) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use.

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94 Responses

  1. Nicholas Stone says:

    I don’t think Standard Chartered have any annual fee. You have to maintain $1000 in a current account with them or pay $5 a month. Their commissions are a flat-rate 0.25%.

    • That’s correct Nicholas. But their 0.25% commission rate is very high for those depositing large sums.

      • David Simpson says:

        0.25% trading commissions should be a non-issue for a buy and hold investor.

        • Hi David,

          Thanks for your comments. I find them pretty confusing, however. If you have time to articulate them clearly so people can understand what you are saying, that would be super.

          Thanks,
          Andrew

          • David Simpson says:

            Andrew;
            Not sure where you are confused with my comments…are you unfamiliar with the term ‘buy and hold’ or the issue of ‘non-resident alien’ and ‘Non-US Situs assets’ as they apply to US Estate tax? I think I read an article you wrote discussing these items. , Dave

          • Sorry David. Your entire comment obviously didn’t get posted. This is the comment that I can see:

            “0.25% trading commissions should be a non-issue for a buy and hold investor.”

            I don’t know what it pertains to.

            Cheers,
            Andrew

  2. Leon says:

    Hmm seems to me that despite the lower rates, TD direct does not have a wide array of products for eg. FX and options.

    I personally like a variety of investment products to choose from. The fees don’t really matter as long as they are reasonable since my profits will outweigh those anyway.

  3. Mark says:

    Hi Andrew,
    Looking into this. Do you know if Saxo charges for transferring holdings to another brokerage? Have you looked into the actual trading platform for TD International…does it have a full list of ETF index funds? I know this would save money over time so interested in doing this.

  4. David Simpson says:

    Andrew:
    I’m a former client , when 0% custody fees

    You may suggest these 3 low cost alternatives
    https://www.cornertrader.ch/en/
    https://www.keytradebank.lu/en/our-fees/
    Plus Charles Schwab International accepts most non-US resident aliens, free debit card, but only US Stocks/ETFs creating possible US Estate issues

    PS: Saxo founders, Lars and Kim, have some serious negative baggage
    Plus they have a private corporate jet .. not a good sign!

  5. David Simpson says:

    Forgot ,the obvious choice , Interactive Brokers (IB) – combined with a Schwab International account &debit card.
    Able to hold non-US situs assets with IB and access to cash with a debit card (no annual fee, refund of ATM fees, tight FX translations)

  6. Rowan says:

    Hi Andrew,

    Thanks for this article – I chose to open an account with TDDI based on the recommendation in your book, and now I’m glad I did! Just one quick question though. You say:

    “Just don’t let TD Direct International change your currencies from one to the next. Switch your money to the desired currency first. Otherwise, the bank will hit you with a foreign exchange spread as high as 1.5%.”

    I get paid in USD that goes into a USD account (I live in Switzerland), so I can get my money to my TDDI USD account without incurring any exchange costs. If I want to buy ETFs on the TSX (I’m Canadian) through my TDDI account , how do I avoid the forex spread you mention above? Do I just buy the shares in USD, or do I need to convert my money to CAD first?

    If the latter is the preferred option (i.e. CAD is the “desired currency”), what is likely to be the cheapest way to “switch my money to the desired currency first”? I assume that moving money between my different currency accounts at TDDI will incur the excessive charge…

    Thanks for your help!

    Rowan

  7. Michel Xhauflair says:

    Interesting to compare Keytrade Luxemburg and TD Direct International
    https://www.keytradebank.lu/en/investing/investing-comparison/

  8. Darren says:

    Hi Andrew,

    I’ve exchanged conversations with you before as I had originally sought advice about a Friends Provident account last year. I’ve since removed what funds I could without penalty and have started my TD Direct account. I am currently only running three ETF’s with the % allocation you suggested. These are HXT, VXC and VSB. I’m an expat Canadian living in the Middle East but will be moving to SE Asia for a new position soon. Would it be fair to assume that these are good choices or are there other ETF’s you recommend instead? How long should I assume to be holding these three; 10 years, 20 years, more? What happens if a fund closes?

    Glad to be in charge of my own money these days. Liberating indeed. Thanks for your help and guidance!

    Sincerely,

    Darren

  9. Raghu says:

    Hi Andrew-

    I am a Canadian expat based out of Singapore. The passive index portfolio I wish to build includes ETF’s in Canada and UK. In your excellent book, you had mentioned 0.2% annual charges with TD…and if I am understanding this post right those fees have since been reduced? With that, can you also please share an updated view on cost comparison of TD to DBS Vickers (for Canada & UK ETF’s)?

    Also, how to think about counter-party risk for TD? Since I am in Singapore today, I feel comfortable with DBS being a big bank and my money being in Singapore.

    Thanks Andrew!
    Raghu.

  10. Raghu says:

    Hi Andrew-

    I wasn’t sure if my posted question went through the system so posting again. Apologize if it came twice.

    I am a Canadian expat based out of Singapore and am looking to build a portfolio with Canadian and UK ETF’s. In your excellent book, you had mentioned 0.2% annual account charges with TD, am I to understand with this post that those charges have since gone down? if so, would you also please share an updated cost comparison between TD and DBS Vickers as well (for Canada and UK ETF’s)?

    Also, how should I think about counter-party risk with TD? I am in Singapore so obviously comfortable with DBS being a big bank in Singapore and having MAS oversight.

    Thanks Andrew!
    Raghu.

    • Hi Raghu,

      TD Direct International has lowered its fees. It’s also an easy brokerage platform to use.
      You don’t have to worry about counterparty risk when buying physical ETFs. That only applies to synthetics, also known as swap based ETFs. Your broker doesn’t own your ETFs, so choosing between one brokerage and another (if concerned about counterparty risk) doesn’t apply.

      Cheers,
      Andrew

  11. Jen says:

    Andrew, do u think it lowers a risk if one has 2 brokerage platforms-like saxo and td direct? I mean with regards to the risk of the brokerage and the custodian going bankrupt (not the ETFs as of course they r the same no matter which brokerage one uses). Like what if saxo and the custodian for saxo went bankrupt(unlikely I know bcos that is what the custodian is for) at least one might still have half one,s investments elsewhere. Or am I still thinking too much a person who invests with active funds and goes with different companies to “spread the risk”?

  12. Darren says:

    Andrew,

    Would you recommend holding HXT, VXC, and VSB as my three ETF’s with TD Direct international or do you recommend better options?

    Darren

    • Hi Darren,

      I don’t know your nationality, nor your tolerance for risk, so I can’t do your question justice.

      Cheers,
      Andrew

      • Darren says:

        Andrew,

        Sorry, I am a 38 year old married Canadian and living in the Middle East soon to move to SE Asia. Have my TD International account started and am currently holding HXT, VXC and VSB. They aren’t the same that I’ve read you hold so I’m just wondering if I could do better. Risk tolerance would be of the acceptable level as I know I will always be holding the appropriate allocation of bonds.

        Darren

        • Hi Darren,

          This looks good, if you are comfortable with a swap based product, such as HXT. It’s higher risk than holding physical shares in an ETF, as I mentioned on pages 231-232 of my expat book. http://bit.ly/globalexpat

          The swap based product adds risk. But I’m good with this portfolio if you are 🙂

          Cheers,

          Andrew

  13. Ken says:

    I would not worry about HXT. It is not an exchange traded note, but an etf……so there is no risk at all to your capital. The counterparty risk does not apply at all to the principal…..it is limited to a maximum of 10% of gains only.

    Futhermore, National Bank is not likely to go bankrupt…..it is doing very well. Once the gains exceed 10%, Horizons has to find another counterparty.

    HXT has become a standard not only with individual investors, but also with pension funds. The mer is rediculously low (discounted from .07% to a negligible .03% at the moment) and it is tax advantaged for non-registered accounts. Also, unlike other funds, there is no tracking error as it must reflect the TSX 60 exactly. You get all the returns of the dividends each year without paying tax on them, and when you do sell, your total gains are considered capital gains and so receive the best tax rate.

    National bank takes no cut and provides a stable third-party. I am happy with the risk.

  14. John says:

    Hi Andrew,

    What is your opinion on these Vanguard ETFs (in Hong Kong)?
    https://www.vanguard.com.hk/portal/mvc/investments/all-products

    They’re quite new (started in 2014/2015) and I notice the following in the factsheet:
    “The Fund invests in financial derivatives instruments (“FDIs“), which are more sensitive to changes in market prices of the underlying assets, and investing in FDIs may expose investors to a higher degree of fluctuation and the Fund may be exposed to credit risk on the counterparties with which it trades FDIs”

    Now I am quite a newbie with ETF investing, and hearing the term Derivatives worries me a little bit because I understand these don’t hold actual stocks.

    I am interested in these because I am earning my current salary in Hong Kong Dollars, have a Standard Chartered HK Account with ability to buy stocks on the SEHK exchange and China Exchange at pretty low rates. This appeals to me is that I don’t have to do any currency conversion in depositing or withdrawing using this ETF, the costs are much lower than if I did the same through TDI.

    What do you suggest?
    1.Accumulate these Vanguard HK ETFs (I’d probably look at 50% S&P, 10% Japan, 10% Asia and 30% Europe to get a reasonably diversified portfolio) on my local brokerage account without any currency conversion.
    2. Convert the money, send to my TDI account and invest in ETFs on the British exchange (I invest VWRL on the UK exchange at the moment for my equities ETFs).

    Note I am British and Australian. By the way, really great book!

    Thanks in advance,
    John

    • Hi John,

      These will save you money on currency transactions. But these are synthetic ETFs. In Canada, we called them Swap Based ETFs. I wrote about Swap Based ETFs in my expat book under the Canadian section. Risks are lower with physical share ETFs. With a synthetic product, you don’t really own the shares. You just have a promissory note from the third party (which isn’t Vanguard) that you will get the returns of these indexes. I own two such ETFs trading on the Canadian stock exchange. The third party is the National Bank of Canada, so I am comfortable with the added risk. But despite the fact that they are more tax efficient (and therefore slightly more profitable) I ensure that the bulk of my portfolio is in traditional, physical ETFs. I’m not 100% comfortable taking on the added risk for my entire portfolio. The decision is yours. Think of the slight upside. Think of the slightly heavier downside. And find out what the third party is. Are you comfortable with it? I know many people who aren’t comfortable with anything except physical shares. And their points to that argument are good.

      Cheers,
      Andrew

  15. Mark says:

    Looks like the fees have gone up now. Fund platform fee is now 0.30% plus the Fund Manger fee of 0.75%. I think I’ll pass http://www.tddirectinvesting.co.uk/rates-and-charges/

    • Anton,

      These brokerages alter their fees all the time. But if you use SC, I don’t believe they offer access to the Canadian stock exchange. You mentioned that you are Canadian.

      Cheers,
      Andrew

  16. Mark says:

    ^^ Or is that just the UK version? TD Direct International seems to have a different fee scheme.

  17. Anton says:

    Hi Andrew

    I can’t figure out how you got the Standard Chartered rates above
    I’ve been looking at this brokerage due to 0 custody fees and the only fee I see is the 0.2% commission fee.

    So say I buy 10 000 worth of stocks from NYSE every quarter and they charge me their 0.2% brokerage fee. This means my annual spending would be about $80. If this amount is closer to 10 000 a month, I’d be looking at $240 a year.

    This is quite reasonable in my book considering what Saxo and DBS Vickers are charging now (Saxo for custody + brokerage and DBS for custody fees with max of 600SGD a year).

    Where is my math wrong?
    And if my math is wrong, don’t tell anyone as I teach math here in Korea 😀

    PS you never replied to my tweets, but that’s ok. you’re still cool and as a fellow Canadian I’m forgiving 😀

    • Anton,

      These brokerages alter their fees all the time. But if you use SC, I don’t believe they offer access to the Canadian stock exchange. You mentioned that you are Canadian.

      Cheers,
      Andrew

    • David Simpson says:

      I just replied to Luigi below, You might investigate Interactive Brokers (US) – they have some of the lowest trading fees and margin rates and it seems the largest selection of markets and products – including Canada – but not sure active management is the best route – consider a low cost fund like Vanguard (UK) ETFs traded on the LSE , FTSE World is 0.25%, S&P 500 is only 0.07% MER plus no UK withholding taxes .
      interactivebrokers.com / vanguard.co.uk

  18. Anton says:

    Yes that’s the biggest downside. No access to Canada but in terms of everything else they seem pretty good. I’ve also been looking into interactive brokers and they seem to give the best deal with maintenance free access as long as you have 100k in their account. I’m still figuring out if it’s worth switching but it looks really solid

  19. Luigi says:

    Hi Andrew,

    I am an Italian citizen living permanently in Vietnam but do my banking with Singapore banks.

    I am interested in selecting a brokerage company that satisfies the following criteria:
    – trades natural resource stocks, with small cap companies of less than $1 billion; stocks with a “.TO” or “.V” symbol
    – predominantly in CAD $
    – who will buy & sell Canadian stocks DIRECTLY on the TSX & TSX.V exchanges
    Note: Some brokerage firms default to buying these stocks on the Pink Seheets for their own convenience. I want to avoid buying a broker who will buy these stocks on the pink sheets or theOTC markets. I prefer the more regulated TSX and TSX.V exchanges.
    – have an easy brokerage platform with mobile phone application
    – zero or minimum annual account fees
    – competitive commission costs per trade
    – interest paid on uninvested cash, if possible
    – with phone support preferably 24/7
    Note :Vietnam is 11 hours ahead of Toronto time

    Finally, due to the high price volatility of these stocks within a short time period this effects both the buying & selling; & if I am not able to get in or out of a position either online or if the brokers phone hold time takes too long would you advise how best to minimise these potential time delays.

    I welcome your input and suggestions. Thank you.
    Luigi

  20. David Simpson says:

    I was recently notified TD Direct Investing ( Lux) will increase trading fees on October 1 by 0.1% ,http://int.tddirectinvesting.com/commissions , Custody fees remain unchanged.

  21. Luigi says:

    Interactive Brokers was originally my first choice but I am looking for an alternative due to the following reasons:

    – IB is aimed primarily at highly experienced and professional investors.

    – IB’s trading platform is hard to learn and not recommended for novice investors. If you do not have investing experience under your belt, stay away from IB.

    – IB have below average customer service.

    – IB has a complex fee structure that varies from exchange to exchange.

    • Anton Petrov says:

      Luigi, it’s not very complex. It’s actually kind of simple, even compared to my old RBC DI account.

      Their customer service so far was good. they take a few hours to reply, but I’m also in a different timezone so yeah

      Their fees are very fair and very low. You do have to pay 10$ a month but this changes if you’re a frequent investor or if you’re over 100 000 USD

      The best part is that all trades are 1$ so I can buy every month after every paycheque and avoid 20-30 $ fees at other brokerages, which already justifies 10$ monthly fee

      Their FOREX is also most competitive in the industry

  22. Luigi says:

    Andrew I am looking at investing in a Canadian private placement that requires “accredited investor” status ie either annual earnings over $200,000 or net asset worth of $1.0 million (excluding your primary residence) & proof of your liabilities.
    The document required to prove your Liabilities is a Consumer Credit Report; however from my research these reports are geared to USA citizens that have a social security number.

    How & from where can a foreigner obtain a Consumer Credit Report that would be valid in order to verify one’s liabilities?

  23. Patrick says:

    I thought it looked really complicated. Saxo’s GoTrader is more expensive but at least I can understand the damn thing…oh and isn’t subject to estate tax as its not domiciled in the US.

    • Dave Simpson says:

      Patrick, as a non resident alien , owning more than $60,000 in US situs assets on your death , your estate will be subjected to this tax. Owning US situs assets in a non US broker , your estate will still be liable to pay US estate taxes. It is what you own, not where you hold them. Sorry for the bad news!

  24. Dave Simpson says:

    Patrick, If you are a non resident alien , owning more than $60,000 in US situs assets on your death , your estate will be subjected to this tax. Owning US situs assets in a non US broker , your estate will still be liable to pay US estate taxes. It is what you own, not where you hold them. Sorry for the bad news!

    • Patrick says:

      I don’t own any US assets or any US shares, mine are all through the London Stock Exchange in UK based FTSE ETFs and UK bond as I’m British. I broker these through Saxo based in Singapore.

      • David Simpson says:

        You are good to go then!
        You can still own US stocks held in Funds registered outside the US, like Vanguard (UK) VUSD – SP500 Index

        I was confused by your statement, ‘Saxo’s GoTrader .. isn’t subject to estate tax as it’s not domiciled in the US’

  25. Steve F says:

    I’m am expat investing with TD Waterhouse in the UK. They’ve just written to me saying they will no longer conduct business with non residents and we must move elsewhere or TD international in the next 30 days. They’ve told me their “low fees” but haven’t mentioned they are rising on 1st October. I inherited TDW when they consumed the assets of eTrade UK and would rather not deal with them if this is what they do. I have a fairly significant static UK stock portfolio, I reinvest dividends and make 1 or 2 trades a year. I’d like to know if there is an expat appropriate trading service that fits this profile.

    • Steve F says:

      I should make it clear its TD Direct investing in the UK. When eTrade US did the same thing to Singapore customers at the start of the year they gave customers 90 days. My feeling is this is to try force TD Direct customers to go to the international product without allowing them to switch to another supplier. With the compliance certification now required and my own travel and the time to research new providers, 30 days is very short.

  26. Ali Al Lawati says:

    Hello, any comments on research offering by each of Saxo Bank and TD direct? comparisons maybe?

  27. Kevin says:

    Hi Andrew,

    It looks as though TD has changed their commission fee since you wrote this article. It now appears to be 14.95 + 0.1% (http://int.tddirectinvesting.com/pricing/commissions). Have you heard anything about this?

    In your book, you have a great comparison of the different options based on different fees. Have you considered writing an update to that here? Who do you consider the best now?

    Thanks!

    • Hi Kevin,

      Here’s what I wrote yesterday to one of my readers, named James:

      James,

      All of these brokerages will change their fees many times before you have completely built your nest egg. So, I don’t have comments on “the best” brokerages” for fees. I have seen DBS Vickers, Saxo Capital Markets, Standard Chartered and TD Direct International push their fees down, then up, then down, then up. I certainly wouldn’t get into the habit of playing musical brokers. Go with a brokerage (or two if you feel the need to diversify brokerages) then focus your energies on saving plenty of money and investing without emotion.

    • Keeping up with the musical fee changes that international brokerages charge wouldn’t be worth the effort. Today’s most expensive international discount brokerages (note, I’m talking about discount brokerages, such as TD Direct International, Saxo Capital Markets etc) could be tomorrow’s most expensive. Then they’ll reduce costs. A few years later, they will likely raise them again. What’s most important? All of their fees are reasonable. Pick a low cost brokerage and stick to it.

      Cheers,
      Andrew

  28. Patrick says:

    Hey Andrew

    Earlier this year you and your books set me on the path to ETF enlightenment, thank you so much – everything is coming on nicely even though with Brexit and Trump all are a bit South of the entry price I see that as an opportunity to buy at a discount for when it rises.

    A question I had was regarding Saxo who I’m now with. As a private Danish bank that’s been around since the 90s should I be concerned at all about their stability? Would I be better off going with a bank like DBS to ensure that they’re more likely to survive any serious crash if it were to happen?

    I’m not very knowledgeable about banks going under but was concerned given the likely difficult global economic times we face and I don’t really know about Saxo being built to protect themselves and my investments from it.

    Any thoughts would be warmly welcome.

    Patrick

  29. Patrick says:

    Great to know Andrew, thank you.

  30. John says:

    I am a fast-approaching 50 yr old international school teacher in Hong Kong. My wife and I intend to retire in France. We are aiming to save for the next ten years here in HK to buy a property in France. where we intend to retire…

    After reading your excellent (both in terms of advice and quality of writing…) Millionaire Teacher book, I am looking to invest in index funds according to your advice i.e. 50% Hong Kong bond / 15% Hang Seng tracker / 20% Vanguard 500 Index Fund / 15% in a Eurozone index fund… we intend to use TD Luxembourg…

    Do you have any advice on the above & can you recommend a European fund? Would really appreciate any advice!

  31. John says:

    Thanks for such a prompt reply Andrew!

    Yes I have ordered your Global Expats book…. and I’m waiting for it to arrive….

    Tks for the advice about VEUR… do you have a similar recommendation for a HK bond?

    Many thanks,

    John

  32. Ferdinand says:

    Re your enthusiasm for TD International Luxembourg, beware. I was with this broker and it’s predecessor, Internaxx, for about seven years and then got booted out. My crime, (i) I live on a boat and (ii) my joint account holder, my son, a Filipino was no longer considered kosher. My retirement plan was of course all shot up. Start again and have another regulator change the rules…. If only bitcoin could generate an income…

    • Hi Ferdinand,

      Why was your retirement plan “all shot up” because you had to change brokerages? I don’t get it. Your money wouldn’t have disappeared.

      Andrew

  33. Jack says:

    Hi Andrew

    I am a Europe based DIY investor. Recently some very cheap brokerages have opened up here. E.g. Degiro (Netherlands), Exante (Malta). They offer zero custody fees and trade fees at 2-4 euros flat. Some ETFs are even for free (no trading commissions). I wonder is there a catch?

  34. Sarah says:

    Hi Andrew

    After reading your amazing book rather late in life (now aged 58) and also recently having moved to Hong Kong to work, I just wanted to clarify what I read in terms of long term investment and once a year buying up bonds if they are not doing well and vice versa for equities. I think you said that this would not be a wise thing to do if one was older. What does one do in that case. I would probably work for another 4 years then retire back to Australia. I see that Vanguard are here in Hong Kong, and I was thinking of investing in ETF’s here.
    Any advice would be most welcome
    Sarah

  35. Sarah says:

    Hello again Andrew
    One more question – Is there an investment advisor you can recommend for an Australian living in Hong Kong?
    Many thanks
    Sarah

  36. John Iliffe says:

    Hi Andrew,

    I read this in the comment section here. Is it true?

    “In most international markets, Saxo keeps your international assets in custodian accounts. So for example if you buy LSE shares through Saxo, then Saxo will trade those through a nominee account it has with a UK account (such as HSBC).
    The ETFs are therefore held in Saxo’s name. Saxo holds them in trust for you, so you can request Saxo to sell them for you and give you their worth. BUT if Saxo goes bust you don’t have much of a legal right to them.”

  37. David Simpson says:

    With TD Luxembourg selling out to some small U.K. Broker , any thoughts , a wait and see ?

  38. Rohit Bhan says:

    Hi Andrew,

    thank you for the details around the brokerage. Really a key before we even start investing. I’ve been looking at HSBC Expat and their InvestDirect International platform. No maintenance charges and a flat 14.95 pounds for UK shares / ETFs and 25.95 dollars for US shares. A bit higher per transaction but seems to have no recurring cost (other than levy/tax).

    Any thoughts ?

    Regards, Rohit

    • Mark Zoril says:

      Hi Rohit. If this is as you describe it, it is likely a pretty good brokerage platform. Particularly for those with a good long term couch potato strategy. Even better for those with high balance accounts too.

  39. Nicky says:

    Hi

    I have read your book 3 times now, specifically the section for Australian expats. It’s been so eductational! I’m living in Canada and I have a small lump sum in Aus ($50K) that I want to invest. But when I look at the ongoing monthly fees of places like TD Direct International, it seems like the monthly fees will outweigh any gains I make.

    Am I missing the point? I just want to make a 1 time purchase and rebalance yearly (the rest of my funds are invested in Canada).

    • Mark Zoril says:

      Hi Nicky. Your fees should be in the neighborhood, on $50K, of about $250 or so – give or take, assuming you don’t trade. If you purchase some low-cost ETF’s and they net, after their small fees of say 20 basis points, 5% a year (not unreasonable), that would be $2,500 a year of growth. Obviously there is no guarantee of this return, but it is well worth it if you have reasonably good performance over time. Also, Interactive Brokers fee would be $120 a year if you want to look at them. Good luck.

  40. Scott says:

    Andrew, I have recently opened with TD International and will be starting with a small lump sum retrieved from FP (10kAUD) and looking to add regularly (1-2k per month) from salary. I am 40 and currently living in China with my family and no short term plans to repatriate and an open mind to retirement. We have two properties (total 600kAUD) that we also plan to pay off over the next ten years which bring in decent rent. Main question is given the high cost of trading on the Australian exchange compared to the UK or Canadian market are we better to build our couch potato portfolio in the UK market so we can purchase more regularly with an eye on the 1% rule?
    Also given our existing commitment to real estate in Australia that will provide an income what Bond / Stock balance would you recommend (more aggressive then the age based allocation (40-60)?

    • Hi Scott,

      If you want a slightly more aggressive portfolio, you might prefer a portfolio with 70% stocks, 30% bonds. The good thing about the Australian exchange is that you could use it to buy an Australian stock market ETF. This would ensure exposure to your home country market and your home currency. You’ll be paying future bills in that currency when you retire to so it’s nice to have a portion in that portfolio. In addition, when you repatriate, if you buy all of your ETFs off the Aussie exchange, you can transfer the holdings to an Australian brokerage without selling them. If you are worried about commissions, just save up a bit more money before you make each purchase. You could choose to invest quarterly instead of monthly.

      Cheers,
      Andrew

  41. Jonny says:

    Hi Andrew, I am a Japanese working in Hong Kong. I just finished reading your book “The Global Expatriate’s guide to Investing”. Great book for novice investor!

    I was wondering if you can advise me about the choice of brokerage for my case. The problem for Japanese living outside of Japan is that we cannot keep the Japanese brokerage service active, we are asked to freeze the account.

    TD Direct International seemed attractive, but since I might return to Japan after a few years of working abroad, then I will have to close the account when I do so. Is there any better brokerage for Japanese? Currently, I hold HSBC HK investment account but haven’t used it.

    • Mark Zoril says:

      If you can use TD Direct while in HK that might work fine. What you can do is when you return to Japan is transfer to a Japanese brokerage if you need to. You can do an in-kind transfer of your holdings. This means you do not sell the ETF’s you own – they simply transfer over to your new brokerage. Investors throughout the world to this type of thing all the time. You just need to find a Japanese brokerage that would allow you to own the same ETF’s that you purchased and hold with TD Direct. Good luck.

      • Jonny says:

        Thank you, Mark. I will check if there are any Japanese brokerage that would accept such transfer.

  42. Stephen says:

    Hi Andrew,

    Can you give me your thoughts on using HSBC Invest Direct International as a brokerage for my ETF purchases. I am a British expat based in Dubai. Many thanks.

  43. Fred says:

    Hi Andrew, thanks for the great advice.
    I’m a Canadian who’s been living long-term in Lebanon, where all my income comes from. I’d like to diversify away from the country risk by starting a buy-and-hold strategy of stocks and bonds at an international online broker. Based on your advice I contacted TD Direct, but they told me they can’t open an account for Lebanon residents. So is the remaining best option Saxo Bank? I’ve read good things about Interactive Brokers. but that it’s best for frequent traders, whereas I’ll be doing simple ETF/index funds and bonds buying every quarter or so.
    Thanks for any advice.
    Fred

    • Mark Zoril says:

      Hi Fred. I am an advisor and help many people setup their accounts with IB. It works fine. Yes, it has a lot of horsepower and is designed for traders, but buy and hold investors can use it just as well! It is typically easier to setup your account, very low cost, and has great currency exchange options as well. Cheers.

  44. Fred says:

    Thanks Mark for the advice. So you recommend IB versus Saxo even for infrequent traders like myself?
    Regards,
    F.

    • Mark Zoril says:

      Absolutely. Once you get it figured out and trade a few times it is fine. I know some can struggle to get it going, but it works well. That being said, I think Saxo is ok too. However, I think IB is a bit easier to get going just by uploading your docs and wiring your funds over. You can email me directly with questions. Just google my name.

      • Jen says:

        I found Saxo super easy to open with and Td direct so hard-I gave up on them. Can I ask a question: what do you think about having ETF portfolios off two different platforms (like saxo and ib). I am thinking to do this to–spread risk -I don’t mean risk of the ETF bcos it is the same-I mean like saySaxo went bankrupt and for some reason I could not access my ETFs for many many yr’s until something was sorted-at least there would be my other portfolio?

        • Mark Zoril says:

          Hi Jen. I think the chance of this type of bankruptcy and Saxo raiding your account is quite small. Also, I don’t think it would take years to be sorted out. That being said, if helps you feel more comfortable with what you are doing then I would not discourage it. It is not a massive hassle if you can get the accounts up and running. Many of us can have different approaches. Also, it was very common in the US for those that lost money in their bank in the depression to have multiple banks afterward.

  45. David Simpson says:

    My 2 cents , I agree with Mark – Interactive Brokers is a superior choice over Saxo – who now charge an annual custody fee of 0.1% . The only two issue I have with IB is it is a US firm – where Asset Forfeiture laws exist , which are not subject to innocent until proven guilty and 2, IB offers non-US based ETFs , which appears to be illegal under the Securities Act of 1940 . Perhaps at some future time, if we own such, we may be required to dispose of these.

  46. Steven says:

    Hi Andrew,

    I am a Dutch professional based in Singapore looking to create a couch potato portfolion.

    In this context, wondering if I should open a local brokerage account (Vickers would be my first choice, as DBS is my bank, but their fees are very high) or make regular transfers to Europe via transferwise and use a low cost broker (Lynx) over there.

    I’ve read a lot about SC and Saxo market but believe they act as a custodian (hence technically own your stocks), does this apply for ETF’s as well? If so this would not be a preferred option

    Interested to hear your views

    Thank you

    Steven

  47. Steven says:

    Hi Andrew,

    I am a Dutch professional based in Singapore looking to create a couch potato portfolion.

    In this context, wondering if I should open a local brokerage account (Vickers would be my first choice, as DBS is my bank, but their fees are very high) or make regular transfers to Europe via transferwise and use a low cost broker (Lynx) over there.

    I’ve read a lot about SC and Saxo market but believe they act as a custodian (hence technically own your stocks), does this apply for ETF’s as well? If so this would not be a preferred option

    Interested to hear your views

    Thanks!

    Steven

    • Mark Zoril says:

      HI Steven. Not sure you can use a brokerage platform back home. Most of those will not accept non residents. I suppose if they do and it was reasonable and easy enough to fund it might be a good option. Good luck.

      • Steven says:

        Hi, thanks for your reply. I’ve already set up an account with Lynx (they accept non-resident), plus I still have an ING Bank brokerage account.

        The question is more if it makes sense to transfer money between Singapore and the Netherlands every month to invest in euros instead of SGD for a couple of reasons:

        1) Transfer fees (gets expensive
        2) long term tax impact (if i decide to move back to NL, I will get taxed on total equity holdings)

        Cheers

        S

  48. ron says:

    Steven, you can set up an account with degiro.nl. It is done in minutes dirt cheap.

  49. Steven says:

    Hi, thanks for your reply. I’ve already set up an account with Lynx (they accept non-resident), plus I still have an ING Bank brokerage account.

    The question is more if it makes sense to transfer money between Singapore and the Netherlands every month to invest in euros instead of SGD for a couple of reasons:

    1) Transfer fees (gets expensive
    2) long term tax impact (if i decide to move back to NL, I will get taxed on total equity holdings)

    Chers

    S