I login to my DBS Vickers online account in November and noticed a mysterious fee charged to my account. It is the custodian fee for foreign stocks, which dbsv started charging in August silently. The amount is $2.14 per month per counter including GST.
To transfer the stocks outside to other broker, there is a fee of S$50 per counter. This is more expensive than doing a sell and a buy to transfer the stocks.
So I sold all my holdings from dbsv in November – vanguard total stock market ETF (VTI) and ABF PAIF Asia bond index ETF (2821.HK). I plan to use standard chartered bank to buy the ETFs back but have not gotten the time to do so.
As to dbsv, you were the broker I used to buy my first ETF (VTI) in 2005 when you were the only local broker who didn’t charge custodian fees for foreign stocks. So long and thanks for all the fish.
The Mamak Stall Investor 
Hi choozm,
Good to hear from you, been a long time since there has been a update 🙂
Sad to hear that DBSV is now charging custodian fee.
I am just using Standard Chartered, Saxo, and DollarDex now.
Hi momo,
Good to hear from you too. Same same, using StanChart, Saxo and Dollardex.
Hi choozm,
Just a rant. When I asked Saxo to add Vanguard ETFs on LSE in May 2012, this is the reply I got:
“The below are ETF in GBP Currency which we currently do not support on LSE ,we only support GBx currency.”
Currently the ones in Saxo are the USD versions which have lower trading volume than the GBP ones (obviously!).
I’m also on SCB trading. It is my low cost ETF buying platform. Things are looking up now. All back to pre GFC levels.
Hi, I’m in the middle of deciding which trading platform to go for DBS vickers vs SCB.
I understand that DBS has recently raised their commissions and is charging custodian fees for non-sg products (personally planning to get world stock index VT). However, I also read that for SCB, even though you don’t pay on fees, you lose money through the foreign exchange rate when buying in USD.
I get the impression now that SCB will be useful for people who do DCA every month while DBS can still be ok for people who rebalance their portfolio every quarter or so in big amount.
Any thoughts on this?
Hi, I have relooked DBSV fee schedule and there is dividend collection fee 1% of Net Dividend, Minimum USD 4, Maximum USD 40. I remember there was no such fee before. You might want to call up DBS to clarify.
For SCB, from my observation, the fx loss is about 05%-1.0%. Let’s take 1.0%, plus the commission of 0.25%, it is 1.25% cost no matter how much you trade.
For DBSV, it can be cheaper provided you trade with higher frequency and amount. Let’s say I trade 4 times a year, each time USD3000. Total commission is USD25x4, plus custodian fee SGD1.61 (USD2) times 12 months. Total cost per year is USD119.32 or 119.32/12000 = 0.99%. However, I have not factored in the dividend collection fee, which is potentially another 1%.
I use SCB because personally:
1) I don’t trade much
2) I am OK with 1.25% fixed cost
3) I am lazy to calculate the cost for every trade to decide which of the two brokers to use.
YMMV.
Hello, for the UK ETFs purchased, are there dividend withholding taxes and capital gains taxes? If so, may I know what the percentages are?
I have tried searching online and found conflicting replies on whether there are such taxes.
Thank you.
For the UK ETFs I bought, there are no withholding tax, because they are domiciled in Dublin, Ireland.
For capital gain tax, there is a annual tax-free allowances, see:
http://www.hmrc.gov.uk/rates/cgt.htm
Hi choozm, I don’t understand the part on capital gain tax. Care to explain more? Just like you, I have been buying UK ETFs thinking there is only the inheritance tax above the nil-rate band.
Hi momo, capital gain tax is tax you need to pay when you make a gain when selling shares. In UK. “In general you will not be liable to pay tax on capital gains if you are not resident in the UK but there are exceptions.” See: http://www.hmrc.gov.uk/international/tax-incomegains.htm
I still buy UK ETFs. when I need to sell, I will find out if there is capital gain tax and the annual tax-free allowances; if yes, probably sell in chunk below the allowance to avoid paying tax.
Hi choozm, thanks for the reply. It seems like we are quite safe as long as we were never resident in UK.
http://www.hmrc.gov.uk/cnr/faqs_capgains.htm
I received an email from Saxo titled “Changes to fee structure from
1st March 2014”. Detail of the Saxo email is as follows.
“From 1st March 2014, an Inactivity Fee of USD100.00 will be imposed on accounts without trading activity (in any instrument) for 180 days. The first potential charge will therefore happen on 28th August 2014.”
Maybe we also need to say good-bye to Saxo as well. Please share you comments. Thanks
I also received the email. One trade per 180 days is not too bad since I invest every 6 months. If I don’t have trading activity, I will use the accumulated dividend in the cash account to trade some ETF. The troublesome part is the need to monitor the inactivity. I hope Saxo will send reminder email for this, else I will have to set a reminder in my Google calendar.
Re choozm,
Looks like if there is a need to, I will follow your idea of at least reinvesting the dividends every quarter. Every quarter because the inactivity fee applies if there is no trading activity for 180 days. Based on your plan of investing every 6 months, “6 months” may exceed 180 days. However, paying ~S$16 just to reinvest dividends only is expensive. 😦
Hi,
I received the email too and came right in here. This is bad news. 180 days is bad.
1. Depending on your asset allocation, the ETF(s) in Saxo may not be traded within 180 days.
2. In withdrawal phase, again the ETF(s) in Saxo may not be traded within 180 days.
3. When you pass away, there is more hassle for your spouse/children to take care of this trading activity.
So panther/choozm, what is your solution? Which is the next best brokerage house?
Btw SCB’s USD spread is still very bad 😦
Go with Interactive Brokers. Very difficult to move around but cheapest. That is what I know from someone who buys from LSE.
Interactive Brokers has a monthly minimum activity fee of USD 10. That is not ideal at all for Boglehead-style investors.
Actually, depending on how much allocation is to foreign ETFs, and how much is invested on average each month, the total cost of using Interactive Brokers (IB) might actually be lower than Saxo, considering commission and FX “loss”. So IB is indeed a viable option.
Any thoughts choozm? In your situation would IB be more or less the same costs or better?
Hi Momo, you have valid 3 points.
I think for withdrawal phase, may need to close Saxo account to avoid inactivity fee.
I am both a long term trader (ETFs and unit trust) and short term trader (stocks). So, for me, I can avoid the 180 days inactivity fee.
Also I don’t have another alternative. For now, I am still using Saxo until come across a better option.
Hi panther, it sounds like Interactive Brokers might be cheaper for you, if your stocks refer to non-SGD stocks and your traded amount is significant. This is because Saxo charges a currency conversion fee of 0.50% for each conversion.
Btw I’m thinking we should create a thread in some forum (sgfunds is dead, Bogleheads?) for the few of us Singaporeans to post and discuss topics like this. Its really difficult to find like minded people in this area and spamming choozm’s blog doesn’t seem nice.
Hi everyone!
I am going to start on my 1st job soon and will like to invest a part of the money I earn every month (either one lump sum every few months or per monthly basis is good) into foreign Exchange traded funds ( probably Vanguard or Charles Schwab etfs and mixture of some other stocks). I am probably going to keep the investment for the long run as well and re balance it once in a while
It seems like SCB investing platform will be the best option from what I read because of its low commision charges and lack of custodian charges.
I will appreciate any help in choosing the optimal brokerage film for me to choose from. Hopefully with some pros and cons of the brokerage firm u suggested. If anyone can link me to some articles for long term investment, I will appreciate it as well!
Thanks
There is a huge issue with SCB for foreign exchanges if you are the one who looks out for costs. Even though the 0.25% commission for international trades is sweet, the exchange rate puts people off. It hovers around ~1.5 – 2%. That puts it to a commission/expense ratio of $30 a month according to someone who ditched them for IB.
Check this thread in Hardwarezone forums.
http://forums.hardwarezone.com.sg/stocks-shares-indices-92/interactive-brokers-ib-standard-chartered-sc-investing-internationally-4342929.html
Hi all,
I forgot about the brokerage house being locally registered and hence regulated by MAS.
http://www.wilfredling.com/content/view/78/9/
Unfortunately Interactive Brokers is not registered in Singapore.
I don’t mind paying more commission to Saxo when generating activity. But one issue still grapples me. And that is the inactivity fee when you are no longer around to manage your activity. If the inheritor is not equipped with the necessary knowledge, the (inactive) account may just incur the inactivity fee of USD 100 every half-yearly.
How will you address this issue? Upon retirement, sell off your holdings in Saxo and buy annuity?
my dividend just got taxed at 20%… shall contact Saxo
Hi, SCB got back to me that ETFs on LSE with ISIN starting with GB and IE are exempted from stamp duty. I then called again to say that when placing order, the stamp duty of 0.5% is still there. The person will check with backend and get back to me next week. Hopefully they implement it in their system.
Re above. Drizzt has confirmed that there is no stamp duty by buying 1 share of VWRD. See his blog for more info.
New issue. Saxo has increased LSE commission to GBP 20 !
Hi momo, thanks for the update! Good to hear that. The stamp duty was what kept me from buying LSE ETF using SCB. Now that Saxo has increased LSE commission, I will consider switching to SCB. Let me check if my LSE ETFs’ ISIN start with GB and IE. Cheers!
Greetings to all of you wise investors,
I am very happy and excited to have come across this thread. I bought STI ETF a few years back and have been inactive with the purchase of ETF since then.
After reading the book by John Bogle and Andrew Hallam, I’m deeply influenced by their believe in the benefits of passive investment strategy. Been reading various blogs and articles online ever since.
I’ve had several friends who bought unit trusts and other various investment vehicles promoted by sales people, all of which are very opposite of passive investment.
Do you guys have discuss in another thread/post about passive investment?
Hi, Thanks for reading. We used to discuss passive investment at http://www.sgfunds.com but it is not active anymore. Cheers.
Hi choozm,
Thanks for the reply!
Yes I saw that link before but it is no longer active. Is there any other platform where like-minded passive investors discuss about the latest trend in this investment philosophy?
What is the current broker(s) you are using to acquire ETFs and similar funds?
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