Best online broker for overseas (US) share dealing

Jonathan1010

Hi,
I am looking for advice please. I have just signed up to the interactive investor platform and started trading in US shares. I allowed them to carry out a currency conversion for me without reading the small print. They have charged me 1% Margin Rate plus they also claim that FX rate for currency conversion is based on the bid/offer exchange rate and they also apply a spread of up to +/- 1.5% at the time of execution. As I result of this I ended up paying an additional 1.2%.
So 2.2% for a currency conversion which means my portfolio has a lot of growing to do before I even break even. I am furious about this as it is well hidden and would like to challenge. It sounds like they can make up whatever rate they like and does not feel very legal? Does anybody have any guidance here please or better alternatives. Any advice much appreciated please.

masonic

The costs are clearly detailed on their website: https://www.ii.co.uk/investing-with-ii/international-investing/foreign-exchange
and in their full rates and charges document: https://media-prod.ii.co.uk/s3fs-public/pdfs/rates_and_charges_uk.pdf

I'm sure you would have reviewed both of these before opening an account with a view to buying US shares. If not, that's lesson you can learn from this incident.

Nothing illegal about any of the above, btw.

ColdIron

Without wishing to be unkind, it sounds like you jumped in feet first without looking into the basics. Trading in company shares is high risk and uneconomic for many, doubly so for foreign shares. There is a cost to currency conversion and it is quite reasonable for you to bear that cost. If you are thinking of 'trading' my advice would be not to do it, certainly not before you research the basics. At the very least read the terms and conditions before implying that the company is acting unlawfully. Have you considered funds or other forms of collective investing where the fund manager handles all these issues?

masonic

Voyager2002 wrote: »

please contact me

I would have thought a long standing forum member such as yourself would be above such underhanded tactics in breach of forum rules.

OP, there is a referrer's board where others are offering better incentives should you go down this path.

Voyager2002

masonic wrote: »

I would have thought a long standing forum member such as yourself would be above such underhanded tactics in breach of forum rules.

OP, there is a referrer's board where others are offering better incentives should you go down this path.

I am sorry if I misinterpreted the rules. Obviously I have not given my referral code: normally I would highlight my post in the referrers' board but the code there is out of date. In fact I cannot recall whether there is a referal offer running at the moment.

masonic

Voyager2002 wrote: »

I am sorry if I misinterpreted the rules. Obviously I have not given my referral code: normally I would highlight my post in the referrers' board but the code there is out of date. In fact I cannot recall whether there is a referal offer running at the moment.

You are not allowed to tout for referrals on the main board in any way, including highlighting a post you may have in the referral board. You can direct people to the board, but never a specific post as the aim if the rule is to stop people clogging up threads with their own offers. If everyone tried to promote referrals here, the main boards would become toxic very fast.

You can edit your post in the referral board to update it, or if there is a new thread running you can make a new post.

Since some people are offering an extra £50 (not me, I hasten to add), it pays to shop around.

AnotherJoe

On the upside with ii, once you've bought US shares the money stays in dollars so you can buy and sell US shares without converting each time.
So the only real currency charge is once when you put Sterling into dollars and then when you convert it back to Pounds.
As long as you have a pool of Dollars that you trade within that should be very workable and much cheaper than anyone that always converts back to sterling even at a good rate.

It worked for me for quite a few years, i left ii because i stopped frequent trading and their costs became too high for buy and hold, but for what you've said or indicated, I think you may well be OK.

ColdIron

Not within an ISA presumably?

AnotherJoe

ColdIron wrote: »

Not within an ISA presumably?

Oops yes I missed that, And yes my ii investments were not in an ISA. . But i don't think the OP is within one?

Jonathan1010

Thanks for this. So you think 2.2% is competitive then and how do they justify the +/- 1.5% spread at the time of execution? Do they pluck a number out of the sky?

AnotherJoe

Jonathan1010 wrote: »

Thanks for this. So you think 2.2% is competitive then and how do they justify the +/- 1.5% spread at the time of execution? Do they pluck a number out of the sky?

Ive no idea if its competitive as far as brokers go, nor he spread though if that bothers you make a limit bid .
I'm sure the Fx isnt compared to a specialist so you could use someone like Revolut to put dollars in directly (assuming you can do that I never tried).
My perhaps not well made point was, if you put some Sterling in, make many trades over say 5 years and then convert back to Sterling and take it out, an extra 1% at each end is somewhat immaterial. If you are buying and selling many times the losses on spreads will be far more than the Fx.
I have no brief for ii, i moved away from them after all, but I always regarded the trades as key to profit and if i needed an extra 0.5% on Fx to make a difference then my trades are bad not the broker. It may have been my bad that I didn't know their spreads were worse, that isnt something i investigated. If they are then for frequent trading that would be the issue not Fx.


Are their spreads bad?