Which broker would you choose?

Alex9384

Hi all.

I've been holding some shares since early 2000s through a money management company in my home country, but never tried buying anything directly through a brokerage account.

I'm now interested in starting buying some US index ETFs and hold them long term (at least 20 years), increasing the portfolio size over years.

Which broker would be the least hassle in terms of FX conversions, etc. I'd like to buy more shares once or twice a year (or even monthly if there's zero commission).

Is there any benefit or downside in using just one brokerage firm or should I have 2-3 brokerage accounts with different firms?

I watched this video which is a very nice breakdown but still can't decide:

https://www.youtube.com/watch?v=ysUl7oiqgEg

ColdIron

If I was investing for 20 years I'd like to imagine my broker would still be around in 20 years time as well so personally I wouldn't use any of the above

Alex9384

ColdIron said:

If I was investing for 20 years I'd like to imagine my broker would still be around in 20 years time as well so personally I wouldn't use any of the above

He mentions company age at the 16:40 time mark.  Which broker would you use then?

ColdIron

It would depend upon many factors, not least the sums involved. For a few hundred quid it wouldn't concern me. For a few hundred thousand it would greatly concern me

Albermarle

All mainstream investment platforms offer ETF's following US mainstream indexes, but usually priced in GBP.
In this case no FX charges, but the performance will be affected by £/$ exchange rate.

Although if you are based in UK, with your income and expenditure in Pounds and you buy ETFs priced in Dollars, then a similar situation arises.

An alternative is to buy a currency hedged ETF priced in GBP following US markets. Actually I am not 100% sure they exist, but OEIC funds exist that do.

Opinions seem to vary on whether buying hedged funds is a good idea or not.

Alex9384

ColdIron said:

It would depend upon many factors, not least the sums involved. For a few hundred quid it wouldn't concern me. For a few hundred thousand it would greatly concern me

Isn't this relative? For someone a couple hundreds can be their life savings and for someone else a couple hundred thousand can be 1% of their money. Anyway, I'd like to start with just 5,000 USD, then keep increasing it gradually over time.

It doesn't have to be one of the brokers in the video. I only posted it to show that even after watching a video like that, I still an't decide.

wmb194

When you say, "US index ETFs," ask about fx fees, and then talk numbers in terms of USD - $5,000 initially - are you literally wanting to buy US listed ETFs? If so, you'll have a hard time as they aren't generally available in Britain or the EU as they don't meet the MiFID regulations. The exception I know of amongst brokers might be Stake but it says that only, "accredited investors" can trade US ETFs and you need a portfolio value of at least $30,000.

So I'd look for London listed, US focussed ETFs that suit. This might affect your choice of broker as the ones they offer can vary but recently I've been liking Freetrade as it's cheap and reliable. It's an early stage company, though, and although it hasn't had any trouble raising money recently there could be a risk via a vis longevity.

A good choice for a cheap broker with a big backer is iWeb, ultimately owned by Lloyds Banking Group, which is £5 per trade and no ongoing fees but it requires a once off £100 opening fee.