Transfer to UK Bank Account from US Share Registrar

I was hoping to get some guidance on the below.

I am employed by a UK entity, however as part of my remuneration, I receive equity/stock/shares from the US parent company.

As the stock is listed on the Nasdaq, the stock/shares are valued in USD.

Currently, when I sell stock/shares, the share registrar (Shareworks) pays the proceeds of the sales to my UK bank account (First Direct). First Direct take a £5 fee each time the proceeds are paid to my bank account.

A colleague has stated the below:

I use Wise to withdraw share proceeds, free and easy to setup an account - they allow you to create an account domiciled in the US so you can directly receive ACH or wire payments to those details. In their case, this is actually a bank account setup at Community Federal Savings Bank, NY. They charged me 0.49% to convert my proceeds from USD to GBP last week when selling some shares (plus their own flat fee of $4.14). UK high street banks will absolutely gouge you on this, do not under any circumstances withdraw proceeds straight to them as you could pay a fee as high as 5%.

Given the funds I receive is only £5 less than the monies Shareworks sends to my First Direct bank account (which is far less than 5% of the value of the payment), I'm not sure I would actually be better off using the option my colleague has highlighted.
  • Does anyone have any experience of the situation above?
  • Could anyone provide any guidance on this?
  • Would I be better to use the option suggested?
  • Or stick with my current direct payment to First Direct option?

Comments

  • wmb194
    wmb194 Posts: 3,123
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    edited 5 February at 5:31PM
    Mjmollo said:
    I was hoping to get some guidance on the below.

    I am employed by a UK entity, however as part of my remuneration, I receive equity/stock/shares from the US parent company.

    As the stock is listed on the Nasdaq, the stock/shares are valued in USD.

    Currently, when I sell stock/shares, the share registrar (Shareworks) pays the proceeds of the sales to my UK bank account (First Direct). First Direct take a £5 fee each time the proceeds are paid to my bank account.

    A colleague has stated the below:

    I use Wise to withdraw share proceeds, free and easy to setup an account - they allow you to create an account domiciled in the US so you can directly receive ACH or wire payments to those details. In their case, this is actually a bank account setup at Community Federal Savings Bank, NY. They charged me 0.49% to convert my proceeds from USD to GBP last week when selling some shares (plus their own flat fee of $4.14). UK high street banks will absolutely gouge you on this, do not under any circumstances withdraw proceeds straight to them as you could pay a fee as high as 5%.

    Given the funds I receive is only £5 less than the monies Shareworks sends to my First Direct bank account (which is far less than 5% of the value of the payment), I'm not sure I would actually be better off using the option my colleague has highlighted.
    • Does anyone have any experience of the situation above?
    • Could anyone provide any guidance on this?
    • Would I be better to use the option suggested?
    • Or stick with my current direct payment to First Direct option?
    Yes, use Wise's USD account with an ACH transfer from your broker. I only pay 0.5% to convert it to sterling when moving it to a Wise GBP account, I'm not sure what the flat fee your colleague mentions is. Transfers from the Wise GBP account to my current account(s) are free.

    First Direct is probably gouging you in the FX rate, that's where the real cost will be. Wise's rate is usually very close to the spot rate.
  • sausage_time
    sausage_time Posts: 694
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    Agreed - it's all down to the FX rate that First Direct use.  I use Wise in the way described above, and anytime I look at alternatives is is very competitive.  
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  • eDicky
    eDicky Posts: 6,526
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    edited 5 February at 8:10PM
    Mjmollo said:
    First Direct take a £5 fee each time the proceeds are paid to my bank account.
    Yes, plus the margin they take on the exchange rate to GBP (as mentioned), with no transparency but at least 3%, much more significant than the flat fee. Wise will give you the current mid-market rate with a modest and stated percentage fee and no other cost. Plus you can choose when to convert, which can be beneficial (although without FSCS protection on funds held with Wise).

    Evolution, not revolution
  • plantation_2
    plantation_2 Posts: 12
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    As others have said, your colleague is correct. I also use this method. Key is in the fx rates you are offered between the two approaches
  • Mjmollo
    Mjmollo Posts: 10
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    Thank you wmb194, sausage-time, eDicy and plantation_2 for your guidance and apologies for the delay in thanking you all.

    One interesting point is the monies that credit to my bank account match the GBP figure which is quoted on the Shareworks employee portal.

    The portal shows the information below:

    Shares To Be Sold: 150
    Market Price per Unit × $87.576733
    Proceeds $13,136.51
    Wire Fee - $40.00
    Supplemental Transaction Fee - $0.11
    Net Proceeds $13,096.40
    Currency Conversion × 0.793458
    Converted Net Proceeds £10,391.44

    The monies that credited in my First Direct bank account were £10,391.44 less the £5.00 fee.

    This transaction was in early November 2023, so I'm not sure if a USD to GBP rate of 0.793458 is a good rate.

    Does any of the above information change your guidance i.e. would using Wise result in a higher return as I'd get a better exchange rate?
  • wmb194
    wmb194 Posts: 3,123
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    edited 12 February at 3:36PM
    Mjmollo said:
    Thank you wmb194, sausage-time, eDicy and plantation_2 for your guidance and apologies for the delay in thanking you all.

    One interesting point is the monies that credit to my bank account match the GBP figure which is quoted on the Shareworks employee portal.

    The portal shows the information below:

    Shares To Be Sold: 150
    Market Price per Unit × $87.576733
    Proceeds $13,136.51
    Wire Fee - $40.00
    Supplemental Transaction Fee - $0.11
    Net Proceeds $13,096.40
    Currency Conversion × 0.793458
    Converted Net Proceeds £10,391.44

    The monies that credited in my First Direct bank account were £10,391.44 less the £5.00 fee.

    This transaction was in early November 2023, so I'm not sure if a USD to GBP rate of 0.793458 is a good rate.

    Does any of the above information change your guidance i.e. would using Wise result in a higher return as I'd get a better exchange rate?
    Looks like the FX transaction is with your broker, not FD. What was the exact date? Early November was more like 1.23 or 1.24 not 1.26 i.e. this probably isn't a good rate. If you can transfer USD to Wise by ACH you should be able to save the $40 wire fee and FD's £5 receiving fee.
  • sausage_time
    sausage_time Posts: 694
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    edited 12 February at 3:42PM
    The market rate was around 0.806 early November, so that looks like you had a ~1.5% loading (versus ~0.5% for Wise).  Assuming your broker will send to a US bank with no fee (most will) you would avoid the $40 wire fee.  And a Wise US$ to FD should not incur the $5 charge by FD.  So looks like you would be better setting up Wise if this a regular occurrence?  Check your broker will do a ACH transfer to a US bank account (which is what Wise will present as).
    I’m a Forum Ambassador and I support the Forum Team on the Credit Cards and Budgeting & Bank Accounts boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected].
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