Charles Schwab, e-trade or Interactive Brokers...

London2017 · 14 March 2017 at 2:12PM

Hi all,

I was wondering if anyone here has experience with Charles Schwab or E-trade or Interactive Brokers.

If you want to invest in US ETFs or stocks, they seem cheaper than many of the usual brokers based in the UK (H&L, Charles Stanley, etc.).

Thanks!

bowlhead99 · 14 March 2017 at 2:42PM

The trouble with US brokers who have small UK operations leveraged off the US service is that you can get access to US pricing levels (eg $5-10 a trade might be normal) and decent trading functionality but you often don't get useful features standard with the UK brokers.

For example if I go to many UK brokers that offer international dealing (e.g. someone like TD Direct):
-I can do my investing through a UK tax wrapper like an ISA or SIPP (unlike at Schwab),

- I get access to the UK FS compensation scheme if the broker goes titsup (unlike at Schwab)

- I don't need a minimum of $25000 to open the account (unlike at Schwab).

When your account minimum is £20k or so, an ISA wrapper is handy.

Similar problem at Interactive Broker, whose account minimum is only $10k and buys/sells are cheap as chips - but if you don't keep $100k in the account then you have to pay the account minimum charge of $10/month (e.g. if your trading fees were only $4 one month and $0 the next, you'd have to pay an activity fee of $6 the first month and $10 the next)

Other brokers that don't have massive high prices on US trades and have been mentioned here before include IG.com and Saxo Markets UK.

But i confess to not actually having used any of the accounts you were asking about.

London2017 · 14 March 2017 at 2:52PM

Thanks for your reply, Bowlhead99.

Indeed, you are right on all counts. I was thinking of investing a sum above the brokers' minimum and outside an ISA/SIPP wrapper, in which case the US brokers might be an alternative.

AnotherJoe · 14 March 2017 at 3:09PM

I think there is a move amongst US brokers to get rid of foreign domiciled clients due to the paperwork/legal complexities. I am with TD Direct in the UK only because I got bounced out of a US brokerage I had, may have been Schwab but i forget.

TD Direct is reasonable to use, and key as a UK broker is that you can sell and buy in the same currency, say US$, so not making currency losses each time.

I am also with Etrade in the USA but thats mainly because my company had a stock plan and I get an associated account (which I also trade in). I will soon (as a part of retirement) start selling down my assets there so they are all in the UK. It does though have a good service, and doesn't have one irritation that TD Direct has which is the 3 day rule, eg sell something with TD and it take 3 days to get the money.

With Etrade its immediate which I was more used to from my frequent trading days so I could sell and buy a minute later. Dont think I can do that with TD. I can with ETrade AFAICR

brianposter · 14 March 2017 at 3:39PM

I have a Schwab account which appears to be very efficient.

Note that the US has some very different rules if you are a short term trader.

Charles Schwab, e-trade or Interactive Brokers...

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