After reading Shiny Things' book, I am currently choosing between having IB or StanChart as my broker for IWDA, and would like to seek your opinions. I'm able to set aside USD 500 per month, and this can come in from my US bank account which should dry up in ~2.5 years (after which, I intend to use SGD).
That's about US$15,000 spread over 30 months. That's a slow pace. Why not pick up the pace? US$1,000 over 15 months works.
So, if I do use StanChart, the high conversion fees can be avoided for a while.
Yes, but not the transfer fees. You'll have to pay an outbound international wire transfer fee at your U.S. bank and then a S$10 inbound telegraphic transfer fee at Standard Chartered. That's bad.
However, being a few years away from 25, I'm hoping to take advantage of IB's low(?) under-25 activity fee of USD 3/month, but I am worried about incurring heavy charges once I do hit 25 (am pretty sure I won't have USD 100,000 in my account by then). Which broker would afford me a better deal?
It's under age 26 at IB, i.e. you enjoy the lower monthly activity fee of US$3 until your 26th birthday. The "heavy charges" are US$10/month thereafter, but if you're doing anything every month -- buying IWDA or VWRA, for example -- then US$10/month for your commissions is quite attractive.
Some questions that may influence the decision include:
- Can I transfer money from different bank accounts located in different countries to the same brokerage account? (i.e. can I transfer SGD to IB/StanChart after my US bank account closes)
Yes, but you shouldn't have to close your U.S. bank account unless it has an onerous minimum balance requirement. And if it does, and if you're still in a position to get a better account, I would. (Separate discussion, though.)
- What are the commission fees for IB like? Being a complete novice I couldn't even figure out if I'll be paying with fixed or tiered pricing structures.
If you're converting SGD to USD then buying IWDA or VWRA every month -- typical pattern -- then unless the dollar amounts are quite large or larger your commissions will be absorbed within the US$10 (once you reach age 26). You'll spend a little more than US$3 on commissions (below age 26).
- Can I change which brokers hold my shares? e.g. once I turn 25, let all shares held by IB be held by StanChart instead.
Standard Chartered to IB, maybe. IB to Standard Chartered, not for London-listed shares, no. But you could liquidate the shares (with a low commission), transfer the proceeds, then buy them back. As a resident of Singapore, assuming you're a non-U.S. person, there are no tax consequences with that "wash sale."
