Key Post Choosing a stockbroker

Z

Zenith63

Registered User
Messages
1,405
Laramie said:
Which Irish stockbroker has the lowest fees at the moment? Do any of them still deal with share certificates?
Click to expand...
I've been looking for a replacement for Campbell O'Connor myself. I came across this table that DeGiro have done up of transaction fees - https://www.degiro.ie/fees/compare-brokers/ - it seems to be accurate and has most of the brokers you'd probably consider as an Irish investor. Short answer is that DeGiro are very significantly cheaper than the others out there, and I just noticed that they also give you one commission free ETF trade per month, which is quite neat if you just wanted to build up holdings in a small pool of ETFs.

Having said that, if you were still with Campbell O'Connor the chances are you weren't there for the cheap fees, you were there because they'd let you trade in certificated form or have a CREST personal account, neither of which DeGiro do - they are pure online 'nominee account' style brokers. Maybe we could figure out which brokers offer CREST personal accounts and share here for others in the same quandary?

  • DeGiro - No CREST personal accounts or physical certificates. All shares held in a separate entity, unclear how that entity holds the shares (pooled in a CREST account in the name of the DeGiro separate entity presumably)
  • Davy - Website is a little unclear. Shares are held in a separate entity which uses CREST to hold shares, with one CREST account per client. However these don't appear to be personal CREST accounts, so your name will not appear on the share register of companies and communication from the companies will presumably not come directly to you. "Our nominee company is a member of CREST and its name appears on the share registers for these assets. Our nominee company operates individually designated CREST accounts for all clients who hold CREST eligible securities through Davy. This means that there are separate accounts within CREST for each Davy client. Client accounts are segregated from each other as well as from those of the firm."
  • Goodbody - No clear statement on website, but there are CREST forms available to transfer your shares to their "Goodbody Nominees" CREST company, so looks like they use CREST to hold shares but their name goes on the share register, so again a form of nominee account.
  • InteractiveInvestor - No mention of CREST personal accounts either, appears to be a separate entity that holds the shares in a CREST account in their name
  • Cantor Fitzgerald - There are a number of mentions of CREST personal accounts on their site as well as a form for creating one, so looks good
  • Merrion Capital - No mention of CREST personal accounts on their site, but their share transfer form is pre-filled to a CREST nominee entity, so looks like this is a pooled nominee account similar to many of the brokers above.

Also worth considering what impact Brexit may have on CREST, which while being owned by Euroclear (a Belgian company) is a London based entity. From the Euroclear site -
"Euroclear UK & Ireland is pleased to confirm that the European Securities and Markets Authority (ESMA) has recognised Euroclear UK & Ireland as a third country CSD in accordance with Article 25 of the EU CSD Regulation.

This ensures that Euroclear UK & Ireland will be able to continue its Irish securities settlement services after March 2019 in a no-deal Brexit scenario. Euroclear UK & Ireland's recognition will apply from 30 March 2019 to 30 March 2021, by which time it is expected that the Irish securities market will have migrated to Euroclear Bank.

Euroclear UK & Ireland is working with the European Central Bank and the Central Bank of Ireland regarding continued euro settlement services in a no-deal Brexit scenario and will update clients in due course."
 
Last edited:

I got a reply from CREST/Euroclear which clarifies this setup that Davy appear to be using, in short your shares are held in separate CREST accounts, but they're all in the name of the nominee company, not your own name -
"If firms are not willing to offer you Personal Membership then please note that in the coming months (at the least by the end of the year), firms subject to new CSDR regulations, will be obliged to offer you account segregation, should you wish. This may not be in the form of the Personal Member you have now, whereby you receive your own CREST participant ID, and your name appears on the legal register. It is more likely that firms will offer this segregation as a sub-account ('Member Account') in CREST. In this model the name of the stockbroker (or nominee company) would appear on the legal register, but your shares would be segregated from those of other underlying clients of the stockbroker/nominee in CREST."

In summary, Cantor Fitzgerald are the only brokers in Ireland I found that offer Personal Member CREST accounts.
 
IsleOfMan said:
Is CREST hugely important?
Click to expand...
CREST is the digital equivalent of holding physical share certificates yourself, where you are the named owner of the shares and are listed as a share holder on the register of the companies you invest in.

The other alternative is where the broker puts their name on the share register, and keeps a record of which shares belong to whom etc. There was a case a few years back where a stockbroker went out of business and the proceeds from the sale of client funds was used to pay creditors.

If you’re trading or just holding for a short period of time or only have a small amount invested then nominee makes life easier and cheaper for you. If you’re buying to hold long term then personally I prefer the security of having the shares in your own name. The latter was what Campbell O’Connor were known for, so for people leaving them CREST tends to be a common theme.
 
Brendan Burgess said:
Which seems to conflict with...
Click to expand...
Those fees from DeGiro are per transaction, not per annum. The "Custody" name on that document is a little confusing, it's actually the name of the type of account you're opening, not that the fees in it are custody/holding fees. So when you buy your €10000 holding it would cost you €17.30 on that trade, but you would not pay to hold those shares in years 2/3/4 etc. The only thing you would appear to have to pay ongoing is a connection fee for each exchange you use beyond the ISE, so in your case €2.50 per annum to have a 'connection' to the Frankfurt exchange.

The DeGiro pricing is incredibly reasonable, but there's a fairly big difference between having an online trading account with them, and a CREST PMA with the likes of Campbell O'Connor. I'm buying shares that I may end up passing on to my kids when I pop the clogs, which seems reasonable with share certs or a CREST account, but an online trading account? Feels like you'd be sticking your username/password in your will or something

As far as I know, Campbell O'Connor charged only €50 a year account maintenance?
Click to expand...
That's what I was paying as well, for a CREST PMA. But as jpd says, I'd imagine it was hard to make money at prices like this, especially when you're known as a buy&hold broker where there aren't huge amounts of transaction fees either. I'll miss the guys there, always found them great to deal with and I started into the stockmarket with them
 
Zenith63 said:
Those fees from DeGiro are per transaction, not per annum.
Click to expand...

That is great. So I can transfer my shares pay some small transaction fees for setting up the account and very little after that.

So what is the financial status of De Giro?

Who actually has custody of the shares?

Brendan
 
What happens if I want to sell the shares I have in certificates?

I will have an account with DeGiro. Will I have to open another one with some other broker who handles shares certs?

Or will DeGiro allow me to dematerialise my shares?

Brendan
 
Also -

https://www.degiro.ie/helpcenter/faq/my-account/1120
What is the difference between the Basic and Custody profiles?
A Custody profile is different from a Basic profile in that the securities are held separately from the lending pool of DEGIRO clients’ securities and are thus unable to be loaned to third parties. Debit Money, Debit Securities, and Derivative trading is not available with a Custody profile and you cannot change to an Active, Trader, or Day Trader account. A Custody Profile has different conditions and fees. However you will still benefit from our low transaction costs and save money through trading with DEGIRO.

So worth opting for a Custody account instead of a Basic account if you're not interested in margin trading or derivatives I think.


Nice little cost comparison between the various Irish broker options here, and it seems to be quite accurate from the digging I have been doing - https://www.degiro.ie/fees/compare-brokers/
 
I spoke to Campbell O'Connor and they can convert any shares in my Crest Account into certificates in whole or in part for €50 per line of share.

I spoke to Davy's to find out how to sell share certificates
1) I open an online account which will cost me €200 per year
2) I send them in the share certificate I want to sell.
3) They charge me €80 + VAT for dematerialising the share cert. ( No charge if the shares are worth over €20,000)
4) They charge me 0.5% sales commission
5) If I have 10,000 shares and want to sell 1,000, they will keep the 9,000 in their nominee account.
6) If I want to move the 9,000 shares from the nominee account back into share certs, they charge me €50 + VAT.

So, this is my current plan - I have Ryanair shares in a crest account and some German shares for which certificates are not possible.

1) Work out what Ryanair shares I need to sell over the next two years.
2) Convert the balance into share certificates
3) Open a De Giro Account
4) Move the German shares and the Ryanair Crest balance over to Degiro.

As I need money, sell the Ryanair shares via Degiro.
If I need to sell shares for which I have certificates, open a Davy account and dematerialise them.

But I will hold most of my portfolio in share certs.


Brendan
 
I sent this email last week to DeGiro
Hello

"I have a Crest Personal Account with Campbell O'Connor which is closing.

If I transfer to DeGiro what are the account maintenance fees if any?

I gather that you don't do Crest Personal Accounts, so how are the shares held and what are the protections for me if De Giro goes bust?

Brendan"

I got a very long reply about doing a portfolio transfer with these answers at the end.

There are no initial or setup fees to create an account and there are no inactivity fees, no annual maintenance charges, no service charges, no custody charges nor is there a minimum trading limit imposed on account holders.

Your shares are held by an SPV with the sole purpose of holding your shares.

You will be able to view your shares under your portfolio in the WebTrader.
 

I've been using Degiro for a bit over a year. Maybe 12 transactions total, mostly purchases and have held the shares since. You declare tax yourself (though with holding tax is deducted). I find it a simple and easy interface and the charges are clearly laid out.

For example the account history screen includes the amounts of the charges for each transaction including stamp duty, fx fee and rate, etc if applicable. Dividends entries also include details of any with holding tax paid on the dividend. Separate from that I also got two reports on profit/loss and taxes paid (with withholding tax by country), one at 30/Nov and one 31/Dec, for make tax filing/calculation. Finally there was an annual report detailing all the charges I've paid.
 
So I made my decision.

I had shares in Ryanair in my Crest account and Campbell O'Connor has converted them to share certs.

I had shares in Renishaw in my Crest account, and Campbell O'Connor has converted most of them to share certs. I have kept a few in my Crest Account as I will be selling them over the next year.

I am left with German shares and the Wisdom Tree ETF in my Crest Account.

I opened an account with Davy Select.ie yesterday.

I chose them because I am a long time holder of these shares, so the higher transaction costs aren't that significant.

I could not find out who is behind DeGiro and as it's my long-term savings/pensions couldn't afford anything to go wrong. Maybe it's a false sense of security preferring Davys, an Irish company or partnership.

The other big advantage of Davys is that when I go to sell my share certs, they will do it for me. DeGiro wouldn't. I could have opened two accounts, but I like to keep my affairs as simple as possible.

Opening an account with DavySelect was very straightforward. Only problem was that they texted me a code which I did not get because I had put my phone number without the 353 in it on the form. I suggested to them that they should change this to make it obvious.

I will probably sell my online holdings over time although this would result in a less diversified portfolio.

Brendan
 

Hi Laramie,

Share certs must be lodged with DavySelect and settled on an account before the sale can take place. Once we have received the share cert, lodgement to your account typically 2/3 days for Irish and UK stocks and at least 3 weeks for European/US stocks.

Once a sale has been completed (online or phone), the standard market settlement period (typically T+2) will apply. Clients do not have the option of choosing the settlement date.

We understand that some clients prefer to hold share certs and we are very happy to accommodate trading in same. We would point out that there is no extra charge to hold these shares on your account and have them available for immediate sale if you so wish.

Please let us know if you have any other questions

Best regards
davyselect
 
I am very very late into this and my suggestion will be not much help to those leaving Campbell O'Connor.
Those looking at a low-cost online broker should look at Saxo.....I have had an account with them and find them quite good, and very keen on charges. I Like BB I am basically a 'buy & hold' investor - not put many trades through them.
 
I had a look at the Saxo trading platform on their website. I couldn't find any details about charges and commissions charged. I like to see these things prominently displayed. Maybe I am missing something?
 
How safe is DeGiro

Safe & Reliable | You can trade safely with DEGIRO

DEGIRO takes care that all your products are being held safely. All your investments are held in a separate custody company that is separated from DEGIRO.
www.degiro.ie

Safe & Reliable
DEGIRO makes sure that all of your investments are kept safe. Your investments, including the money invested in the Money Market Funds, are held separately from DEGIRO. In the event something would happen to DEGIRO, your investments will not be treated as recoverable assets to DEGIRO’s creditors.

Asset segregation
At DEGIRO you can rest assured that your investments are held securely. DEGIRO uses a separate legal entity (SPV) to hold your assets. This means they are held separate from the assets of DEGIRO. The sole task of this entity is to administer and safeguard your investments. By law, it cannot perform any commercial activities. In the event that something would happen to DEGIRO, your investments will not be treated as recoverable assets to DEGIRO's creditors and will remain in the safekeeping of the separate entity. This entity will hold your assets with third parties. Where possible or legally required, DEGIRO will require these third parties to provide for asset segregation so as to protect the investments of the clients of DEGIRO against their bankruptcy. Rules with regard to asset segregation are different in every country (both within the EU and outside the EU). If there is no asset segregation in relation to a third party in the custody chain, then the financial instruments held with that third party might be lost in case of the bankruptcy of that party. For more information, please see ISI – Investment Services.

Who supervises DEGIRO?
DEGIRO operates under supervision of The Dutch Authority for Financial Markets (AFM). Next to that, the Dutch Central Bank (DNB) the prudential supervision.
 
You must log in or register to reply here.
Menu
Log in
Register