Hi all,
I lead a small operations team at an online brokerage firm that deals purely in US shares and charges no brokerage.
We have been around for 3 years, based in Sydney and I've been part of the team for close to a year.
Feel free to ask my anything you've ever wanted to know about what goes on at a brokerage firm.
P.S : Didn't state the companies name because I didn't want it to sound like a plug..
can you believe some customers think it's "steak"?
Good businesses could also have steak.
Good steaks are rare.
Where is the best place for newbies to starting informing themselves about shares and how they work?
Read, read, read.
This list of books might be a good start :) I'm sure there are other even better books out there
Got an Ebook reader not long ago, need some content for it anyway
Thanks! :)
The $20 ACH deposit fee irks me. When it's time to invest i'd typically only deposit US$500 and that's a decent % taken
Does the company actually have such high costs for the transaction, or is it just to bump their revenue since they won't be making any revenue from cc or currency exchange fees?
We have to manually review each transaction that comes in and then ensure we have the appropriate documentation on file for the customer (ie : their verified) ; or even review their transaction if it's from another party (ie : Wife/Dad transfer them USD) and either reject/accept the transaction. Once done, we have to allocate it from our Master Account to their Stake account.
generic question , how did you feel about getting into a startup?
I don't know about that industry in particular but some people would be hesitate to jump into a unknown ?
Usually people stick with big companies. Im guessing you are relatively young ? Bit of a non issue for yourself?
I worked in 2 big financial instituitions straight out of uni.
I couldn't fathom the suited up life, with myriads of wheels to turn, tens of weekly(and even daily) meetings and close to no agility.
After 6 years of this, I quit to launch my own startup in March last year. T'was a great journey (even got on TV) but due to a disagreement with my Co-Founder that ended pretty quickly :(
I then got approached by the guys at this firm and have been here since.. a part of me loves being part of an unknown and trying to build a brand and establish it, another part likes the feeling of being able to control customer experience at a front-end level but still be able to make changes to the product/experience as a whole relatively quickly.
US shares only? I'm sure there's a catch to the free brokerage. Do you get much business despite AU/US government insisting on a lot of documentation?
There's very low brokerage in the US. If it's the company I'm suspecting they mostly make money off the FX.
Yep, we aim to be the best place to trade US shares outside of the US.
We do make some money off FX transfers into our platform, we also make money from Cash sitting in USD wallets (prior to those funds being invested)
Their FX rates are the highest around.
I believe our FX rates are slightly higher than the competition but this is offset by the fact we do not charge brokerage.
It all comes down to how often you trade, what you expect out of a platform. Prospective customers should do their research before choosing their platform.
Any good tips on shares to look at?
Can't provide any recommendations, DYOR.
Some say Beyond Meat has a good chart, others say MongoDB has a great chart. Shopify has been doing wild.
How does the firm make money if no brokerage?
We make money primarily through 2 ways :
Yep this is the company I work for :).
So i can use a credit card?
Would be good to hse a cresit card with no FX charges like 28 degrees then, unless i am missing something
We take the funds from your Credit/Debit card in AUD and do the FX.
You can't use your CC to deposit directly in USD.
You can deposit directly in USD using a WIRE transfer if you already have funds in the US, or through a 3rd party FX remitter.
@grocerygetter: May I ask is there any risks here?
For example what if your startup bankrupted?
will your customers lost all their Balance?
@[Deactivated]: You need to know if they are CHESS sponsored I guess? Who actually owns the shares that you buy though this company (you or them?)and who is underwriting them if they do go south.
@[Deactivated]: What if Stake was no longer around?
If Stake went down, you would still have access to all your cash and securities. We don't ever touch or hold your money.
If Stake was no longer around you would still have access to all your assets (Drivewealth access will be established for customers if anything happens to Stake) - All you would need to do is arrange the FX transfer from your local account to DriveWealth.
does blue horseshoe really love anacott steel?
LOVES IT!
LOOOOOOOOOOVVVVVVVVVVVVVES IT!
What’s the best way to put $100 towards a vanguard ETF every month without paying ridiculous amounts of brokerage?
Do you scrunch or fold?
Scrunch.
You're a savage.
Sitting or standing?
Custodian model (e.g. like IG)? If so, what happens in the case of liquidation?
Can't see anywhere that they're regulated by ASIC, which is a bit of a red flag.
We are regulated by ASIC through as an Authorised Representative of Sanlam Private Wealth.
How do you determine the exchange rate you will use when funds are transferred into the trading account in $US?
Do you reveal the actual exchange rate before the fund transfer is executed or would I only find out after the transaction is completed?
My concern is that the exchange rate is unfavourable as you explained it is one of the avenues your company profits from.
Hi,
We actually show the spot rate we are offering at the time (and we pull this directly from OFX)
We don't modify the spot rate but instead show you the FX fee we are charging on top of the spot rate.
Transparency is the name of the game for us.
So how much is the fee?
The fee is 70c USD for every $100 AUD.
What proportion of your FX is performed/balanced internally without needing to be externally exchanged?
0% all of it is customer funds that are sent to the US.
I joined stake last July after meeting COO Dan Silver, and was impressed by ambitions of stake and so far I am getting positive 20% returns on my shares.
But apart from that, how have you found their service? Responsive? Helpful? Professional? Any problems? Anything you wish they did better? Anything other brokers offer that they don't?
I know I work there but maybe I could answer?
We aim to respond same day (during business days)
We do have our problems but certainly go above and beyond to resolve them.
I know we have had customer's who've complained that they get robotic answers from some other brokers out there but we take the time to listen, diagnose and rectify issues that we ourselves may not have necessarily experienced before.
We offer free brokerage on US shares, which I believe no other brokers offer in Australia.
That being said, we are far from perfect but a focused team attempting to get there.
Do Stake holdings need to be reported to the ATO or only if you are paid dividends or sell stock?
Are you taxed in the US and Australia or does the 15% withholding tax take care of US taxes? If so, is the 15% withheld for you?
Not giving advice here bit factually speaking you should be reporting them if you've made any sort of income - Dividend, Capital Gain or otherwise.
The 15% withholding tax should cover it, as long as you aren't a US resident. Specific exemptions may apply. Contact your accountant for further advice specific to you
Thanks - does Stake withhold the 15% tax for investors?
Yep, we should do.
Hope you get some equity, sounds like a good business to have a stake in