USA direct shares/stocks purchase from Australia

MITM on 06/07/2020 - 17:08
Last edited 06/07/2020 - 17:09

OK, so I want to get my slice of the growing American Pie, but how's it done cost effectively and efficiently ?
Could add NABtrade to my NAB account, but seems a bit clunky and who uses Big4 anyway ?
Could go through my Citibank account but they charge $75 + costs and takes days etc.
So looking around for an online broker and there aren't many avenues for Australian investors - it's like we're blacklisted and probably something to do with over the top regulations making it too difficult for brokers to set up shop here. TD Ameritrade have been and gone twice on Aussie soil.

And there only seems to be Etorro or Stake but again isn't instantaneous.

Now going back to Citibank - within Citibank Worldwide - transfers between Citi accounts anywhere in the world are (almost) instantaneous and with good FX rates according to their website.
So, is there a US Broker utilising Citigroup to accept cash deposits into the holding account for placing trades?

Interested to know a good work around or other suggestions.
Or there may be a Reddit or whirlpool forum someone can point me to.

Only looking to purchase 1 or 2 stocks and hold.

Financial

Comments

  • Your Friend on 07/07/2020 - 08:25
    +2

    You should consider looking into some ETFs that you can get on the ASX that are focussed on the US. There are a few like NDQ that don’t have too many holdings.

    • ribze1 on 07/07/2020 - 21:57
      -2

      NDQ has 100 holdings, just saying.

  • margiela on 07/07/2020 - 08:32

    I have had great experience with Goodments. They will link to a card/bank account for instant conversion and purchasing. There are only two caveats:

    1. You can only purchase stocks they consider to be "ethical";
    2. You have to purchase at the spot price.

    In saying that, their conversion rates are better than any of the others I've used, and most companies seem to fall into their ethical investment category anyway.

    Edit: I should add that afaik, they are a mobile only platform unlike the others.

  • Raj09 on 07/07/2020 - 08:35

    I used my commsec account. To all those who say that there is too much risk in the us stock market, there is so much growth in there. Eg look at msft and adbe

  • andrek on 07/07/2020 - 10:13
    +2

    If you plan to buy and hold - beware of the annual account keeping fee. I had an account with Commsec which was good for trading US shares, but they would charge something like $50 if you don't make at least one trade a year.

    Stake doesn't have that fee, so you won't be penalised by just buying and holding and not trading.

    • Raj09 on 07/07/2020 - 21:10

      I top up every 6 months

  • dr on 07/07/2020 - 10:15

    IG - https://www.ig.com/au/welcome-page

  • mansonisdf on 07/07/2020 - 10:16

    How does one report / complete tax returns? Do you need to fill in a US tax return and also an Aussie tax return?

    • andrek on 09/07/2020 - 07:39
      +1

      No, only tax return in AU, assuming you are not US resident or citizen. US takes some taxes from any dividends, but you can avoid that if you fill out some paperwork. I think it gets reconciled in AU tax return anyway.

  • popsiee on 07/07/2020 - 10:21

    Don't OP join all the pros's who have shorted Tesla the last 12 - 18 mths and are burn't into the ground :)
    Never stops going up .

  • MementoMori on 07/07/2020 - 10:25

    Does anyone know of a service where you use a Credit Card to purchase shares in the US?

    (I know a great USD Credit Card).

  • moppet on 07/07/2020 - 11:03

    I opened an account with Etrade USA via their Hong Kong branch (etrade.com) and transferred money when the exchange rate was a lot higher many years ago. There are no account keeping fees and low brokerage depending on your level of holdings. Dividends are paid directly into the account hence no transaction or exchange rate fees. Worth investigating.

    • bohn on 07/07/2020 - 11:36

      hence no transaction or exchange rate fees

      There may be no fees, but you still need to keep track of the exchange rate for dividends.
      If you use something like Sharesight it does it for you automatically.

  • MND on 07/07/2020 - 11:42
    +1

    I've used Nabtrade and Comsec. Nabtrade charges 14.95 to buy US / British stock which I think is a great (however Im only a small investor). I'm not that smart at investing but I found Nabtrade to be very user friendly. Comsec is also good, but I prefer to keep all my stock in one location rather than signing onto many different sites.

    Nabtrade has a drop down selection to switch between International and Local ASX which is great as, Im also getting into US stock since the march big drop in stock price. Comsec there is a bit more navigating that needs to be done in order to switch between the two.

    Neither comsec or Nabtrade charge any fees apart from brokerage. Comsec does have its percs as I wanted to buy stock off the TSX in which nabtrade doesn't support. However if they do, I will transition my comsec stock to nabtrade.

    Something I noticed is keep the format of your name and address the same across all platforms for easier transferring of stock from one broker to another. This is a small issue that can make transferring stock from one broker to another that much harder,

    • bohn on 07/07/2020 - 11:53
      +4

      Nabtrade charges 14.95 to buy US / British stock which I think is a great

      They also rip you on the currency fee.
      https://www.nabtrade.com.au/investor/support/exchange-rate

      So a $5000 trade, nabtrade conversion will cost you $25 to $40 extra.

      • OrderedChaos on 07/07/2020 - 19:43
        +2

        I'd stay away. It's diabolical..

        NAB website…
        International trades will incur a foreign exchange conversion spread of between 0.50% to 0.80% of the trade transaction value.

        NAB PDS (page 9)…
        Up to 3% of the transaction consideration value. This amount will be embedded
        into the exchange rate quoted to you by NAB

        What???

        https://www.nabtrade.com.au/investor/pricing

      • MND on 08/07/2020 - 12:41

        It all depends on how much you borrow; if you purchase < 5000 worth of stock then the exchange fee is 14.95. My purchases in all cases are < 5k.

        The currency fee for some shares in which I bought 2k worth was: 1 AUD : 0.6327 USD dated: 24th April 2020. When comparing this exchange rate with the XE website on the same day: 1 AUD = 0.6375872147 USD.

        I haven't sold any of my international stock yet, but when I do Ill post all the fees applicable.

  • barghunt1 on 07/07/2020 - 11:58
    +2

    Some brokers are offering a product called tracrs (transferable custody receipts). I haven't used this product but I thought I would add it to the list for information purposes.

    A tracr allows you to buy a beneficial interest in a us stock in aud. The tracr uses the chess system and is listed under you hin. There is a limited list of us stocks available.

    https://www.tracrs.com.au/

    • jerrus on 07/07/2020 - 12:25

      I'll second that! I worked at the share registry when they launched these and they sounded really efficient and secure with very little loss of dividend's as they were getting the exchange rate at almost cost price.

      https://www.tracrs.com.au/

    • jerrus on 07/07/2020 - 16:54

      Also unlike interactive brokers etc there is no that they go bankrupt and you don't get anything back for years while there is a liquidation processed.

      • OrderedChaos on 07/07/2020 - 20:00

        Re IB and others going bankrupt -

        My understanding -
        ASIC requires that all Aussie registered companies hold client cash in segregated bank accounts and shares in a custodial arrangement (generally) with the execution broker in the US e.g. Citibank, BNP Parabas, etc. I understand that they are required to disclose client holdings daily here in Aus. Unless there's fraud client money and holdings should be safe from liquidation, etc. That doesn't mean it can't all go wrong, and I'm a very careful bugger, which is why I don't have my buy and hold positions with them.

        The reality however is that there is safety in numbers. The larger online brokers, like IB, have operations in a multitude of other geographies and would have passed financial scrutiny there. I suppose it's down to how strong we believe controls are here. I can't answer that.

        Anyway my thoughts. Happy to be corrected.

        • bohn on 07/07/2020 - 21:13
          +1

          Cash is segregated.
          I just think they should apply their SIPC insurance to all clients, but they don't. Many people are unhappy about it, the same thing happened with IB Hong Kong - people who previously had SIPC protection when they were clients of IB USA lost it once they formed IB HK. They really should be putting their clients minds at ease and assuring them that they have all the protection and so on.. but nope.

          All they offer Aussies is that 'Clients of Interactive Brokers Australia (IB Australia) may be able to access compensation available under the National Guarantee Fund (NGF)'. This relates only to ASX shares.

          The larger online brokers, like IB, have operations in a multitude of other geographies and would have passed financial scrutiny there

          Schwab is another such broker, and they offer the protections mentioned above. I'll put my long-term shares with Schwab, and will possibly use IB for some Options trading whilst I still hold a couple of EU shares with them. As previously mentioned, I also like how Schwab can participate in DRPs. IB will not enable that for Aussies.

  • Morven on 07/07/2020 - 14:36
    -1

    Perhaps it's a cheaper idea to invest in ASX stocks that you think will benefit from all the US stimulus. For example, those that sell raw materials into US industries set to benefit from the flood of cheap cash from the Fed. You'll pay much less brokerage, possibly benefit from your local knowledge, and (probably) won't be investing in a country where COVID-19 is out of control.

    • watwatwat on 08/07/2020 - 20:34

      Schwab brokerage is free.

      • MITM on 08/07/2020 - 22:07

        Needs USD$25k deposit to open an account. How do you get around that ?

        • inventel on 09/07/2020 - 19:44

          Apparently they don't enforce it, but it depends if you want to risk it. So whilst not a workaround per-se, the way I did it was to use another broker for a period of time (I had both a Commsec International and Stake account), and once you have over $25,000 in shares, open up a Schwab account and transfer the shares over. I called up and they confirmed that this was an appropriate was to reach the minimum.

          Only downside is that there may be a fee for transferring. For me, the transfer from Commsec was free, but I was charged $100US for the transfer from Stake. Maybe they cover the costs of a single transfer? But for me it was worth it. The Stake FX fee and spread is pretty bad (normally over 1% but the fee varies with the exchange rate, plus remember you pay it on the way back as well), and I've found the Schwab spread to be extremely reasonable, so in the long term it will be better. Not to mention the simplicity of having it all in the one place (Stake wanted a 1% fee of my entire transfer value to transfer from Commsec, so transferring everything to Schwab was the cheapest way to get them all in the one place)

        • bohn on 09/07/2020 - 19:51

          It's not enforced.
          You can just deposit less.

  • [Deactivated] on 07/07/2020 - 15:53

    IG or IB man… Easy.

  • OrderedChaos on 07/07/2020 - 19:32

    I opened a Commsec account for long term holdings. Commsec commissions are ridiculous however palatable if it's buy and hold. They use Pershing in the US. Nothing to write home about. It's a seriously bare bones offering.

    I have an Ameritrade account, created while I was resident in the US. It's an awesome cost efficient platform but is not open to Aus residents at this time.

    I looked at IG, CMC, Saxo, IB and a couple of others. Decided to go IB for frequent trading - great commissions and exchange rates. Didn't mess me around. 2 day account opening no "W8 Ben takes weeks" rubbish. They do have a US$10 per month account fee, which is offset by any trading commission you incur. Had almost decided on CMC however their fees shared telephonically didn't match the fine print and the account opening time wasn't as rapid as IB. CMC were also impossible to reach a couple of Friday's ago.

    Anyway hope that helps. Did a deep dive before committing.

  • Briefcase Mong on 07/07/2020 - 21:04

    Why don't you just buy an ETF that has NASDAQ stocks such as the NDQ or FANG ?

  • drprox on 07/07/2020 - 21:28
    +2

    How much Tesla you buying mate?

  • Penguin30 on 07/07/2020 - 22:31

    www.interactivebrokers.com pretty simple open account trade/invest.

  • diceman99 on 08/07/2020 - 10:47

    Wait for earnings season and see P/E ratios skyrocket and prices plummet.
    If you don't know what a P/Ee ratio is stay out of the market.
    Etoro is ok. But these are not shared these are share derivitives.
    Saves on having to have a U.S tax return filing but less secure than a share ownership

  • [Deactivated] on 08/07/2020 - 11:15
    -1

    Pay a friend in western union to buy stock for ya in USA.

    • TheAccountant on 08/07/2020 - 14:15

      You will lose a chunk as fees.

      • [Deactivated] on 09/07/2020 - 11:37
        -1

        Not to direct agent.
        Or to bank transfer.
        Hell you can wire upwards of 50.000

        The fees are cheap as hell.
        What western union was once they have lifted their game immensely now.

  • pizzaking on 08/07/2020 - 17:32

    I don't think there is any need to use an Australian broker.

    It can cost a bit to send money though. If you have to wire transfer from your own account, CBA offer multiple currency accounts with a $6 wire fee (plus other fees by partner banks). You can populate them using remit services like Transferwise et al. (WorldFirst have a good rate I think). I don't recommend using a referral code as thanks to 'money laundering/terrorism' laws they can ban you on a whim without telling you why.

  • babolimp on 09/07/2020 - 01:22

    i used to use optionsxpress and they were great, but i see they are shut down and now they send you to schwab instead. not sure if it's the same company or they are just recommending them.

    alternatively if you are just buying and holding you might want to consider an index fund for the US share market. it will return 10% PA or so. the good news is you don't need to buy these overseas you can simply buy them as you would a share on the ASX. look up ASX:VTS.

    • bohn on 09/07/2020 - 01:58
      +1

      schwab bought optionsxpress I think, and they use the Streetsmart Edge client which I believe is mostly the same as what was used at optionsxpress.

  • [Deactivated] on 09/07/2020 - 15:51
    -3

    buy at your own risk - dont come crying when you lose all your money

  • monty168 on 09/07/2020 - 21:46
    -2

    +1 for commsec.
    Works fine. If buying and holding long term, I would prefer a more reputable platform.

  • surethang on 10/07/2020 - 13:32

    Anyone have experience with Tradezero?

    Pros? Cons? Thoughts?

    Thanks.

  • Bystander on 13/07/2020 - 10:39

    FirsTrade looks OK.
    From here
    "Can a foreign resident open a Firstrade account?
    Yes. Although, all funds must be deposited in U.S. Dollars. All Foreign Account Applications MUST include a W8-BEN Form and Online Service Agreement, which you can download from our Forms Download Center. A copy of your valid passport (photo and signature pages) is required for all foreign residents."

    They have $0.00 trades

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