Some people are not really satisfyed with local brokers. They want more. For these people we would like to give a talk about foreign brokers.
So, foreign brokers that remotely open accounts for Russians are as follows:
- Interactive Brokers
- Charles Schwab
- Merrill Edge
- TD Ameritrade
- Ally Invest
And what are the benefits of trading concerns? Let us get this straight.
- The investor gets access to the American and global stock exchanges, excluding from the chain of sub-brokers.
- The investor gets access to a selection of assets that is tens to hundreds of times larger than that of any Russian broker.
- An investor buys securities that are tens or hundreds of times cheaper for commissions than Russian ones.
- An investor buys securities that are managed much more accurately and efficiently than domestic ones.
- The second advantage is that the amount of account insurance is $ 500,000 (including up to$ 250,000 of cash insurance).
- Some brokers additionally insure themselves in insurance companies, in this case the compensation may be more.
- Investors transfer part of their assets to a more reliable country and economy, where the attitude to private capital is completely different and the interests of investors are protected as much as possible.
- The reliability of a Western broker may be higher than that of a domestic one.
- Among the disadvantages is that most brokers will have to communicate in English. Perhaps some brokers will stop opening accounts for Russians. Some may be afraid of sanctions risks.
- There are also difficulties in paying taxes. In order to avoid double taxation, the investor will have to fill out their own tax returns and pay 10% in us dollars and 3% in rubles
- You can not just mention the various commissions. They are quite high. For foreign brokers, a Commission of several dollars per transaction is the norm. However, this is not critical for portfolio investors. And there is also a Commission abroad that motivates you to be active. It is charged if the account has less than the specified level or if there are not enough transactions. The amount of such Commission can be equal to $10 or $100.
- Withdrawal of funds is a separate story. For him the foreign brokers generally charge a Commission in the amount of $10-100. You should also keep in mind that when adding funds to a foreign brokerage account, you will have to pay the Bank for the transfer of funds. This service is unlikely to cost less than $15.
In this article we have made a list of the 8 beat US brokers and analyzed all the cons and pros of them. We hope it will be useful for you.
Wish you good luck in investing!