Execution only brokerage account

F

fistophobia

Registered User
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I recently got notice of increased brokerage account, maintenance fee.
Its 4 times what I currently pay. Broker is citing MIFID ii as the reason.

Any suggestions for a lower cost account, execution only?
I would pay about e100 per annum.

thanks
 
fistophobia said:
I recently got notice of increased brokerage account, maintenance fee.
Its 4 times what I currently pay. Broker is citing MIFID ii as the reason.

Any suggestions for a lower cost account, execution only?
I would pay about e100 per annum.

thanks
Click to expand...

Which broker is it?
 
fistophobia said:
I recently got notice of increased brokerage account, maintenance fee.
Its 4 times what I currently pay. Broker is citing MIFID ii as the reason.

Any suggestions for a lower cost account, execution only?
I would pay about e100 per annum.

thanks
Click to expand...

Reporting requirements under MiFID II are quite onerous. You should expect all MiFID II firms to increase their fees next year to cover the increased cost of reporting.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
SBarrett said:
Reporting requirements under MiFID II are quite onerous. You should expect all MiFID II firms to increase their fees next year to cover the increased cost of reporting.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
Click to expand...
Agree, just went through further queries with Goodbody. While execution only service remains at €73.5 for this year I am fearful it will rise. I may have to bit the bullet and sell my equity holding and get out and find something else less costly.
 
Nordkapp said:
Agree, just went through further queries with Goodbody. While execution only service remains at €73.5 for this year I am fearful it will rise. I may have to bit the bullet and sell my equity holding and get out and find something else less costly.
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Can I check: you're paying €73.50 a year inclusive of VAT? I'm paying €20 a quarter +VAT!

(And secondly, a change is fees should not change your investment plans unless they're materially impacting on any gains you make.)
 
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rob oyle said:
Can I check: you're paying €73.50 a year inclusive of VAT? I'm paying €20 a quarter +VAT!

(And secondly, a change is fees should change your investment plans unless they're materially impacting on any gains you make.)
Click to expand...
Yes, just paid it.......€60 + vat, same as last year. Execution only online account.
 
Nordkapp said:
Yes, just paid it.......€60 + vat, same as last year. Execution only online account.
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Sorry, thought you said you're with Davy (as I am). If they suggest raising their fees this year I'll ask why they're already 33% more expensive than their old rivals!
 
rob oyle said:
Sorry, thought you said you're with Davy (as I am). If they suggest raising their fees this year I'll ask why they're already 33% more expensive than their old rivals!
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I need an exit strategy from these brokers, getting too expensive, eating into dividends. Can see it being 35€ per quarter shortly.
 
I read the terms and conditions again - its worse than I thought;

e100 per quarter plus VAT, or 0.40% of value of investments. Thats a few thousand per annum. No thanks.
 
fistophobia said:
I read the terms and conditions again - its worse than I thought;

e100 per quarter plus VAT, or 0.40% of value of investments. Thats a few thousand per annum. No thanks.
Click to expand...

Wow, Davy "Select" alright, they don't want small investors.
 
Nordkapp said:
Yes, just paid it.......€60 + vat, same as last year. Execution only online account.
Click to expand...

That is what I am paying also.

While I know DeGiro would be cheaper, I do take a certain level of comfort in dealing with a Dublin based broker. That said, I would not be prepared to pay much more than I am currently paying for an execution only service and particularly given most of my activity is over the internet and not even person to person.
 
MrEarl said:
That is what I am paying also.

While I know DeGiro would be cheaper, I do take a certain level of comfort in dealing with a Dublin based broker. That said, I would not be prepared to pay much more than I am currently paying for an execution only service and particularly given most of my activity is over the internet and not even person to person.
Click to expand...

The compliance costs, PI, Central Bank levies, Ombudsman Levy, Investor Compensation Levy etc, rent, rates etc are all the same irrespective of whether you have an online account or not.

There are a huge amount of costs involved in just running a financial services firm.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Guys,

I appreciate what you are saying, but I would also remind you of other important considerations:

  • firms can reduce costs significantly through automation and use of technology.

  • the costs that Steven refers to above, are most likely costs that will be incurred regardless of whether the small execution only customer remains or not. Do these costs all increase or decrease perfectly in line with the number of customers, or value of the shares and cash held in execution only accounts ?

  • firms may see a value in providing an execution only service as a "loss leader" to attract in future business, much in the same way as Banks do with current accounts.
 
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Hi Mr Earl,

How are things?

In my experience, it’s rare for an execution only account to migrate across to managed status. EO clients just sit on the provider’s platform. The increased obligations under MIFID II make it uneconomic to let non-fee paying clients remain in situ, which means the days of nominal fees are over.

As an aside, MIFID II is a farce in my view; dreamed up by bureaucrats and compliance people who’ve never met a client in their lives. The net result will be less accessible investment advice in a low interest world where it’s desperately needed.

Gordon
 
Hello Gordon,

All good thanks, hope same with you.

I was thinking more in general terms, than moving from execution only to advisory/managed. I suppose that's the obvious one, but most reasonable size firms provide a range of wealth management services, so I was actually thinking more along those lines rather than just the dealing account in isolation.

Interesting point you make about MiFID II. Perhaps there needs to be some sort of "basic" level service catered for separately, but would the current providers really want to be in that space (low fees, basic products etc.) ?
 
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