Is it worth switching portfolio to DeGiro?

Discussion in 'Investments' started by gnostic, Aug 21, 2017.

  1. gnostic

    gnostic New Member

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    I have a portfolio with Cantor Fitzgerald who use Pershing as custodian. Fees are getting out of hand. Would I be better off transferring the lot to DeGiro?
     
  2. rob oyle

    rob oyle Frequent Poster

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    How many individual investments are you holding, what sort of functionality do you want (i.e. scrip dividends) and how much is it costing you at present? I presume you hold your own share certs?
     
  3. gnostic

    gnostic New Member

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    I have 6 individual investments. I want to be able to trade, buy, sell, receive dividends and exercise scrip dividends. Fees for 2017, described as Advisory and Administration fees came to €360. (2016 €259, 2015 €190) This is on top of any commission and charges for individual trades. I have not seen a share certificate for years, as far as I know they are held by my brokers custody agent.
     
  4. Protocol

    Protocol Frequent Poster

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    DeGiro fees are very low compared to what you are being charged.

    2.50 pa per exchange (excl. ISE) is the only fixed fee.

    https://www.degiro.ie/fees/

    Trading fees are very low.

    You should check out the scrip issue, how that works with DeGiro.
     
  5. AJAM

    AJAM Registered User

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    I've been with Degiro for 2 years. There fees are very low. The platform, over the 2 years, has become much easier to use. I would recommend that you opportunistically switch to Degiro. i.e. every time you want to buy, Use Degiro. Sell anything that won't generate a large gain (or offset gains with losses) and move it to Degiro.
    Then take advantage of the 1270 CGT tax free gains each year to continue to sell down your positions.
    Basically move as much as you can, as quickly as you can, but without incurring large CGT bills.
     
  6. Dman35

    Dman35 Frequent Poster

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    I'm currently with SAXO Bank and while I find the trading platform very good the charges in DeGiro are much lower..

    However I currently have about 20 open positions with SAXO Bank. Has anyone transferred their holdings to DeGiro??? Is it hard to do? does it turn out very costly?

    Tks
     
  7. Paul F

    Paul F Registered User

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    @gnostic Per this document Cantor appear to charge €25 per holding to transfer a holding to another broker (or €75 per holding if it is a foreign stock).

    @Dman35 For Saxo it appears to be €50 per holding (see here).

    DeGiro also charge €10 per holding when receiving the stock. In theory you just have to send DeGiro this form, but you may also have to send a form to the broker you are leaving.

    You should confirm the charges yourself and not rely on the above figures. You need to weigh the costs of doing it this way versus the costs of selling up with your old broker and buying the same stocks again with DeGiro. The latter approach will entail commissions and could trigger a capital gains bill.
     
  8. joe sod

    joe sod Frequent Poster

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    Is it not the case with the bed and breakfast rule with regard to capital gains and losses that if you sell say 1000 shares of stock A on a particular date, then within 1 month you buy back 1000 shares of stock A, there is no capital gain or capital loss. Therefore in order to harvest a gain or loss you must sell the shares and wait longer than a month before buying them back. Therefore in this scenario with regard to de Giro is it not possible to sell shares with Cantor Fitzgerald and ensure that you buy back the same shares within the month to not worry about CGT.
     
  9. Paul F

    Paul F Registered User

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    No, you cannot avoid triggering a capital gain just by buying back the same stock within 28 days.

    What you may be thinking of is that buying/selling within 28 days modifies the normal first-in-first-out (FIFO) rules, which apply to situations in which you bought blocks of shares in the same company at different times. dub_nerd explained the rules well here.
     
  10. joe sod

    joe sod Frequent Poster

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    Ok thanks for that, Im sorry for hijacking this thread, but another question with regard to FIFO rule.

    If I buy 100 shares of stock A for $100 on sep 1 2015,
    then I buy 80 shares of stock A for $60 on feb 1 2016,

    so now I own 180 shares of stock A
    then I sell 100 shares of stock A on May 1 2016 for $50.

    My understanding of FIFO rules is that I can use the loss from the first shares I bought on sep 1 2015, therefore I can harvest the capital loss of $50 on these shares for a total CGT loss of 100x50 = $5000.

    then on june 5 2016 (after month waiting period) I buy back 100 shares of stock A for $48.
    therefore I own 180 shares of stock A again, but I have harvested the capital loss on the first 100 shares I bought. I presume this is perfectly legitimate
     
  11. Paul F

    Paul F Registered User

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    Last edited: Sep 14, 2017
    Yes, in the scenario you describe you have a capital loss of $5000, which can can offset against future gains on the disposal of any shares (or anything you sell which would attract capital gains tax, for that matter).

    A few points to note:
    • The loss can be carried forward indefinitely and used in the current year or in future years (unless the law changes)
    • You must use the loss first before using your annual CGT exemption (€1270). This means that if you don't have realised capital gains of at least €5000, you will be missing out on the chance to avail of your CGT exemption. This is a case for not realising the full $5000 loss in one go.
    • For the purposes of calculating CGT, incidental costs of acquiring an asset are added to its cost, and incidental costs of disposal are deducted from the proceeds. These "incidental costs" include stamp duty and brokers' fees. (It is not clear if account maintenance fees can be included.) Taken together, these can lower your CGT bill slightly.
    This thread discusses the pros and cons of the "tax loss harvesting" approach you are thinking of. I personally believe that it is worth it, provided you don't miss out on your annual CGT exemption and that your broker's commissions aren't huge. You aren't actually eliminating the CGT; you're deferring it into the future.
     
    Last edited: Sep 14, 2017
    joe sod likes this.
  12. joe sod

    joe sod Frequent Poster

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    thanks for your response paul, i thought that this was correct but it does seem a little too good, in that you have harvested the loss but still end up owning the same number of shares. Obviously its not that good in that you have lost money on a losing investment so far
     
  13. Dman35

    Dman35 Frequent Poster

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    Tks very much for your reply Paul F.. Much appreciated..