Aug 072011
 

International stock brokers can be very inconsistent. Some boast about the ability to trade a handful of markets, while other firms barely mention that they can invest in dozens.

That’s why I put together the international stock brokers list on this site to help investors compare all the firms in detail. But the list is now rather long and going through it to pick out the best stock broker for your purpose can take some time.

So many readers have asked to me to condense it down to a few top picks. And that’s what this article is for. I’d still definitely recommend you read the full guide, since every investor is looking for something different. What I’ve picked here may not suit you.

But if you’re trying to pick one or more international stock brokers to let you invest in as many stock markets as possible at low cost and with low hassle, the firms below are the ones to look at first.

The best US online international stock brokers

Let’s start in America, since US residents have a hard time finding stock brokers who will open accounts for them elsewhere in the world (due to US tax laws and SEC regulations). But what they have on their doorstep is one of the best international stock brokers around: Interactive Brokers.

This online deep-discount stock broker covers 15 global markets. Countries offered are Australia, Austria, Belgium, Canada, France, Germany, Hong Kong, Italy, Japan, Mexico, Singapore, Spain, Sweden, Switzerland, the UK and the USA.

Interactive Brokers is extremely cheap – probably the cheapest firm in the world for most of its markets. And it has a robust trading platform, although the user interface has a bit of a learning curve.

There are a few downsides. The minimum account size is $10,000, which will be too much for some investors. It charges a minimum commission of $10 per month, so there is effectively a minimum annual cost of $120 – although given how low its fees are, it will still probably work out as cheaper than any other international stock broker, even if you only deal 3-4 times per year.

But that’s pretty much it. I particularly like how transparent and unbundled its costs are. Foreign exchange conversions are done at interbank rates plus a trivial 0.01% commission. And pretty much every market data feed you could want is available separately for the cost of the exchange fees.

Long-term investors should not be put off by the fact that it mostly markets itself to traders. I wouldn’t recommend it for absolute beginners, because their customer service team really does not want to hold your hand. But this is a good service for anyone with a bit of experience, whatever your investing style.

Interactive Brokers accepts foreign clients. Apart from the US, it is registered and authorised in several other countries including the UK and Hong Kong, so you may be directed to sign up through its local office instead.

Among the other international stock brokers in the US, EverTrade is also worth mentioning. It offers a further seven markets not covered by Interactive Brokers for telephone dealing, on an acceptable fee of $35 plus clearing charges. These are Denmark, Finland, New Zealand, Norway, Russia, South Africa and Thailand.

A couple of those are unusual – notably Russia – so at that fairly low fee it may be of interest to investors outside the US. The firm has told me it accepts foreign clients, although I have yet to use it myself.

There is no minimum account size. I’ve only encountered a couple of people who’ve invested through EverTrade, but they seemed happy with the service.

The best UK and European international stock brokers

Across Europe, there are plenty of international stock brokers. But the best place to start is Saxo Bank, which offers 22 international stock markets online: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Italy, Japan, Netherlands, Norway, Poland, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, the UK and the US.

Saxo Bank’s costs are not quite as pared down as those at Interactive Brokers – commissions in the markets that both trade are usually a little higher and it charges a 0.5% commission on currency conversions, for example. But it is still the cheapest way I’ve found to access many of these markets – especially the Nordic countries – from a online multimarket account.

I’ve seen quite a bit of criticism of Saxo Bank from foreign exchange traders, but that may not be very surprising. New retail forex traders tend to lose their money quickly and then blame it on the provider. People who’ve used it for stock market investing generally seem pretty happy.

The minimum account size is US$10,000. Like Interactive Brokers, it is registered and authorised in many countries, including the UK and Hong Kong. However, it does not accept US residents as clients.

Alternatively, if you want an international stock broker that has no minimum account size and still covers plenty of markets, consider the UK division of TD Waterhouse. It offers 13 countries for online trading – Australia, Belgium, Canada, France, Germany, Hong Kong, Ireland, Italy, Netherlands, Singapore, Spain, the UK and the US – plus Sweden and Switzerland by telephone. It will accept foreign residents, although not US citizens and residents.

Online trading fees are a flat £12.50 per trade, although be aware that the firm charges up to 1.75% commission on currency conversions – consider using a foreign exchange transfer specialist to reduce this cost. TD Waterhouse also has an offshore subsidiary in Luxembourg, Internaxx, which offers the same markets and does not charge this FX commission, but has higher trading fees that vary between markets. Compare both to see which suits you best.

The best Singapore international stock brokers

If you want good market coverage at low commissions for most of Asia, you need one of the many international stock brokers in Singapore or Hong Kong. Singapore has two that stand out: OCBC Securities and Phillip Securities.

Both offer similar coverage. OCBC Securities has Chinese B shares, Hong Kong, Indonesia, Japan, Malaysia, Philippines, Singapore and Thailand available for online trading and Korea and Taiwan available through broker-assisted trades. It also offers Australia, Canada, New Zealand, the UK and the USA, but rates on these are too high to be competitive. Use a good US or European firm for these instead.

Phillip Securities has Hong Kong, Malaysia, Singapore and Thailand online. Chinese B shares, Indonesia, Japan, Korea, Philippines, Sri Lanka and Taiwan are available for broker assisted trading. The inclusion of Sri Lanka is interesting – it’s one of only two international stock brokers I’ve yet found that yet offers that market. Australia, Canada, the UK and the US are also available, but again at uncompetitive rates.

Charges among Asian stock brokers aren’t so heavily discounted as in the US and Europe yet, but they still add to significant savings for markets such as Malaysia and Thailand. Even for expensive markets such as Taiwan and Korea, you’ll pay perhaps US$60, versus a minimum of maybe US$100-150 through the few international stock brokers in the US and Europe that can trade in them.

Both firms have a good reputation for customer service and I’ve been impressed in my dealings with them. Both accept foreign clients and I believe that may still include US residents.

OCBC Securities has an effective minimum account size of about S$3,000 (it requires a S$2,000 non-tradeable deposit from non-residents and you obviously need some money to trade on top of that). Phillip Securities has a minimum of S$5,000 for non-residents.

See my guides to opening a Singapore bank account and opening a Singapore brokerage account if you’re a non-resident and would like further information on how to sign up with either firm.

Alternatively, for Hong Kong-based international stock brokers, discount brokerage Boom – part of Japan’s Monex group – is well worth a look. It offers online trading in Australia, Chinese B shares, Hong Kong, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand and the US.

In my view, it’s a little more expensive than the Singaporean international stock brokers and the fee structure is a bit less straightforward. However, I’ve heard very good reviews from other investors for quality of service and ease of use.

Again, foreign clients are welcome and there is no minimum account size. However, I’m unsure what the current situation is with US residents, since most Hong Kong stock brokers seem to be pulling back from dealing with Americans.

Three international stock brokers for 30 countries

Unless you’re investing tens of thousands and are prepared to pay steep fees, there’s no one-stop solution for good global coverage. But a combination of three accounts from some of the firms above would give you plenty of flexibility.

For example, you could combine:

  • Interactive Brokers – for very low-cost online access where it trades
  • OCBC Securities – for online trading across most of Asia
  • EverTrade – for telephone trading in a few other interesting countries

Obviously, these aren’t the only choices. But the approach of picking a core low-cost multimarket online stock broker for US and European markets, another for regional Asian markets and then filling in other countries as you want them with one or two other international stock brokers is the easiest way to build wider coverage than you’ll get through any single account.

The three accounts above would let you trade around 30 different markets. By choosing which country you trade through which broker, your minimum commissions would be under US$10 for the cheapest markets and perhaps US$50 for the more expensive ones.

That would require a realistic minimum investment of perhaps US$15,000 across the three, mostly because of the US$10,000 minimum at Interactive Brokers. The only fixed overhead on that is Interactive Brokers’ minimum commission of US$120 per year, although you will pay custody charges on some stocks through any of the Asian stock brokers.

Clearly, this is not a solution for everyone. Most investors will never open a brokerage account abroad and for good reason – it is a big step into the unknown. But by picking the right multimarket stock brokers, it’s certainly possible to invest in a wide range of countries with minimum hassle and at a reasonable cost.

For more details on any of these firms or to look for other stock brokers, read the international stock brokers guide and look at the detailed international stock brokers comparison tables.

[Article updated to include Interactive Brokers’ addition of Singapore and Saxo Bank’s addition of Poland and South Africa.]

  14 Responses to “The best international stock brokers 2011”

  1. Dear,

    Just a question to clear in my mind; I am a non-US investor and need to trade and invest in a US-based co. that has domestic and international projects in India and elsewhere. I came to read that some brokers accept and others do not accept international investors. I deeplt in need to start investing with a reputable, international, but not expensive on share trade ASAP.

    Kindly help me to proceed and take first steps forward.

    Best regards,

    Walid

    • Hi Walid,

      Yes, brokers have different policies on accepting international investors. If you’re looking for a US-based broker, the most useful starting point is to email a large number of different brokers and see which ones say they will accept non-residents (you can find a list of many US brokers here: US online broker comparison table

      Two that I know currently say they accept some non residents are Firstrade and optionsXpress.

      Interactive Brokers, Tradestation and Charles Schwab also accept some non-residents, but may be more suited to more active traders or require larger minimum account sizes.

      Regards
      Cris

  2. hello, another quetsion if I might, do any of these brokers provide access to ipo applications for non-residents, and do any of them provide info or alerts on these ipos (I’m thinking of Europe)?

    Mnay thnaks

    Maurice

    • Hi Maurice,

      I don’t know for certain, but I think not – there tend to be practical and regulatory reasons why brokers wouldn’t want/be able to to do so (although some may offer access to IPOs from their home country to overseas investors). But for a clear answer, you would need to ask the brokers directly.

      Regards
      Cris

  3. Hi there, as a complete novice in the financial world, I could do with some advice in SELLING shares in an Australian bank that my wife holds. They are in a nominee account and the only option that is offered by them is to sell the whole holding and by postal application ..which of course would leave us exposed to a very wide fluctuation in price as it would take approx 5 days for our instructions to even reach Australia ! Is there any on-line (preferably0 or telephone way to sell these shares as a ‘one-off’ with a broker without having to open an account with them ? Thanks in anticipation.

    • Hi Alan,

      I get quite a few questions about situations like this and it’s rarely easy to find an ideal solution. In order to sell the shares through another broker, they would generally have to be transferred out of the nominee account they are in at present and into the nominee account of that broker. In theory, they could either be transferred into the account of a UK broker that trades Australian securities (I’m assuming you’re a UK resident) or an Australian broker.

      Unfortunately, neither are entirely straightforward. Cross-border securities transfers are messy (domestic transfers can be slow and inconvenient enough even without the international complication) – you probably won’t find many UK brokers interested in doing this for a one-off trade, there may be a charge for doing so and it could take some time to complete the transfer. As far as the Australian broker option is concerned, you would need to find an Australian firm that accepts non-residents (not all necessarily will), see if they will do a one-off trade (again, not certain) and after sale remit the proceeds back to the UK.

      So while I can’t say whether any brokers will be willing to help or not, my instinct is that it could be a lot of hassle to do it this way and that the option you have of a postal sale might be easier, even if it’s imperfect. If you’re concerned about price swings, have you asked whether it’s possible to give the Australian counterparty a conditional instruction – i.e. to sell only if the shares are above a certain price?

      I don’t know if they would accept that, but it might be worth asking. Alternatively, I assume they won’t accept a fax instruction?

      Regards
      Cris

  4. My wife and I are retired in our 60’s with a healthy net worth and investments, including IRAs at Fidelity. We are U.S. citizens but do not have a residence in the U.S. We reside year-round in Mexico. Now Fidelity has decided not to do business with non-resident U.S. citizens. They will not allow us to buy or trade mutual funds or stocks. They will only sell what we already own. I tried Merrill Edge at Bank of America, and they have initiated the same policy. Morgan Stanley has international traders who will handle us, but only if we can transfer $1 million in assets, which we can’t. What do we do? any suggestions?

    • Try Schwab? You are not alone in this, and the issue is often debated at bogleheads.org, a personal finance forum of very knowledgeable people.

  5. hello
    i am a venezuelan citizen and resident, i am trying to sign up an account for online trading, but my surprise that most of US based online brokers, only accept US residents. I emailed Saxo bank ( after reading your site) on their spanish web and they only accept accounts for more than 100,000.00 $US s, any advice you may give or recommend to me about online broker ?

    • Looks like Saxo’s Spanish office requires a $100,000 minimum, but most other countries are typically around $10,000. It might be worth trying another office – the obvious choice is the Danish head office – and seeing if they’ll accept you for a more reasonable account size.

  6. Hi,
    I am not sure what is meant by commission on currency conversion. I am a Malaysian. If I invest in shares quoted in Euro and transfer direct the sum in Euro. Will the stockbroker say, TD Waterhouse deduct commission off this Euro sum?
    Also, will there be capital gains if I trade via a UK broker although there is no capital gain tax in my country?

    • Currency conversion commission is the extra mark up your broker charges when converting from one currency to another. So if you have dollars in your account and buy shares in euros, the broker generally won’t convert your dollars to euros at the interbank rate, but will add a mark up. The size of the mark up varies between brokers.

      If you pay euros directly into your account to buy shares in euros, there will be no additional currency conversion commission charged by the broker, since no conversion will take place within the brokerage account.

      Capital gains tax is generally charged by your country of residency, so no, there should be no UK tax in the situation you describe. There are some situations where countries charge foreigners capital gains tax on profits, but it would be the country where the company you are investing is registered that does that, rather than the country where your broker is based. The same applies when taxes are withheld from dividends paid to foreigners (which is far more common than levying capital gains taxes on foreigners) – it’s the country where the company is registered that takes the tax, not the country where your broker is based.

  7. Hi,
    I’m a UK citizen with a number of shares in HP initially bought through an employee share scheme when with Digital many years ago. As the shares in Digital in the 80’s were at one stage around $180 the investment hasn’t exactly been stellar! However, I haven’t touched them but now having retired want to try investing in something else as a potential investment for my grandchildren’s benefit in the future. I’ve taken out a subscription in the Motley Fool Rule Breakers and plan to sell the HP shares and re-invest in stocks advised by MF RB in US dollars. The HP shares are currently managed by the Wells Fargo Shareowner Services. I’d appreciate if you would advise an appropriate international based broker who can manage the US dollars and my investments guided by MF RB. Presumably I just request Wells Fargo to make the sale and to deposit the balance in a US dollar account I create with the chosen broker. Thanks for your guidance.

  8. TD International has increased its share dealing charges and is no longer competitive.

    US, Canada, UK €14.95 + 0.10%

    Euronext (France,Belgium, Netherlands),Xetra (Germany) €24.95 + 0.10%

    Other Markets €49.95 + 0.10%

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