International stock broker updates – Charles Stanley, Daniel Stewart, HMS Markets, Finasta, Orion Securities

There are a number of updates to the directory of international stock brokers. These include details of five more firms – two from the UK, one from Luxembourg and two from Lithuania – with a few more on the way.

Charles Stanley is a long established UK broker and it offers international stock trading for much of Asia, Greece, Poland and South Africa as well as the usual developed European and North American markets. This is a full-service private client stock broker, which means that fees are a little than the discount stock brokers and you’re probably looking at minimum trade sizes of £2,500-5,000 to be cost effective.

On the other hand, once you factor in better execution and other costs, firms such as these may be more cost-effective for larger international investments. For example, the currency conversion charges that most discount stock brokers charge should be far less with a good private client firm.

Daniel Stewart has traditionally been an institutional stock broker, but has a growing private client business – although you will probably need to be looking at trading £5,000-10,000 minimum blocks.

The institutional business covers a wide range of international stock markets, including several Eastern European countries (Czech Republic, Estonia, Hungary, Latvia, Lithuania and Poland), hard-to-trade ones such as Brazil, Chile, Egypt and Turkey, and almost all of Asia – including, unusually, Japan’s Osaka Stock Exchange. Most of these should be available to retail investors, except where local regulations prohibit it (eg India).

The Luxembourg addition is HMS Markets. This offers a decent range of European and North American markets, but is really focused on trading rather than international reach. It’s probably of limited interest to most international investors, but some readers have wanted to compare it to Internaxx and Keytrade, so it’s been added to simplify that.

Lastly, Finasta and Orion Securities are international stock brokers based in Lithuania. They offer international stock trading for a huge number of awkward markets, mostly from Eastern Europe, and so may be of use to investors in that region. I’m not a specialist in Eastern Europe and have so far had nothing to do with either firm – more feedback from anyone who has is welcome.

Among others, Finasta can trade stocks in Bosnia, Bulgaria, Croatia, Czech Republic, Estonia,  Georgia, Greece, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Serbia, Slovakia, Slovenia and Ukraine. Orion Securities offers Bulgaria, Croatia, Czech Republic, Greece, Hungary, Poland, Portugal, Romania, Russia, Serbia, Slovakia, South Africa, Turkey and Ukraine.

Lithuania is not a major financial centre – unlike the UK or Luxembourg – so many readers may wonder about investor protection. Both firms are well-known locally, but you should never trust any money to a firm that is not covered by good investor protection rules and ideally some kind of compensation fund. So what kind of rules apply to these two brokers?

Well, this is a regulated market, with stock brokers licensed and overseen by the Securities Commission. Most importantly, Lithuania is a member of the European Union, which means that it has had to implement the same directives on financial services as other EU countries: hence the local Deposit and Investment Insurance Fund will pay the EU minimum compensation of up to €20,000 in the event of a firm failing and your assets being missing.

That meets the minimum standards of security that I look for in a stock broker. That said, I have more doubts about the financial sector of a country such as Lithuania being supported by the state – or the compensation fund being able to pay out in a worst case scenario – than I would with the major financial centres. So I would not choose to use an international stock broker domiciled there as my main investment account, but would consider it an acceptable risk as a way to invest in markets that would otherwise be difficult.

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