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Interactive Investor

Interactive Investor bought TD Direct Investing’s UK business in 2017, creating a service that combined TD’s international share dealing platform with II’s fund supermarket.

From an international investing perspective, the good points include decent coverage of North American, European and some Asian markets. The main downside is the commission on currency conversions of up to 1.5%, an often-overlooked charge that will eat into your returns if you trade frequently.

That said, unlike many UK stockbrokers, Interactive Investor offers multi-currency facilities, so clients should try to minimise the FX cost by making currency conversions as infrequently as possible. In addition, the firm will accept deposits in foreign currency, so you could consider using a low-cost foreign exchange transfer firm to pay in funds rather than exchanging currencies within the account.

AJ Bell Youinvest and Hargreaves Lansdown will probably be cheaper for long-term investors in shares, while Interactive Brokers or Saxo Markets offer better value for very active traders. However, Interactive Investor’s flat-fee structure makes it attractive for larger accounts that hold a mix of funds and shares

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AJ Bell Youinvest

AJ Bell Youinvest was a pioneer in low-cost online SIPPs before expanding to offer regular trading accounts and ISAs. The firm offers an extensive range of funds and bonds in addition to UK and international shares.

The online international dealing service covers foreign stocks that can be held through CREST, the UK’s settlement system and securities depository, which essentially means major North American and European stocks. Some non-CREST markets are also available for telephone dealing, including some of the major Asian markets. There is a minimum trade size of £10,000 for Asian markets, but no minimum size for phone orders in other markets.

International trades are done through market makers rather than directly on the overseas exchange – the same method used by Hargreaves Lansdown, which is probably its closest direct peer.

Trading commissions are relatively low, but FX charges are up to 1%. This remains lower than some rivals, but investors who will be trading in and out of foreign-currency positions frequently may prefer brokers that offer the ability to hold foreign currency balances to minimise currency conversions. Like Hargreaves Lansdown, a Youinvest SIPP will automatically receive US dividends with zero withholding tax deducted and Canadian dividends at a reduced tax rate (not all discount brokers are set up to do this).

Overall, Youinvest is one of the better UK brokers for international dealing, especially for long-term investment in foreign shares within an ISA or a small SIPP (with larger SIPPs, it may be worth paying higher fees for a provider that lets you hold foreign currencies). Feedback on customer service is good.

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Charles Schwab Global Account

Charles Schwab’s online global trading service is distinct from the international dealing option in its Schwab One Account and, unlike the latter, is only open to US citizens (US residents who don’t hold US nationality will apparently not be eligible). It offers online trading for 12 markets in Europe and Asia – some publicity material claims access to 30 countries, but this larger number refers to trading in foreign ADRs and OTC stocks, which is not the same as having direct access to an overseas exchange.

Fees are more competitive than the Schwab One telephone dealing offering. However, be aware of the currency conversion commissions (up to 1% over interbank rates) and also the 0.1% extra commission that Schwab’s local broker will add on – detailed rates are in Schwab’s fee guide [PDF]. On the plus side, this account has no minimum balance, other than requiring clients to already have a Schwab One account.

Overall, this is more realistic for smaller investors than anything Schwab offered previously, but it is still more expensive than Interactive Brokers and covers less markets than the similarly priced Fidelity.

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iWeb Share Dealing

The iWeb brand is owned by Halifax Share Dealing, which operates it as an identical service with mostly lower costs.

Trading commissions are £5 rather than £9.50, while a stocks and shares ISA has no annual fee through iWeb. However, there is a one-off charge of £100 to open an account. The 1.5% FX commission for international stocks is higher than the 1.25% for Halifax-branded accounts.

Overall, this means that the service is not especially competitive for larger international deals, but could suit investors looking to make smaller trades in major US and European stocks. For UK-only trading, the £5 per trade commission trade is extremely competitive, but the account-opening fee means that you will need to be relatively active to make the savings worthwhile. If you want a wider range of markets, AJ Bell Youinvest or Hargreaves Lansdown are the obvious firms to consider.

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IW Bank

Part of UBI Banca, one of Italy’s largest banking groups, IWBank is an online brokerage offering online and telephone stock trading in most major European markets and some other global ones. It provides services in several European languages, but seems to be relatively little used by non-Italian clients if the shortage of customer feedback is anything to go by. Commissions seem reasonable for some markets and rather high for others.

Although IW Bank operates separate sites under .co.uk, .fr, .de and other European domains, the firm does not have authorised subsidiaries in these countries and so all accounts fall under the Italian regulatory regime and the investor protection rules there.

This isn’t a problem – Italy is of course a member of the European Economic Area (EEA) and EEA rules are intended to establish minimum standards, enabling financial services to be “passported” across borders. But investors should always be aware when they are dealing with a passported institution, so that they know to which regulator they have recourse in the event that something goes wrong.

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BOCI Securities

The international securities arm of Bank of China seems to be a fairly popular choice for online trading of Hong Kong stocks, but I haven’t had any feedback from users who’ve used the fairly extensive list of foreign markets it claims to deal by telephone.

Its website gives absolutely no indication of commission levels, simply saying “Commission rate will be determined and agreed between customer & BOCI Securities”. Some details of custody and other fees are given, but may be unreliable – the claimed custody fees for Malaysia and Thailand are incomprehensibly high.

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KGI Securities

The Hong Kong division of Taiwanese financial services group KGI offers a handful of markets for online trading, while a substantial number of others are available for trading by telephone.

Rates for most are generally not especially competitive by international standards, especially given the high minimum fees (typically US$150 per trade).

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Standard Chartered Bank Securities Trading

International banking group Standard Chartered has never previously been noted for a strong interest in retail stock trading, but it entered the online trading market in Singapore in mid 2011 with what may prove to be quite a disruptive product. The new service has highly competitive rates compared with other Singapore brokers and – even more significantly – has absolutely no minimum commission on trades, making it very cost effective for smaller investors.

The range of international markets available is somewhat different to most Singapore brokers – instead of focusing on regional markets, concentrates on the major global venues. However, one notable addition is the Osaka Stock Exchange, offered by relatively few discount brokers outside Japan.

There are also no inactivity fees, custodian fees, dividend handling fees and corporate action fees, which are common for foreign stocks in Singapore. On the downside, the currency conversion charges seems to be higher than most other local stock brokers – users report a margin of around 2% on even relatively liquid currencies.

Most Singapore stock brokers welcome clients from almost anywhere in the world, but in this case it’s not clear whether Standard Chartered is willing to accept applications from non-residents. If any readers have received a definitive answer to this, please let me know through the contact form.

The lower rates for Priority Banking customers listed below require an account balance of S$200,000 or housing loans of S$1,000,000.

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Finasta

Temporary note: As of November 2011, Finasta’s parent company Snoras has been nationalised by the Lithuanian authorities amid allegations of fraud and seems likely to be wound up. Finasta says it is operationally and legally separate from Snoras, will continue to operate as usual and is expecting to be sold as a going concern to a new investor. This entry will be updated with more information when the outcome becomes clearer.

Finasta is the investment and brokerage arm of Lithuanian banking group Snoras. Among other services, it offers online stock trading for a large number of markets in Eastern Europe and beyond at relatively low rates in many cases.

We don’t have any experience of using this firm or comments from other feedback yet. It’s included in the directory because it may be of interest to investors looking to invest in this region, alongside firms such as Brokerjet, Orion Securities and Swissquote. If you have any feedback, you can send us an email using the contact form.

In terms of likely investor security, while Lithuania is not a top-tier financial centre, it is a regulated market and Finasta is overseen by Securities Commission. Lithuania is a member of the European Union and has implemented the EU directive on minimum investor compensation standards, which means that the Deposit and Investment Insurance Fund provides protection of up to €20,000.

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Orion Securities

Orion Securities is a reasonably well-known investment bank and stock brokerage in Lithuania. The firm offers online stock trading for the Baltics, plus broker-assisted trading for a large number of other markets – most significantly, it covers much of Eastern Europe and rates on many are reasonably low.

We don’t have any experience of using this firm or comments from other feedback yet. It’s included in the directory because it may be of interest to investors looking to invest in this region, alongside firms such as Brokerjet, Finasta and Swissquote. If you have any feedback, you can send us an email using the contact form.

In terms of likely investor security, while Lithuania is not a top-tier financial centre, it is a regulated market and Orion is overseen by Securities Commission. Lithuania is a member of the European Union and has implemented the EU directive on minimum investor compensation standards, which means that the Deposit and Investment Insurance Fund provides protection of up to €20,000.