Saturday, April 2, 2011

Finding a good Spanish brokerage

Coming from the land of $7 stock trades, it’s been quite a shock for me to see the fee sheets of most brokerage accounts here in Spain. Since for US tax reasons it’s extremely unadvisable for US residents/citizens to buy foreign mutual funds, the only real alternative for foreign equity is to directly buy foreign stock.

So I asked my friendly bank manager about opening a brokerage account. Things looked ok until I looked at the fee sheet. For buy stock on a European exchange, you pay:

  • Transaction value fee: 10 euros + 0.16% with a maximum of 30 euros
  • Transfer fee: 0.5% on purchases, 0.3% on sales (minimum of 12 euros)
  • Mail fee: 0.32 euros
  • Broker fee: 0.1% (minimum of 17 euros)
  • Exchange fee: 15 euros
  • Custodial fee: 3 times a year you pay 0.35% of the value of all the stock you own.

So say I buy 100 shares of Danone for 4644 euros. That would be:

17.43 + 23.22 + 0.32 + 17 + 15 = 72.97 euros commission! (plus the same again to sell)

Jesus fucking Christ on a camel…

So basically you’d lose 3% + 1% per year of your money just in transactions fees.

It appears there are some good alternatives. I am currently looking at, which is a joint venture between La Caixa and Societe Generale. Still not as good as E-trade, but an improvement.

If anyone has any other suggestions or experiences with the Self Bank brokerage, I’d be happy to hear them.

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