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  1. #1
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    Default Ridiculous fees charged by ASB securities

    I'm relatively new to share trading, but i signed up to ASB securities and purchased about 10,500 worth of VTS on the ASX.

    I then log into my account and find I have essentially been charged a margin of 3% for the currency conversion. How ridiculous is that?


    On the rates and fees part of the website it says Aus trades cost 0.3% then down the bottom in small writing it says ASB MAY receive margin income on foreign exchange transactions - but gives no indication of the cost.

    People trade currency all the time and pay like 2 pip or 3 dollarsish on a 10k transaction, no way in hell did i think i would incur a 300 dollar fee. Now this investment will have to outperform an NZ investment by 3% for me to get any worth from it.

    Has anyone had a similar experience to this? How do you avoid these ridiculous fees if you wish to trade on international markets?

  2. #2
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    I have an AUD based FX account with them via ASB securities, only have to initially fund the account then can settle any buy/sell to the AUD account.
    No matter who you are with, if you are transferring from NZ to AUD and back will cost you plenty, you are effectively trading the currency as well as the share to an extent

  3. #3
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    Make sure you don't pay again, probably you will hold the shares you bought for the long term, so in 10 years or more it won't look so bad.
    If you do sell make sure the funds remain in $AU. The advice of KW sounds good to me. It is possible to arrange these things from here in NZ
    , somewhere on the forum this has been discussed before. Don't believe anyone who says it can't, just find someone who knows how.
    It does take a while with form filling in and certification.

  4. #4
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    Quote Originally Posted by KW View Post
    All banks charge ridiculous fees to convert currency. The only way to escape it is to use an Australian broker and open an Australian bank account. Then use OzForex or similar to transfer the funds into that bank account for settlement. Alternatively use a broker that has an FX platform where you can buy that currency first with a forex trade, then use the funds held on account to buy shares on an overseas market (eg. this is how you do it with Interactive Brokers). I keep telling people who wish to trade on the ASX to get on a plane and go to Australia to set up a brokerage and bank account - it would have cost you less for the flight than the $300 you just spent.
    Thanks for the response. Do you know of any brokers with an FX platform that charge reasonable fees? I've spent about half an hour on the phone with ASB securities arguing with them. Will definitely never use their service again. The website is far from transparent, the terms and conditions state you may be charged a margin on foreign currency transactions, but gives no indication of the charge.

    I rung them two weeks ago inquiring about the fees of the currency conversion prior to investing and they said all I had to pay was brokerage. Then when I rung to complain they had the gall to say the margin is not a fee its a "margin". Surely such deceptive practices must be illegal (breach of Fair Trading Act, Negligent misstatement or something). I will definitely be sending in a written complaint

  5. #5
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    Quote Originally Posted by OldRider View Post
    Make sure you don't pay again, probably you will hold the shares you bought for the long term, so in 10 years or more it won't look so bad.
    If you do sell make sure the funds remain in $AU. The advice of KW sounds good to me. It is possible to arrange these things from here in NZ
    , somewhere on the forum this has been discussed before. Don't believe anyone who says it can't, just find someone who knows how.
    It does take a while with form filling in and certification.
    Yeah i do intend to hold these funds for 10 years + so its not the end of the world. Still I'd rather know I was going to be charged 300 odd dollars before entering into the transaction. The lack of transparency and arrogance from the staff I spoke to have definitely left me fuming though. Hopefully others will see this thread and be warned of the cost before entering such transactions.

  6. #6
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    Quote Originally Posted by Jay View Post
    I have an AUD based FX account with them via ASB securities, only have to initially fund the account then can settle any buy/sell to the AUD account.
    Is it the same premise as opening a new fastsaver/on call savings account?

    I've looked at opening one before but was unsure of what hoops I would have to jump through to open it.

  7. #7
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    Quote Originally Posted by Okebw View Post
    Is it the same premise as opening a new fastsaver/on call savings account?

    I've looked at opening one before but was unsure of what hoops I would have to jump through to open it.
    If you already have an ASB Securities cash management account (NZD) then quite easy from memory.
    Yes as KW says you will get stung the margin initially or when you want to tfr back, but generally if you are either holding for a longer period or trading in AUD then not too bad.

  8. #8
    Senior Member Bobcat.'s Avatar
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    If you regularly trade outside of NZ then consider opening up an online multicurrency account with your broker. I left ASB Securities since like you chaps I was paying a lot for forex transactions on each trade both ways (buy then sell).

    ANZ Securities offer OMC accounts for UK, USA, and Australia.

    I made a single forex transaction when setting one up for trading on the asx, and will only need to make another when I withdraw or deposit more funds. Meanwhile I trade to my heart's content on both the asx and nzx without incurring a single forex fee.

    Check it out.

    0800 805777 option 3.


    BC
    Last edited by Bobcat.; 22-07-2014 at 08:16 PM.
    To foretell the future, one must first unlock the secrets of the past.

  9. #9
    Senior Member Bobcat.'s Avatar
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    Yes, I use Interactive Brokers for forex trading and have at times used them for CFDs and stock trading offshore. Their platform has good charting and allows short selling on some. At $6 per trade, it's much cheaper than the $29 per trade charged by ANZ, which if one is trading daily soon adds up.

    I must look to use them again for trading stocks - thank you for the reminder and prompt, KW.
    Last edited by Bobcat.; 22-07-2014 at 09:46 PM.
    To foretell the future, one must first unlock the secrets of the past.

  10. #10
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    If you have an AUD FX account is it possible to have Aussie divies paid in to it or will they still automatically be converted into NZD in the CMA account?

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