Ridiculous fees charged by ASB securities

[zb3]

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?

[Jay]

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

[Okebw]

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.

[Jay]

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.

[Schrodinger]

You will still get hit with the 3% fee in the initial transfer, plus any time you want to get the money out of the account. Also an ASB account doesnt help you when you want to use BPAY to pay for your SPP and rights issues in Australia. An Aussie bank account and broker is definitely the best way to go. Also the Comsec platform has much better features than ASB (which is quite appalling and totally useless) - I think access to the Comsec information, financials, analysis and stock screening tools is worth more than the cost of the flight alone. Well worth doing.

There are $99 one way fares on special at the moment. I usually manage to get a Melb-Chch return flight for $150 during one of the super special offers. Just sign up to the Jetstar and Air NZ emails and wait until a good offer comes along, then pop over for a few days.

OzForex is the best way to transfer funds between international banks, costs nothing if over $10,000 (or just $15 if under) and the forex rate is pretty darn close to wholesale.

Commsec mobile and web based stuff is light years ahead of NZ. I dont know of any NZ based broker that can compare. The mobile app is great because it is so fast to check up on the market.

You need a Commsec account to access this so jump on a plane.

[Lizard]

Forex rates in NZ need some political spotlight... when I first started banking AUD dividend cheques in the late 1990's or early 2000's, it was possible to do so at a spread of 0.8% at the National Bank (although other banks were more expensive). It has gradually crept up and the typical spread is now 3% (according to the averages on interest.co.nz). Given the frequency with which NZer's now purchase directly from overseas, this has to be silently costing NZ a lot of money.

I guess, given his history, John Key must be aware of the problem. But until it gets some real spotlight, there is no reason for banks to change their ways. Deserves a media-fest or some posturing in parliament to get a decent deal for the average NZer on forex imo.

[percy]

Forex rates in NZ need some political spotlight... when I first started banking AUD dividend cheques in the late 1990's or early 2000's, it was possible to do so at a spread of 0.8% at the National Bank (although other banks were more expensive). It has gradually crept up and the typical spread is now 3% (according to the averages on interest.co.nz). Given the frequency with which NZer's now purchase directly from overseas, this has to be silently costing NZ a lot of money.

I guess, given his history, John Key must be aware of the problem. But until it gets some real spotlight, there is no reason for banks to change their ways. Deserves a media-fest or some posturing in parliament to get a decent deal for the average NZer on forex imo.

Maybe John Key helped cause the problem ????!!!!!
Well that's where he made his miillions after all.!!!!!

[stoploss]

Maybe John Key helped cause the problem ????!!!!!
Well that's where he made his miillions after all.!!!!!

Percy I know that is tongue in cheek , he never worked in NZ with a bank that had retail customers/ FX trades, he was good enough not to have to rely on the travellers cheques coming through to turn a profit for the day .....
I doubt the govt would do much Liz this is a pretty competitive industry with many players in it .
If you are looking at doing a currency transfer I have dealt with this company . Rates very close to spot.

http://www.directfx.co.nz/About+Us/Contact+Us.html

Cheers S/L.

[OldRider]

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.

[zb3]

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.