Cost of Doing Business through ANZ Securities is going up !

[Beagle]

Not sure where to post this but seeing as its highly relevant to trading on the NZX through ANZ securities which I know a lot of folks here use I thought I'd post it here.

The trade fee percentage and limits hasn't changed at this point but one of the less visible costs of doing business has.

Astute observers will have noticed that with no chance in the OCR and in a generally rising interest rate environment that ANZ Securities has lowered their call account interest rate from 1.5% to 1.25% for no other reason than to boost their profit.

A little birdie has given me the heads-up that this rate is headed a lot lower still, in line with major trading banks who have scandalously lowered many of their call account interest rates to a low of 0.1% !

Whether one acknowledges it or not their is a growing cost to hold funds in a call account at these super low interest rates and that cost is the opportunity cost of investing it elsewhere at a higher rate, (e.g. Heartland N.Z. 3% on call).

If you're not happy about it send them the message, tell them you're not happy using their contact form and tell them you'll reduce your call account balance if they continue this practice.

Contact details

Email
Help with trading
help@anzsecurities.co.nz
Online Multi-Currency Account
omca@anzsecurities.co.nz
General information and queries
info@anzsecurities.co.nz

If we don't make some noise it will head down to well under 1%, you mark my words !

[kura]

Don't think ASB pays anything on their share trading call accounts.

[bung5]

Yes I was checking interest rates recently and noticed that my online ANZ account now had an interest rate of 0.1% !! I was very quick to transfer any funds to rabobank which offer approx 3000% better return on cash funds :P

[Robomo]

Don't think ASB pays anything on their share trading call accounts.

You're right, they stopped paying interest a couple of years ago on both NZ and OZ call accounts. On the rare occasions my call account is in surplus I have an ASB Savings account I transfer funds into. Doesn't pay much, but 1% is better than nothing! Bit of a pain though having to transfer funds in and out.

Overdraft interest for margin lending with ASB is 6% pa. What is the interest rate with ANZ and other brokers?

[Beagle]

Don't think ASB pays anything on their share trading call accounts.

Correct, nothing on under $250,000
https://www.asb.co.nz/asb-securities/cash-management-account.html

This will happen with ANZ securities if people don't make some noise. Disc: I have previously discussed this issue with a Director of ANZ securities who admitted they made a lot of money from their online call account by pooling money and investing in the money market. Basically they have a HUGE body of empirical evidence of how much of these combined funds they truly have to keep on call and they invest the rest in a series of rolling 90 day deposits and other investments even less liquid, (stated in good faith based on a discussion quite some time ago, current practice may differ from previous practice).
Its all about maximizing their profit. .Something they have a bit of a laugh about from time to time is that most investors don't even understand that having money in their call account is effectively a cost of doing business.

I for one will manage my liquid funds with ANZ far more closely and be opening a Heartland Call account as soon as time allows.
The other opportunity cost to watch though is that if you do leave funds on call with another bank like Heartland with an overnight transfer from another call account, your funds aren't immediately available at all times in your ANZ securities account to take advantage of opportunities as they arise with the lowest brokerage.
Sometimes though this can work for you as today's good value becomes tomorrow's bargain. It can also give you a chance to avoid an impulse purchase...its must be good value because its dropped XYZ cents. Swings and roundabouts I suppose...

What I intend to do about it.
1. Let ANZ securities know I have noticed and am not happy and will be changing the way I run my account as a result.
2. Open a Heartland Call Account and be more disciplined about what I leave in my ANZ securities account.
3. Set a daily limit on what I'm prepared to invest in any one trading day and ensure that's the maximum I keep in the ANZ securities account.

I think the above is good discipline as sometimes having access to all one's call account funds for immediate investment at any point in time is not necessarily a good thing.

[couta1]

As we discussed the other day Roger, it can indeed be swings and roundabouts eg I transferred a large sum to my Heartland call account from my ANZ securities account on Monday this week and another large sum over early Tuesday. Headed off for a rare days fishing to spot X which has no mobile coverage. On the way back in, once coverage was available I noticed the Spark share price had dropped by 10c for no logical reason. I frantically bought as many as I could with what I had left in my account plus sold a couple of other stocks to boost funds. The share price went up 10c the next day, and it would take at least a years worth of interest on the Heartland account to equal the lost opportunity by not having my funds available. ANZ are cutting their nose off to spite their face IMO, they lost a large sum of potential brokerage because of my funds not being available due to their dropping interest rates. I only stated using the Heartland account when I noticed they had dropped their rate yet again, surely they would be better off paying a higher interest rate and gaining a lot more in brokerage fees?

[McGinty]

Thanks for the heads up on ANZ Securities Roger.

I too noticed that the interest rate on the OMCA dropped 0.25% recently and didn't understand why (or that we weren't even notified).

I was looking to double my funds in OMCA account as I will have property sale proceeds arriving next month, but will now look elsewhere for a more rewarding rate (maybe NZC at 3%) or Heartland as you mentioned.

[BIRMANBOY]

Remember that your brokerage fees drop dramatically if you use the MC a/c to pay for and receive funds from share purchases. If its a substantial size purchase could save well over a hundred dollars in brokerage.

[Toulouse - Luzern]

Hi Birman Boy ...
What is a MC a/c

[couta1]

Hi Birman Boy ...
What is a MC a/c Same as OMCA or Online Multi Currency Account.

[Beagle]

As we discussed the other day Roger, it can indeed be swings and roundabouts eg I transferred a large sum to my Heartland call account from my ANZ securities account on Monday this week and another large sum over early Tuesday. Headed off for a rare days fishing to spot X which has no mobile coverage. On the way back in, once coverage was available I noticed the Spark share price had dropped by 10c for no logical reason. I frantically bought as many as I could with what I had left in my account plus sold a couple of other stocks to boost funds. The share price went up 10c the next day, and it would take at least a years worth of interest on the Heartland account to equal the lost opportunity by not having my funds available. ANZ are cutting their nose off to spite their face IMO, they lost a large sum of potential brokerage because of my funds not being available due to their dropping interest rates. I only stated using the Heartland account when I noticed they had dropped their rate yet again, surely they would be better off paying a higher interest rate and gaining a lot more in brokerage fees?

Yes mate you deserve the credit for pointing out this change to me (the rest is based on a discussion I had with one of the directors quite some time back).
If they follow suit eventually to what ASB securities have done and don't pay any interest this will indeed cost them money, both in funds under management and lower trade level's.
If Spark had dropped another 10 cents the following day you would have been happy though :)
As we discussed the other day mate, May - July inclusive aren't generally considered the best of months to be fully invested in the market, (The famous sell in May and go away based on the northern hemisphere summer and anecdotal evidence of market underperformance in those months has some credibility to it in my opinion) and I'm about 40% in cash at the moment anyway and will probably stay around there for the next few months and those significant funds certainly won't be staying in my ANZ securities account at that pitiful rate that's for sure !

[Leftfield]

No interest on ANZ 'on call' account doesn't worry me.

I keep my 'cash' funds with TSB (earning interest) and simply transfer from savings account to payment account and on through to ANZ on settlement day.

[Snoopy]

Astute observers will have noticed that with no chance in the OCR and in a generally rising interest rate environment that ANZ Securities has lowered their call account interest rate from 1.5% to 1.25% for no other reason than to boost their profit.


There is a solution to this problem which causes far less aggro and angst. Make the transition from 'poacher' to 'gamekeeper' and simply buy some ANZ shares!

SNOOPY

[777]

No interest on ANZ 'on call' account doesn't worry me.

I keep my 'cash' funds with TSB (earning interest) and simply transfer from savings account to payment account and on through to ANZ on settlement day.

But what rate of brokerage are you paying?

Copied from their site.

OMCA Internet Rates
Brokerage
OMCA internet rates are only available to Online Multi-Currency Account holders with sufficient cleared funds available to fully cover the purchase of securities prior to submission of the order.
For trades for New Zealand listed securities (other than debt securities) with a trade value of up to NZ$15,000 NZ$29.90
For trades for New Zealand listed securities (other than debt securities) with a trade value exceeding NZ$15,000:
(i) for the first NZ$15,000; plus NZ$29.90
(ii) for the portion of the trade value exceeding NZ$15,000 0.20%
Trades for Australian listed securities with a trade value of up to AU$30,000 AU$29.00
For trades for Australian listed securities with a trade value exceeding AU$30,000:
(i) for the first AU$30,000; plus AU$29.00
(ii) for the portion of the trade value exceeding AU$30,000 0.30%

Standard Internet Rates
Brokerage
Trades for New Zealand listed securities (other than debt securities) NZ$29.90 plus 0.40%
Trades for Australian listed securities 0.70% or AU$40.00
(whichever is greater)

[Beagle]

There is a solution to this problem which causes far less aggro and angst. Make the transition from 'poacher' to 'gamekeeper' and simply buy some ANZ shares!

SNOOPY

LOL This hound hates paying tax twice, (hence his love of full imputation credits). The correct solution is in post #5 above, (what I intend to do about it) thereby supporting one's own higher growth Heartland N.Z. Bank at the same time :) This solution involves a more disciplined approach to setting a daily maximum trade limit. The extra discipline won't do me any harm but might hurt ANZ securities brokerage !

[Zaphod]

But what rate of brokerage are you paying?

Transfers from my bank to the ANZ OMCA show up within an hour or two, so having the funds vested in a higher interest bearing account outside of the ANZ sphere is certainly possible now without incurring the higher brokerage rates for same day purchases.

[thestg]

Transfers from my bank to the ANZ OMCA show up within an hour or two, so having the funds vested in a higher interest bearing account outside of the ANZ sphere is certainly possible now without incurring the higher brokerage rates for same day purchases.

What bank are you with? I'm with BNZ & transfers to my OMCA NEVER got through in the same day.

[Food4Thought]

Exited ASB also. Not impressed with what banks are up to dropping interest.

Heartland and Rabo it is.

[bull....]

anz playing catchup with asb in a rising interest rate environment lol

[Beagle]

I am happy with my portfolio and cash allocation at present so I now have a "whopping" $100 in my ANZ securities cash management account. This costs them funds under management and brokerage as far as I am concerned.

[BlackPeter]

Looks like we still don't pay enough into ANZ Securities: Their webpage is down (and this already for some hours). No notification on the ANZ webpage either. Let's hope they wake up before the weekend ends ...

[Leftfield]

Looks like we still don't pay enough into ANZ Securities: Their webpage is down (and this already for some hours). No notification on the ANZ webpage either. Let's hope they wake up before the weekend ends ...

No worries - During the week they advised the site would be down today..... upgrading or whatever.