sharetrader
Results 1 to 11 of 11

Thread: Nzdx fees

  1. #1
    Member
    Join Date
    Dec 2015
    Posts
    147

    Default Nzdx fees

    The Banks are always bleating to their customers about reducing the global carbon footprint. I get the message on my ASB statements with giant amounts of black ink on a message within the statement that I should stop paper statements and go online all the way and "Save the World".

    Recently I made an order for a small amount of bonds. Guess what, they still seem to be in the dark ages about the purchasing, notifying and the fee charging process.

    I could not place the order through my ASB online trading, I was charged 0.7% of the $ value in fees because I was forced to use a telephone ordering system. I was informed that an email was not possible for the transaction, it was to be sent to me by snail mail.

    Small investors are always encouraged to invest in the financial markets, but we are never given any reasonable incentives to do so I feel.

    So, in this electronic age I will have no idea whether my order was completed until at least 3- 7 days after the event, all this for a premium fee.
    Why are the fees for bonds not set "As a $ amount per Transaction" rather than on the $ amount invested, because after all we are effectively being sold money, and the fee can eat badly into the return on the bond in this low interest rate environment?

    Maybe I will stick to bricks and mortar investments and manage them myself; stopping third party managers gouging my hard earned wealth!

  2. #2
    Member
    Join Date
    Sep 2015
    Posts
    210

    Default

    Maybe try ANZ securities?

    You can place fixed interest orders online and it's 0.5% (minimum $30) for up to $30,000 plus a $5.50 trade fee

  3. #3
    Ignorant. Just ignorant.
    Join Date
    Jan 2005
    Location
    Irresident
    Posts
    779

    Default

    ANZ Securities will process some NZDX securities online, but not all of them. However the transaction does appear in the ANZ Securities system the same day.

    Addendum: I do get an emailed contract note at COB on the dat the trade occurs
    Last edited by GTM 3442; 06-04-2016 at 02:37 PM. Reason: Addendum

  4. #4
    Senior Member Toulouse - Luzern's Avatar
    Join Date
    Feb 2002
    Location
    Wellington, , .
    Posts
    888

    Smile Incentives, High Fees and Complicated Tax Laws

    [QUOTE=permutation;614486]be in the dark ages about the purchasing, notifying and the fee charging process.

    Small investors are always encouraged to invest in the financial markets, but we are never given any reasonable incentives to do so I feel.

    I agree with this.

    Fees ae too high for NZX ASX and DX transactions given the huge technology economies over the last 10 years and much lower overseas transaction costs.

    Another aspect I think stops small investors is the complex IRD tax legislation and calculations re FIF and IR871 NZX and ASX and over complex IRD guides and the huge volume of IRD information and the absence of plain English examples for people filing returns.
    Last edited by Toulouse - Luzern; 06-04-2016 at 03:02 PM. Reason: Format

  5. #5
    Banned
    Join Date
    Jul 2010
    Location
    Auckland
    Posts
    12,878

    Default

    Agree 100% with the sentiment in this thread. Lets take the minimum brokerage on a $15,000 share transaction at ANZ securities as an example seeing as many on here use them. It's $29.90 including stock exchange trade fee.

    So if one is buying $15,000 of a fixed interest security on the DX market and its done online just like a share purchase why on earth should it cost 15,000 x 0.5% + 5.50 trade fee = $80.50 for what is ostensibly exactly the same service processed in exactly the same way. This is blatant oligopolistic pricing by the brokers and adds insult to injury when interest rates on bonds are at record lows. Disc: Don't own any bonds as I strongly dislike being ripped off with grossly excessive brokerage and dividend yield on quality stocks are vastly higher than bonds.

    Buy REIT's instead. GMT and ARG still 5% net and are PIE's so investors on a 33% tax rate are getting an effective gross return of 7.5%...can't see any quality company issuing bonds at 7.5% lately...
    Last edited by Beagle; 23-04-2016 at 05:39 PM.

  6. #6
    Ignorant. Just ignorant.
    Join Date
    Jan 2005
    Location
    Irresident
    Posts
    779

    Default

    Quote Originally Posted by Roger View Post
    Disc: Don't own any bonds as I strongly dislike being ripped off with grossly excessive brokerage and dividend yield on quality stocks are vastly higher than bonds.
    I have some bonds. The strategy is to buy at time of issue and hold to maturity. For diversity.

    The only time I buy on the secondary market is perpetuals, and that is driven by price.

    I understand that TTK used to have a good dividend yield, and it's gotten even better now that the *rse has fallen out of the price.

  7. #7
    Advanced Member BIRMANBOY's Avatar
    Join Date
    May 2011
    Location
    Wellington
    Posts
    1,551

    Default

    Here we go again.....sigh..its all about when you buy more than what you buy. Eyes wide open and 360 degree vision will get you a lot further than tunnel vision. My bonds are ANZ perpetual 7.2%, Works Finance 10.45 %, IFT 7.87%. Air NZ 6.9%, IFT 8.35% I hold all these as well as div. stocks. Funny I don't feel ripped off at all and quite happy with the yields. Now is not a good time to buy unless of course interest rates keep dropping...in which case the current yields may turn out to be quite good in 4 or 5 years. As GTM said they have a role to play in a diversified portfolio.
    Quote Originally Posted by Roger View Post
    Agree 100% with the sentiment in this thread. Lets take the minimum brokerage on a $15,000 share transaction at ANZ securities as an example seeing as many on here use them. It's $29.90 including stock exchange trade fee.

    So if one is buying $15,000 of a fixed interest security on the DX market and its done online just like a share purchase why on earth should it cost 15,000 x 0.5% + 5.50 trade fee = $80.50 for what is ostensibly exactly the same service processed in exactly the same way. This is blatant oligopolistic pricing by the brokers and adds insult to injury when interest rates on bonds are at record lows. Disc: Don't own any bonds as I strongly dislike being ripped off with grossly excessive brokerage and dividend yield on quality stocks are vastly higher than bonds.

    Buy REIT's instead. GMT and ARG still 5% net and are PIE's so investors on a 33% tax rate are getting an effective gross return of 7.5%...can't see any quality company issuing bonds at 7.5% lately...
    www.dividendyield.co.nz
    Conservative Investing and dividend producers...get rich slowly!
    https://www.facebook.com/dividendyieldnz

  8. #8
    Advanced Member BIRMANBOY's Avatar
    Join Date
    May 2011
    Location
    Wellington
    Posts
    1,551

    Default

    Hah.... TTK that would be because David kept having his *rse nibbled at. However David (and what remains of said *rse ) is no longer featuring so will be interesting to see where this travels. SP has been relatively stable for a while so some good news may drive this up fast...he said hopefully. Dividend is good ..long may it prosper.
    Quote Originally Posted by GTM 3442 View Post
    I have some bonds. The strategy is to buy at time of issue and hold to maturity. For diversity.

    The only time I buy on the secondary market is perpetuals, and that is driven by price.

    I understand that TTK used to have a good dividend yield, and it's gotten even better now that the *rse has fallen out of the price.
    www.dividendyield.co.nz
    Conservative Investing and dividend producers...get rich slowly!
    https://www.facebook.com/dividendyieldnz

  9. #9
    Banned
    Join Date
    Jul 2010
    Location
    Auckland
    Posts
    12,878

    Default

    Quote Originally Posted by BIRMANBOY View Post
    Here we go again.....sigh..its all about when you buy more than what you buy. Eyes wide open and 360 degree vision will get you a lot further than tunnel vision. My bonds are ANZ perpetual 7.2%, Works Finance 10.45 %, IFT 7.87%. Air NZ 6.9%, IFT 8.35% I hold all these as well as div. stocks. Funny I don't feel ripped off at all and quite happy with the yields. Now is not a good time to buy unless of course interest rates keep dropping...in which case the current yields may turn out to be quite good in 4 or 5 years. As GTM said they have a role to play in a diversified portfolio.
    SIGH - You might want to check the thread topic its NZDX fees...nothing whatsoever to do with asset allocation strategies. In case you don't know brokers charge circa 0.5% for secondary market sales and purchases of NZDX securities despite it being a fully computerised and listed market whereas share transactions can be had for as low as 0.2%..suppose I should be charitable and suggest you might have overlooked the actual subject matter at 9.14 p.m. at night but while we're on the subject of fees, (not asset allocation), although you have quite rightly mentioned now is not a good time to buy its perhaps worth noting to illustrate the point I was making in my earlier post that if someone bought your AIR bonds off you at the current secondary market 4% yield they'd pay 0.5% brokerage on a bond that has a life to run of only 18 months so their net annual yield would only be 3.67%. As you suggest...not a good time to buy.

  10. #10
    Guru peat's Avatar
    Join Date
    Aug 2004
    Location
    Whanganui, New Zealand.
    Posts
    4,485

    Default

    Quote Originally Posted by GTM 3442 View Post
    I have some bonds. The strategy is to buy at time of issue and hold to maturity. For diversity.

    Yeh we have a lot of clients like this. They rarely sell on market, so never pay any brokerage themselves. It makes sense for sure. But recently some Issuers arent paying commission. To talk my book a little, cost of brokerage over a 5 year bond isnt much per annum compared to the funds that charge you 1% or more per annum to look after your long term bonds.
    For clarity, nothing I say is advice....

  11. #11
    Ignorant. Just ignorant.
    Join Date
    Jan 2005
    Location
    Irresident
    Posts
    779

    Default

    Quote Originally Posted by peat View Post
    Yeh we have a lot of clients like this. They rarely sell on market, so never pay any brokerage themselves. It makes sense for sure. But recently some Issuers arent paying commission. To talk my book a little, cost of brokerage over a 5 year bond isnt much per annum compared to the funds that charge you 1% or more per annum to look after your long term bonds.
    You book sounds an interesting read. I think I might be interested in buying a copy.

    How'd you like to PM me with the details of where I can find it. . .

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •