I think they all use drivewealth. I think its also the reason a lot of them cant support transferring US shares.
HL for example (and others like Equiniti, Computershare etc.) as i understand it hold foreign shares in a CREST Depository Interest. This as i understand (someone might correct me if im wrong) is what allows for foreign share to be handled in the same way UK shares are, and what facilitates the ability to transfer foreign shares between brokers.
Since drivewealth has no link to CREST, theres no way for you to transfer them or manage them in the same way. its another differentiating factor that new brokers are unable to handle unless the move away from drivewealth
(i could be off base, but thats my current understanding)
yes advantages and disadvantages to both, though I understand at the moment at least you can transfer shares within drivewealth brokers either (not officially at least)
If you have a drivewealth account number, i believe the answer is technically yes. Revolut for example give you the account number, freetrade dont. However im not aware of any UK broker using drivewealth accepting incoming transfers so you would only be able to transfer from drivewealth to a non drivewealth broker like IB or computershare (US, not UK) or a broker supporting the US based shares system with a US account.
Im guessing this is easier int he US because theyâre hooked into the US share systems, not the UK.
The whole reason CDI exists is it gets round this problem of holding and managing US shares in the UK without locking you in to a broker.
(this is just based on the information i know at the moment)
So itâs somewhat possible, depending on who youâre with. Thatâs the takeaway I get from this.
Maybe with time this functionality will expand across more platforms.
I think this way of doing things (connecting directly to US markets) is relatively new and has come to light through the low/no cost brokers.
Hopefully over time more brokers in this category will update thier abilities to allow for inter broker transfer between them.
On other notes Iâve always wondered how CDIs work from the perspective of share price moves and the dfference between the SP in the home market and the UK market.
I own ÂŁBNC, ÂŁPLUS and ÂŁCCH and Iâve always wondered how that works
I get the feeling that if transfers of drivewealth shares are ever supported its more likely to fracture the uk market into two incompatible sets of brokers when it comes to foreign shares.
I think there are potentially some advantages, youâre perhaps dealing a little more directly on the exchange in question, you dont need to deal with market makers. on the downside, freetrade and others do need to deal with a third party since they dont have direct access, so theres still costs involved. and they need to setup in each country (though CDIs arenât available in every country either), and you lose some features of dealing locally.
I get the feeling it could be some time before we see any compatibility between brokers using third parties like drivewealth. No idea for example if freetrades European stocks are transferable, i dont think they are, so thats another system on top of drivewealth potentially that needs to be interoperable with other brokers.
maybe the FCA needs to regulate it at some point
Identical as far as Iâm aware. CDIs are matched 1:1 so 1 apple CDI is 1 apple share. the equivalent foreign share is bought in the market of the country of origin for the shares. so price movements are usually reflected.
I wouldnât regard Interactive Brokers as âmiddle of the roadâ. This US multinational has got $7.1B excess regulatory capital and you can trade in more than 150 markets (e.g. India and Hong Kong). According to
It is the largest electronic brokerage firm in the US by number of daily average revenue trades.
The UK arm provides an ISA. Be aware though for the normal investment account they do share lending however You can sell your shares at any time without restriction and can terminate your participation at any time for any reason. It provides you with interest if it does lend your shares. Pricing
I would on the grounds of fees. Iâm delighted to see they possess a full functionality. On functionality grounds, your right, they are more or less like a full legacy platform.
But if weâre speaking fees Iâd suggest they are in a similar league to Jarvis/X-O.
The issue is more fundamental than age. Traditionally HL was a gold-standard, and Iâm sure in their area of focus they still are. But traditionally the barrier to entry worked in their favour. Once a would-be investor had built up a sizeable enough sum that the fees became tolerable, they would typically pick a broker and if they were happy stick with them until the time came to wind the investment down.
Now you can start investing starting from two or three figures with only FX fees to worry about, and by the time you hit the traditional entry-level amount youâre a relatively experienced investor, what is the incentive to then switch to a fee-based provider? Therefore as people start drawing down their investments, which is a normal part of the cycle (if the average investment is 20-40 years then itâs reasonable to conclude that approximately 5-10% of investors would have started to or completely wound down their investments in the past couple of years), whereâs the replacement pipeline coming from?
To the extent that the challenges are age-specific, itâs the tech-savvy of the current young generation. What Freetrade lacks in terms of detailed analysis, many can do homebrew and feel that this actually does a better job for them than anything on the market because their custom tracker/programming script does precisely what theyâre after.
You make great observations and points (I guess itâs a case of wait and see how long it takes for freetrade to mature) but on this point you made I think youâve drastically overestimated how much time people have.
Itâs all great and fun building chats and spending time analysing stuff if Iâm single in my 20s⊠but would I rather do that or go hiking with family as I get older?
Time is extremely valuable, thatâs why people pay others to do that crap for them
This is the reason I no longer hold individual shares, thereâs an opportunity cost to having to read annual reports etc. Iâd rather pay Baillie Gifford et al to do it for me. And, letâs face it, Tom Slater, Lawrence Burns and the like are better stock pickers than Iâll ever be!
I agree with the general point but not the specific. I think people are becoming more savvy over what it is that theyâre paying for. Do I agree that 80-90% of those who use homebrew trackers and the like in their mid-20s are unlikely to want to do so regularly in their mid-40âs? Sure.
But those who would have done that in the first place, will know what it is they want to get out of what theyâre paying for. They would happily pay for a service that does all that for them and once a month suggests how to invest any contribution theyâre paying into their portfolio and flags any concerning situations. Would they, over-and-above that, then pay for the five minute job of executing?
For some the answer is yes. But my point is that the balance between involvement and cost is no longer a binary one. Which means that the traditional brokers, even if they retain their trading fees, need to ensure their offering is not binary if they are to compete, because if they take the overly-simplistic approach that the fees donât need to change because of the quality of the current offering, revenues will decline. They need to expand their choice of offerings to suppliment it.