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$0 Brokerage Fee with 0.5% FX on US Trading @ Superhero

1172

They just released international trading. a a a a a a

https://www.smh.com.au/business/companies/superhero-launches...

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  • +3

    Am I right in understanding that you can fund using PayID in AUD and then transfer to USD in the wallet and funds will be available instantly to trade?

    • +2

      yes

      • Thanks :)

        • +10

          cheaper fees and instant funding , seems like miles better than selfwealth

          • -1

            @phunkydude: I stopped selfweath years ago when i realized i could not trade us securities.

          • +10

            @phunkydude: As far as I am aware, Superhero is not CHESS sponsored - this may be important for some people

            • +2

              @Somnus: This is the thing that makes me cautious about Superhero, although even Vanguard's own Personal Investor (limited to their ETFs) is not CHESS sponsored, but I guess they seem reliable because of the brand. Tough call to switch from SW to Superhero. Any pro's with experience care to share some info. Ta.

            • +5

              @Somnus: CHESS only relates to Aus traded securities though.

      • Just to clarify, the AUD to USD conversion is instant just like Stake?

        SW is a next day conversion unless you hit transfer very early in the morning which is annoying.

    • Apart from the fund transfer delay, isn't stake better? They're also coming to join ASX trading in future.

      • They would both be using US custodians, so I think it all comes down which process/app you prefer (and how trustworthy the custodian is).

      • +6

        Superhero will charge a foreign exchange fee of 0.5 per cent on transfers into US dollars before client purchases of US shares. This is cheaper than the 0.7 per cent charged by Stake.

        • Wow. This app is really going to challenge stake.
          Do they have instant acces to money after selling or you have to wait t+2?

        • +33

          Stake's fee isn't 0.7 percent, even though they intentionally use terms to make you think so. It's exactly 0.7 USD per 100 AUD, which, with the current exchange rate, is equivalent to 0.93 percent.

          • +4

            @pn: But there's a workaround with Stake where you transfer AUD to USD in your Transferwise and then from there to your Stake account (using the US bank acct number, which is available for every Stake account by default) like a local USD to USD transfer without any fees. So, essentially you pay Transferwise (or Revolut or any other service that you choose to use) FX rates only and your transaction has nothing to do with Stake rates. I guess there's some tiny fixed amount fee charged by Stake for direct deposit of fund into Stake account using this method.

            I am not sure if this method is available with Superhero too.

            • +5

              @virhlpool: You're right. You can get around the fee when getting the money IN Stake, but no way on the way OUT. Note that for normal people who bite the fee both ways, they lose more than 1.8% of their fund. I like Stake's features, but be aware of its high fee. It isn't cheap as they make it appear to be.

              In another note, lately Stake has removed the direct USD transfer method in the app. I believe you can still do it via contacting support now, but it's probably gone for real at some point. This move can turn off quite some of their customers I guess.

              • +1

                @pn: It's not removed you can still do it they're just not advertising it on their page. Contact the helpdesk if you want the US account details.

            • +3

              @virhlpool: This was the method I was using but unfortunately Transferwise is now blocking transfers to DriveWealth (Stake's US broker). I contacted Stake about this and they confirmed this is the case. Looking at alternatives such as OFX to achieve the same outcome now.

              • @tabboy: Why is that though? Revolut should work too.

                • @virhlpool: I stopped using Stake since they stopped doing US transfers the FX rates are an absolute rip off

                  • +3

                    @Briefcase Mong: I can confirm both Revolut, IBRK, and OFX transfers work for me.

                  • @Briefcase Mong: Who are you using now for US brokerage? I hear the Charles Schwab International account is good. https://international.schwab.com/pricing

                    • +1

                      @tabboy: I use Charles Schwab. Interface is good, works well, can deposit in AUD or USD, i did my initial deposits with Revolut for free.

                      Automatic dividend reinvestments is a great feature not on superhero/Stake. Only thing im missing is Fractional shares, which isnt available on the international account yet.

                • @virhlpool: Stake would not disclose to me why Transferwise payments are being blocked.

          • @pn: Bye bye Stake!

          • @pn: Thanks for posting this. I was unaware how much of a rip off Stake is

        • +4

          Stake optionally charges this amount 70bps if you deposit AUD in your US Account, totally irrelevant if you deposit USD (use TFW if you want a better rate etc.) … and yes it's a lot.

          Superhero will charge you 50bps every time you buy or sell any US asset, which means if you buy one share, then sell it, you've already been subject to the 50bps twice, and you've paid 1% of the volume in fees, which is higher than Stakes 0.7%

          The advantage is that you can add / remove liquidity from the platform without paying FX though.

          All in all, if you're buying and selling long term, this can be cheaper than Stake, but then why do you care about $0 brokerage in the first place.

          So far I've paid zero FX fees on Stake, and I expect to pay their $200 USD fee to move my entire account (via ACATS) at sometime in the future, which is significantly less than 0.7% of my portfolio.

          EDIT: yes I know it's more like 0.93% given their scummy reference to FX (forward?) points and being very unclear overall, but the above sentiment is about avoiding the fee entirely on the way IN and OUT.

          • +1

            @Shwayne: If you kept your funds as USD after selling a stock, you wouldn't be charged that 50bps fee though. I am under the belief that the fee is only charged during deposit and withdrawl between AUD and USD.

          • @Shwayne: The 50bps (usd) is only charged when funds are transferred in/out USD between the AUD account. So part of your info is incorrect. So keep your sold US stocks in the USD account to avoid fees. So essentially Stake doesnt have much advantage over superhero apart from min trade of $10 (but even so Sharesies have min 1c trades).

  • Just wondering if the after-Hours trading available for us markets? and is it live data or delayed? Thank you!

    • Live data mentioned in the FAQs

    • +3

      Had a chat with them and no after-hours trading…:(

  • +15

    Highly recommend you do your research with groups like Superhero.

    I don't know much about them, will read into it, however I find a lot of these online trading companies use a 'custodian' structure whereby the investments are held under the company but you're the beneficial owner. The broker is hence allowed to lend/market make/do weird wacky things and make money off YOUR holdings to cover the brokerage. When things go wrong, and believe me they do, it falls apart and recovering assets becomes a nightmare. The old school broking account is the safest way to hold shares, but again, DYOR.

    • +24

      which US trading are CHESS sponsored ?

      • I don't know, don't hold any direct US shares, I find the admin is a nightmare, so I just buy ETF's instead.

        Again, just suggesting a bit of research, not dissing the product at all.

        • +11

          I just buy ETF's instead

          Held by a custodian. You don't think you hold all those little fractions of a share do you?

        • +9

          CHESS is an Australian ASX thing so it doesn't apply to US shares.

      • +24

        None, there's no such concept in the US

    • +8

      Not relevant for US stocks

    • +1

      Thanks. I'm wondering if it would be worthwhile to buy shares through such brokers, then transfer them to an old school broking account (such as SelfWealth) thereby avoiding the brokerage.

      I would guess that there would be some transfer fees however, if they are lesser than the total brokerage for acquiring the securities, it could be a way to make some savings.

      • +1

        No transfer fees for moving AU stocks, just will take time

        • +1

          AFAIK , AU holdings are under custody of superhero's single HIN , where individual users don't get their own HIN

          not sure how transfer to HIN of different ownership names …. gonna work

          • +1

            @phunkydude: It does, I've never tried but people manage to shift them to their own HIN all the time on reddit

      • +8

        selfwealth US holdings are held under custodian of Philips Securities from Singapore

    • Does this ring true for, say, Stake, in your opinion?

    • +3

      "So, in some recent cases, it may be somewhere like 80 to 90 cents in the dollar — you may be lucky and get more, but you could also be unlucky and get a lot less."

      If you want to invest in US shares, for example, most Australian brokers do it through a custodian, even the biggest players like CommSec.

    • +1

      Custodians are quite a normal practice in the US. That is not to say there can't be dodgy custodians out there. So yeah, do your due dilligence! (if you don't know what a custodian is, start there!)

    • Not sure about their / your US stocks holding but for their/yours AU stock holding - it is very safe, as safe as you would with any dealer as these 'properties" are with a 'Trust" not with Superhero - which, I guess, is most likey a 'Funds manager" who by 'ASIC Client Money" rules is very well regulated and restricted in how they can use your money , in this case, your shares.

      Q: How are my shares held by Superhero?
      Under our Terms and Conditions your shares are held in custody by Superhero Nominees Pty Ltd (Superhero Nominees) on your behalf.

      Superhero Nominees’ purpose is to act as custodian for customers pursuant to our Terms and Conditions and it does not acquire a beneficial or proprietary interest in your investments, or the income and rights attached to your investments.

      For clarity, beneficial ownership means that you, the owner of the shares, get the direct benefit from the shares.

      The shares purchased within your Superhero account are yours and cannot be accessed by others, including claims from any creditors of Superhero.

    • +1

      Their US clearing firm (also where your shares are held) Apex Clearing Corporation seems sus. They are sued in a class action for their role restricting trading on meme stocks like Gamestop in January this year. They restricted buying for affiliated brokers' retail customers.

      https://securities.stanford.edu/filings-documents/1077/ACC00...

      • +1

        I didn't do any resarch on whether other firms got sued, but in that epic event (the GameStop one) , all brokerage firms did more or less the same restrictions. Stake even removed the credit card funding channle to many trader's dismay… and not reinstated till today.

        • +1

          Yeah a lot of other brokers did too, but apparently US ones like Vanguard and Fidelity did not. imo the key issue is, as you can see under section 12 of the lawsuit, Apex restricted trading because of NSCC's requirement to post more collateral. Why didn't they just post the collateral like the brokers that didn't restrict trading did? imo it's likely because of their dodgy business model, they simply didn't have enough collateral, implying a higher risk of them going down vs some other brokers who have better balance sheets/more assets.

          Apex just reminds me of the notoriously shady Robinhood https://www.forbes.com/sites/jonathanponciano/2021/06/30/rob....

          • @staiga:

            imo it's likely because of their dodgy business model, they simply didn't have enough collateral, implying a higher risk of them going down vs some other brokers who have better balance sheets/more assets.

            This is pretty much what I'd concluded at the time as well.

            • @idonotknowwhy: Alternatively they were responsible and restricted trading? Just because a problem occured doesn't mean the broker was irresponsible. Judge based on how they resolved the issue. I haven't looked into the case, did court find apex at fault?

              The situation isn't as simple as the the meme stock pumpers on reddit would have you believe, trading restrictions were lifted when collateral / loans were arranged. That took time.

              • @Shacktool:

                they were responsible and restricted trading

                For what reason should they restrict trading?

                The situation isn't as simple as the the meme stock pumpers on reddit would have you believe

                Well aware of that. That social media crowd were all saying it was a conspiracy with hedge fund managers stopping the short squeeze, etc

                Anyway, shortly after all that lot restricted buying, Selfwealth tweeted that you guy buy GME with them when the market opened lol

                • +1

                  @idonotknowwhy: They did not have enough collateral?
                  If they are buying millions of dollars of meme stocks on behalf of their clients, they need to ensure they can pay the seller of those stocks, while awaiting to receive money from their client. Otherwise if they buy millions of dollars in stock, and their client doesn't pay, they still have to complete the transaction and pay the seller - they would have no cash to do this. They would go broke. Hence they need a certain % collateral, governed by FTC regulations. Normally this is offset by incoming cash from their clients sales.

                  You realise a broker makes money on trades, stopping trade costs them profits?

                  Just because uneducated reddit posts claim market manipulation, doesn't make it true

          • -1

            @staiga: Glad they’re being sued as their restrictions were a huge manipulation of the market. Hope the plaintiffs win this and other class actions!

      • Thanks for letting us know!

    • Of course they use a custodian, they are not members of DTCC, the value of retail shareholders holdings isn't large enough to justify holding the shares in the beneficial owners name directly, although some wholesale/institution clients will execute through whomever locally and settle/custody externally in their own name. If you really want that you can open an account with a US broker. From my 15+ years insider experience small aussie based brokers dont do weird things such as lending stock out, usually their books (the value of stock they hold for clients) is not that big definately not big enough to run with the big boys doing this sort of thing. The brokerage you claim they are covering is actually very small, for US stock the wholesale rate your Aussie broker is paying can be 2 bps, for a USD 10,000 trade they might pay the executing (wholesale) broker USD. The low cost brokers tend to make most of their money from FX spread and charge bugger all brokerage, the Full Service brokers make 80-90 percent from brokerage hence they have minimums of USD 150-200, the FX spread they charge is much smaller.

      • If you really want that you can open an account with a US broker.

        Charles Schwab ? or another ?

    • +2

      Selfwealth confirmed to me that your US Securities go into a pool and that while you have beneficial ownership, it just means you own none of the pool. If you sell #, they can sell from the pool. Aka, like a ponzi scheme. They can loan out the pool's shares up to 100% based on their risk appetite.

      Selfwealth via Philips Custodian also explicitly forbid you from confirming your shares via requesting paper as well. Plus, you're also not allowed to vote but Philips Custodian can! They are allowed to sabotage your own investment via not voting, voting against your interests, etc.

      US retail investors have it bad, especially overseas ones.

      Edit: If Philips know that a company is going bankrupt and shares are going to become worthless, they have a large incentive to sell/loan almost all pool shares to claim the current value. Aka going short.

      • Did Selfwealth also confirm that Philips do share lending?
        What other brokers you recommend that are easy to use here in Australia?

        • SW to that: "PhillipCapital do not lend out shares. It's a cash account."

          From what I've seen, all Australian brokers deal through custodians who have their pools.

    • +1

      Highly recommend you do your research

      Doesn't know how US brokerages work

  • $0 brokerage on ETF ,very nice.

    Do they support Chess sponsored holdings?

    • +1

      It will cost you $5 to sell your EFT shares though but most people will buy EFTs with a view to the long term so this will not be an issue for most.
      I cannot answer your question about CHESS sponsored holdings though. To be honest not sure what you mean. IE are you talking about TRANSFERRING or whether your purchases on Superhero are CHESS sponsored. If the latter then the answer is No.

    • only Australian stock is held in CHESS (Chess is due for replacement soon anyway there is a new system coming) US stock is held in DTC, can be held in your own name or in the brokers name depends on how much stock you have, who your broker is, for retail clients most likely to be in the brokers name. Usually the Broker doesn't hold it in their own name, they will have a secondary entity hold it, the secondary entities reason to exist is to hold clients stock, and hold it away from the broker so there is no co mingling.

    • No.

      "Under our Terms and Conditions your shares are held in custody by Superhero Nominees Pty Ltd (Superhero Nominees) on your behalf."

      From https://www.superhero.com.au/support/
      Click on "Aussie Legal Stuff"

      How risky this is, I can't say. eToro has insurance of up to $1 million per client, although there is an aggregate limit that's not disclosed:
      https://www.etoro.com/investing/insurance/

  • +1

    As you are buying US Stocks when it comes to a tax return is the process similar to Aus Stocks ?

    • +1

      Dividends you receive will be subject to withholding tax in the US and you may need to do a US tax return in order to claim these amounts back. But otherwise, basically the same - buy price is what you pay in AUD, sell price is what you get back in AUD, and 30% CGT on the difference (assuming you make a profit).

      Talk to your accountant though!

      • +1

        If your broker can accept US tax forms upfront, then they will claim tax treaty benefits for you hence when any dividends are paid 15% will be withheld. If they cant they will charge you the full 30% and then will issue you a 1042S at the end of each US financial year and you can submit a claim with the IRS to get half the tax back should the person/entity holding the stock be an Australian Entity/Resident for tax purposes.

        • +1

          In short make sure your'e filling out W8-Ben at some part of the process or you'll have a painful time reclaiming your tax withholding.

          • @Shwayne: my understanding is with Stake, the W8-Ben is prefilled for you and you pay a one off fee for it.
            Does Superhero do the same? If not, then this could be a disadvantage.

            • @IsTops: Well it's not a one-off fee if it is every 4 years.

              • @watwatwat: ok, wasn't aware it needs to be unfilled once every 4yrs.

  • Does anyone know the process to transfer US shares (looked after by Morgan Stanley) to places like Superhero?

    • +1

      Best to talk with superhero. They will show you their process.

    • +1

      You can contact MS and instruct them to deliver the stock to SH, or you can contact SH and ask them to retrieve them from MS. Its better to have MS push them out, its the cleaner way.

    • +1

      Ask Superhero to provide the paperwork to receive a ACATS portfolio tranfsfer, then they'll let you know what you need to tell the other broker to transfer everything over.

      This usually involves a fee on the outgoing party, you might want to check their fees schedule or ask them first.

  • +1

    FYI this has a minimum of $100 per trade on all US Equities/ETFs

    • +3

      Same rule of AU$100 for ASX shares.

  • Do you have to have sufficient funds in your superhero wallet during execution of the trade or do you just transfer the funds prior to settlement and just leave $100 in the wallet to meet the minimium balance?

    • You need to have 100% of the funds available. They do not provide 'credit' for your share purchases.

  • +1

    Does superhero allow lending?
    FYI commsec > pershings fees are more (0.6% FX and 0.31%ish in brokerage)

    • No. You can only trade with the money that you put in. If you need to borrow money to make trades then you will need to source it from somewhere else to actually use another provider that has this capability.

      • sorry, i meant share lending. will superhero lend my shares?

        • Ahhh sorry, not sure what that means.

        • Traders should always assume that the custodian will lend the stonks to hedge funds so that they can short them.

          • @rektrading: Read the brokers FSG, T&C's they will should spell it out, if not ask. I have worked at the second biggest retail broker on the non Aussie equities side and they didn't lend stock out…

  • +1

    is there a max amount per trade?

    e.g. SelfWealth it's $9.90 with no limit per trade whether I buy $10k or $100k of stocks still $9.90 per trade.

    • -2

      The max amount is what you have in your account. If purchasing EFT's the cost if $0, other stocks are $5 flat fee on buys and sells.

      Funnily enough though I went to see if I could purchase some Apple shares (US) and the fee was $0 as well. Not sure if that was deliberate or not. Maybe the 0.5% FX fees was enough for Superhero.

    • Guys, my above statement was negged for some reason. Can someone please let me know if I said something incorrect as I don't want to make the same mistake twice and pass out incorrect advice.

      This was the comment:
      "The max amount is what you have in your account. If purchasing EFT's the cost if $0, other stocks are $5 flat fee on buys and sells.
      Funnily enough though I went to see if I could purchase some Apple shares (US) and the fee was $0 as well. Not sure if that was deliberate or not. Maybe the 0.5% FX fees was enough for Superhero."

      • You didn’t answer the question but instead gave an irrelevant answer.

        The correct answer is no limit to the size of the trade as long as you are funded.

        • Ahhhh, sorry I just got what the main question was about. It was about the BROKERAGE costs per trade. I thought it was about how much you could purchase in shares.

  • Thanks for sharing, OP.

  • +2

    For what it's worth I've been using these guys pretty much since their launch.

    My only concern is the sometimes delay in funding, even via PayID. It's sometimes there is 2 minutes and other times 2 hours…

    Have had to use their support via chat a couple of times which they were responsive and helpful.

    They do run a custodian model so realistically you do not own the shares directly. That said, most are doing it this way now.

    Just my two cents worth in case anyone gave a crap lol.

    • +3

      My PayId transfer experiences are < 5 seconds. IE. I click send cash, a second later my phone gets the SMS saying it was successful, I refresh my Superhero account and I see the cash there.

      This was via NAB and Macquarie.

      • +1

        Same with me (ie instant).

  • How does it compare to eToro? Or is it not apple with apple comparison?

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