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General Category => Shares => Topic started by: Christine Swart on January 11, 2018, 02:55:40 pm

Title: Is Easy Equities safe? Opinions?
Post by: Christine Swart on January 11, 2018, 02:55:40 pm
Hi Patrick, I'm interested in the Easy Equities USD account.  Have you looked at the question of who would have to go bust for me to lose my shares?  Because I understand the shares will actually remain in someone else's name, not mine?  And if so, who is that?  First World Trading, i.e., Easy Equities?  Or a US Bank (maybe Citibank, which would make me feel ok maybe)?  Or someone else?  And is this something I should be worried about?  I've been told that if I use PSG they're a lot more expensive, but the shares end up in my name?       
Title: Re: Is Easy Equities safe? Opinions?
Post by: gcr on January 11, 2018, 06:37:53 pm
Christine - to my knowledge the company in whom you had bought shares would have to go bust before you lose your shares. There are 2 ways of holding your shares (all digital these days) - either in nominees (which I have done all my life) or you have them registered in your own name (most people go this route) your holdings are as such registered in your name in the companies share register. Shares in your own name or nominees can only be sold upon your instruction (over a platform with your broker or by written instruction) so your holdings are relatively safe subject to dishonesty by a hacker or broker - brokers carry insurance for these events
So not sure where you are coming from with your questions but hopefully the above does explain that there are some checks and balances in place to protect your holdings 
Title: Re: Is Easy Equities safe? Opinions?
Post by: on January 11, 2018, 09:05:39 pm
In easy equities the shares are in your name only the fractional shares are not - iirc. So if they go bust you still own the shares.
Title: Re: Is Easy Equities safe? Opinions?
Post by: Samurai on January 12, 2018, 01:08:33 pm
I prefer using EE myself, as far as I am aware should Purple the parent company of easy equities go bust than the shares I bought through them will still be registered in my name and simply transferred to another broker of my choice.

If I may ask why the concern over Purple/EE, Sanlam bought 30% of EE and purple's management did make a statement a year or two ago in which it would take three years and more for the platform to grow and become profitable. With investors like Sanlam I don't see the risk in using EE.
Title: Re: Is Easy Equities safe? Opinions?
Post by: Patrick on January 12, 2018, 01:17:25 pm
Like everyone has said, it's safe as anything else. Gcr made a great point that you should worry more about the company who's shares you're buying, than the company you're buying them with.

I love easy equities, my and my sons TFSA are with them, but I'm not a fan of their USD holdings. They're far too expensive for my liking.

You'd get far better value for money looking into one of the foreign discount brokers. Do some research on Degiro and Interactive Brokers. You'll get far better value for money with them, but the setup process is a little more tedious.
Title: Re: Is Easy Equities safe? Opinions?
Post by: Christine Swart on January 12, 2018, 09:50:18 pm
Thanks everyone, this is reassuring. 

gcr, suppose I buy shares in a Vanguard ETF with EE as my broker.  Then does *Vanguard* know I own the shares?  So does "the shares are registered in my name" mean "Vanguard keeps a register of who has shares in its EFTs and my name is on it (next to certain numbered shares?)"?  Or does Vanguard think the shares are owned by EE, and it's only EE's internal accounting that assigns the shares to me?  Is that what "nominee" means?  Is EE my nominee? 

Patrick, when you say EE is expensive for US EFTs, are you referring to the costs of buying and selling, which seems to be 0.56%?  But the TER is the same as the one published by Vanguard on its fact sheet, right?  Or is that also expensive?  I'm more worried about the recurring costs than the one-off I think.   
Title: Re: Is Easy Equities safe? Opinions?
Post by: gcr on January 13, 2018, 09:01:03 am
Christine - not sure that ETF work the same as ordinary shares - but, with ordinary shares in a nominees name are held in escrow for the beneficiary at the broker level. They would normally provide you with a "transaction listing and a portfolio statement" on a by transaction and a monthly consolidation. To my knowledge brokers are no longer permitted to use nominees or own name shareholdings as collateral for their own dealings. So in a sense you do have protection in that if the brokerage operation failed you could based on statements give a very accurate position of your portfolio. Also all brokers contribute to a fund to guard against rogue operations and broker failures, and the JSE can withdraw broker facilities at any given time if they suspect any malfeasance (just a nice would for being a fraudster - think Bernie Madoff)