Grow SMSF has put together a special offering: Grow US. We think Stake is the best way to trade US stocks from Australia and answers the question of how to buy US stocks in Australia with your superannuation.
Stake is widely believed to be the best way to trade US stocks from Australia.
I opened a Stake account personally back in 2018 and got to know their team after writing a Stake review. My motivation was to diversify my SMSF portfolio by investing directly into companies that were part of the tech heavy NASDAQ.
I found Stake Australia easy to use and superior in both cost and functionality versus Commsec international trading.
The Stake fees are very competitive: 0.70% to transfer money from the Australian dollar Macquarie Cash Management Account to Stakes US broker account DriveWealth. Although some people are quick to point out that other solutions such as Commsec International Trading, ANZ Share Investing, NAB Trade and Westpac Online Investing offer cheaper AUD / USD forex spreads – around 0.60% their brokerage fees for buying US stocks such as Amazon, Tesla, Apple, Facebook, Alphabet (Google), Netflix and even Berkshire Hathaway were a lot higher compared to Stake which has $0 commission free brokerage similar to US based Robinhood.
|Trade Size $USD||Stake||CommSec International||ANZ Share Inv.||NAB Trade||Westpac Online|
The above table does not include foreign exchange fees (FX spread) which are: Commsec – 0.60%, ANZ – 0.60%, NAB – between 0.50% & 0.80%, Westpac – 0.60%.
The above is not a comprehensive comparison of all brokers who enable the trading of US stocks from Australia.
Stake has partnered with US broker DriveWealth to provide Australian investors access to US stock exchanges.
DriveWealth provides the US brokerage and execution services to Stake and its customers. It is connected to the relevant exchanges to ensure that orders are executed in accordance with the client’s instructions. DriveWealth, LLC is a US broker-dealer registered with FINRA (US regulator) and is a member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). You can read more about SIPC at www.sipc.org.
Unlike Australia, the CHESS sponsorship does not exist in the US. Any US stocks and ETFs purchased via DriveWealth are held under a custody arrangement on your behalf. As per the account statements provided by Stake, custodial services provided Citibank, N.A and Velox Clearing LLC. For comparison, any US stocks purchased via Westpac Online Investing or Commsec International are held by Pershings as the custodian under a similar arrangement.
With Stake your SMSF is always the beneficial owner with a legal entitlement to the shares. This is similar to Australian to investment ‘wrap’ accounts like BT, Netwealth, HUB24. They own all the assets in their name on your behalf, but you / your SMSF are/is the entitled owner. The custodian arrangement is the default in the US and enables fractional shares which is useful.
Importantly the assets they hold as custodian are not theirs – and they’re not intermingled with the banks own assets so even if Citibank or DriveWealth or Stake or anyone goes out of business, you still have legal entitlement to the assets.
It’s the opinion of the Grow SMSF team that Stake is the best way to trade US stocks from Australia.
The second key component of the Grow SMSF Stake solution is the Transaction Account. Stake uses the Macquarie Cash Management Account (CMA) as the linked Australian dollar bank account for your SMSF.
The Macquarie CMA acts as the central HUB for the self-managed super fund receiving all income, paying all expenses and being the source of monies for all investments. To buy US stocks and ETFs in the name of your SMSF using Stake money first needs to be deposited into the Macquarie CMA. From there, via the Stake app or website, you initiate a transfer from Australian to US dollars.
You have a number of options to transfer Australian dollars to US dollars with Stake:
The regular bank transfer option is by far the cheapest option. Stake also offers an express funding option at a premium (0.50% extra). Refer to the Stake pricing page for the detailed fees on FX transfers. It’s important to note the regular bank transfer option is currently only available via the web browser desktop interface – it’s not availble via the Stake mobile apps.
If you have an existing SMSF that already has a Macquarie CMA, you can link the existing CMA to Stake as part of your new account set up. More information on how to do this is included in the following Stake support article: Link existing Macquarie account.
Grow SMSF does not mandate which bank account you use for your SMSF transaction account, however as part of the creation of a new Stake SMSF account, you will be provided with a Macquarie CMA.
To be eligible for the Stake Base and Flexi fixed fee packages, you are required to use an SMSF transaction account that provides an automated feed into our SMSF accounting platform. The Macquarie CMA fulfills this criteria.
For a list of all bank accounts that fulfill this criteria, please contact us.
The following are examples of the type of deposits that might be received into an SMSF transaction account:
The following are examples of the type of withdrawals that might be paid from an SMSF transaction account:
Turns out share traders are notoriously harsh markers when it comes to online reviews of trading platforms.
Stake reviews at 3.2/5 on ProductReview.com.au – so how does this compare to others? Let’s take a look:
Commsec International Trading – 1.9/5, ANZ Share Investing – 1.1/5, NAB Trade – 1.5/5, IG – 1.2/5
Grow SMSF and our Grow US solution is completely independent of Stake. We do no receive any commissions, referral fees or any other compensation from Stake.
Grow SMSF offers a discounted solution to make a self-managed super fund more accessible for self-directed investors looking to use Stake to buy or trade US stocks from Australia.
There are a number of differences if you were to compare Grow SMSF to many of the low cost online only service providers available. We recommend anyone comparing SMSF service providers look at the following as part of their research:
The above is not a comprehensive list. Take a look at our blog to find more specific information on comparing Grow SMSF to other service providers.
Is the Grow US Stake SMSF solution the best way to trade US stocks from Australia using superannuation?
In our opinion it’s the most transparent way if you are looking at how to buy international shares from Australia – namely the NASDAQ if you want to buy Tesla shares and not use the expensive brokerage of the bank owned Commsec International Platform.
Kris Kitto from Grow SMSF has been using Stake for his own SMSF portfolio for the last few years and found the Stake fees are very competitive and it’s been the easiest way to buy US stocks using superannuation. There are other superwrap solutions such as HUB24 and Netwealth which can also enable ownership and gives super investors the ability to buy US shares in Australia, and these many be good solutions for people who don’t want an SMSF.
One of the most fundamental principles of a self-managed super fund is separation of assets. A separate Stake account is needed in the name of the SMSF.
Separation of assets means that assets, accounts and investments of an SMSF must be in the name of the trustee of the fund on behalf of the SMSF and cannot be mixed or intertwined with assets and investments of the members / trustees of the fund. If a trustee fails to keep assets of an SMSF separate the breach of the regulations must be reported to the ATO by the independent auditor of the fund. The trustee(s) could be personally fined or in extreme cases the ATO may deem the fund non-complying.
If day trading is a strategy you wish to pursue, we suggest you undertake your own research into suitable providers before opening an SMSF and a Stake account for that purpose.
The set up fees for a new SMSF are as follows:
Grow SMSF intentionally DOES NOT offer ‘FREE’ SMSF establishment to ensure we provide you with the best possible upfront support and service you deserve.
There is no need to use any 3rd-party tools to separately track your SMSF portfolio. Incorporated into our solution is detailed investment and capital gains tax (CGT) reporting.
With Grow SMSF as part of our Stake SMSF solution, we will upload all your trades and transactions into our SMSF accounting platform (normally next business day). We track all holdings in your Stake portfolio and when you sell the system will automatically minimise the capital gains on the sale.
At this time the uploading of Stake trades and transactions is a manual process. For Grow SMSF to complete your annual SMSF accounts, tax return and audit, you will be required to download and provide certain reports and statement from the Stake online platform. We will then load all the trades into our SMSF software and convert everything into Australian dollars.
In addition to CGT reporting, we also take care of the realised and unrealised gains on USD <> AUD currency conversions.
Once your portfolio is up to date in our SMSF accounting platform, we can provide you with online access. Our software provides daily pricing updates so you can see the value of your portfolio.
If you are on the Stake Base $95 per month fee ($1,180 per annum including SMSF audit) we only upload and update your Stake portfolio transactions and holdings once per year. If you are on the Stake Flexi or Bespoke service packages we can update your portfolio on a more regular basis (monthly) which might be useful if you want to regularly track your portfolio position and any capital gains / losses in Australian dollars for the year.
Grow SMSF does not hold an Australian Financial Services Licence (AFSL) or is not an authorised representative of an AFSL holder.
The advice and support we provide to our clients is limited to either taxation or the compliance of your self-managed super fund under the relevant laws and regulations.
Grow SMSF is not a financial adviser. We do not issue advice, recommendations or opinion in relation to acquiring, holding or disposing of investments or superannuation interests.
Any information contained within this website is provided as an information service only and, therefore, does not constitute, and should not be relied upon as, financial product advice. None of the information provided takes into account your personal objectives, financial situation or needs, and you will need to make your own decision about how to proceed.
Alternatively, for financial product advice that takes account of your particular objectives, financial situation or needs, you should consider seeking financial advice from an Australian Financial Services licensee before making a financial decision.
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