The Big Reveal of US Stock Investment Costs | Re-entrusted vs. Overseas Brokers, How to Minimize Fees?

For Taiwanese investors, the choice of entry path into the US stock market directly impacts investment costs. The two most mainstream channels—Replicated Commissioned Trading (Fubon, CITIC, etc.) and Direct Account Opening with Overseas Brokers—each have their advantages and disadvantages. This article will compare the actual cost structures of both methods in depth to help you make the smartest choice.

The Fundamental Difference Between the Two US Stock Investment Channels

Replicated Commissioned Trading: Domestic Broker “Intermediary” Model

Replicated commission trading refers to investors establishing an account through qualified domestic brokers (such as Fubon, CITIC, etc.) who handle US stock trading on your behalf. In this model, your orders pass through two transfers—first to the domestic broker, then to the US market—hence the name “Replicated Commissioned Trading.”

The biggest convenience of this method is full operation in New Taiwan Dollars: no need to exchange currency yourself, no need to open overseas accounts, as domestic brokers automatically handle all currency conversions. Additionally, your funds are directly regulated by Taiwan’s Financial Supervisory Commission, and trading disputes can be appealed to domestic financial institutions.

But what is the cost? The complexity of the process generally results in higher fees—typically between 0.25% and 1% of the transaction amount, with most brokers setting a minimum consumption threshold (per transaction $25-$100 USD).

Overseas Brokers: Direct Participation Model

Trading with overseas brokers is as straightforward as trading Taiwanese stocks—skipping domestic intermediaries and placing orders directly on US exchanges. The advantages are clear: extremely low or zero commissions, fast transaction speeds, and a wide range of investment targets.

The cost is higher process complexity: you need to prepare USD yourself, handle currency exchange, arrange international remittances, each incurring additional fees.

Hidden Cost Components Beneath the Surface

Actual Cost Breakdown for Replicated Commissioned Trading

When you place orders via replicated commission trading, the actual costs are twofold:

First Layer: Broker Direct Charges

• Trading commissions are the main expense, with rates from 0.25% to 1%. Pay attention to minimum consumption settings—buying $1,000 worth of stocks with a 0.3% fee costs only $3, but if the minimum is $25, your effective rate becomes 2.5%!
• Other service fees (remittance, paper statements, etc.) are usually negligible.

Second Layer: Hidden Third-Party Fees

• SEC Exchange Fees: charged only when selling, at 0.00051% of the transaction amount, collected by the US Securities and Exchange Commission.
• FINRA Trading Activity Fee (TAF): also only on sales, calculated at $0.000119 per share, with a minimum of $0.01 and a maximum of $5.95.

These two fees are often integrated into the broker’s quoted commissions, making it difficult for investors to notice.

Cost Breakdown for Overseas Brokers

Although trading commissions have generally dropped to zero, other costs should not be overlooked:

These scattered fees can add up and become a significant burden for small investors.

Actual Fee Standards of Mainstream Brokers and Banks (2025)

Replicated Commissioned Broker Fee Comparison

Overseas Broker Fee Advantages

Bank Currency Exchange Costs (priced in New Taiwan Dollars)

Actual Case: Cost Comparison at Different Investment Amounts

Calculating with the optimal plan (Replicated commission trading with Fubon’s lowest fee of 0.25%, overseas broker Mitrade with zero commission, currency exchange via Bank of Taiwan), assuming an exchange rate of 1:30:

Key Finding: When a single transaction exceeds $6,000, the cost advantage of overseas brokers becomes evident. But this also depends on trading frequency.

Hidden Impact of Trading Frequency

The above comparison is based on a single transaction. But what if you are an active investor?

Suppose you invest $10,000 and make 4 trades (2 buys, 2 sells):

• Replicated commission costs: $25×4 = $100 (commission) + $11.67 (currency exchange fee) = $111.67
• Overseas broker costs: still only about $16.67 (exchange and remittance fees only once)

In this scenario, the advantage of overseas brokers expands to $95.

Optimal Choice for Different Investors

Small Funds + Low-Frequency Trading

Recommended: Replicated commission trading (especially with brokers like Fubon or CITIC with lower fees)

• Reason: Convenience of no currency exchange, minimal impact from minimum consumption
• Suitable for: Investors with fewer than 3-5 trades per year

Medium Funds + Moderate Frequency

Recommended: Overseas brokers (Mitrade or Charles Schwab)

• Reason: When single investments exceed $6,000, advantages are clear; more than 4 trades annually, costs are lower
• Suitable for: Investors trading 1-2 times per month

Large Funds or High-Frequency Trading

Recommended: Overseas brokers

• Reason: Each additional trade linearly increases replicated commission costs, while overseas brokers have virtually no incremental costs
• Suitable for: Professional traders, systematic investors

Additional Notes on Dividends and Taxation

Regardless of the method chosen, US cash dividends are subject to a 30% withholding tax. This tax can be partially reclaimed by filing US tax forms, but it makes no difference to the investor.

Overall Recommendations

1. Clarify your investment habits: How large is each transaction, and how many trades per year? This directly influences the optimal solution.
2. Don’t be fooled by surface fee rates: Minimum consumption and hidden fees are often more “costly” than percentage rates.
3. Consider the overall experience: Besides costs, think about currency exchange convenience, customer support, platform stability.
4. Reassess periodically: Fee structures change, so recalculating annually is wise.

Final reminder: The above fee standards are based on 2025 data; institutions may adjust fees at any time. Before making a final decision, directly consult the target broker or bank to confirm the latest rates and ensure your calculations are based on accurate information.