According to this bogleheads write-up (Link), if you invest in non-US domiciled ETF and are neither US citizen, US green card holder nor US tax resident, then you may not be subjected to US Estate Tax for holdings over $60,000. However, there is a big caveat: your broker cannot be US based. Otherwise, you will still be limited to the $60,000 holdings where the US Estate Tax will still apply to anything over that.



So if you plan to have more than $60,000 invested, perhaps it will be better to find other brokers which are non-US based. Or, perhaps with in-depth knowledge of the intricacy of US taxation system and proper planning, there are certain steps that can be taken to repatriate your monies back to Malaysia soil while avoiding detection in the event of an unexpected death. ¯\_(ツ)_/¯

On the other hand, there are conflicting information on the internet (Link) where due to certain technicalities, buying Ireland domicile ETFs automatically protects you from US Estate Tax, no matter the holdings amount, even if done through a US-based broker. Perhaps it has something to do with the ETF structure is itself a "foreign corporation". So in this case if your holdings is greater than $60,000 but is:
1. Ireland domiciled ETF traded through a US-based broker = not subjected to US Estate Tax
2. Individual US corporation stocks traded directly through a US-based broker = subjected to US Estate Tax.

Perhaps also the boglehead wiki quoted above is only referring to the circumstances where one is invested in Ireland domiciled ETF but also kept more than $60,000 in cash in the US broker. In this case:
1. Cash amount over $60,000 will be subjected to the US Estate Tax.
2. ETF, irregardless of the amount, is not subjected to the US Estate Tax.

In any case, I am not a financial consultant. Therefore, take all these information with a grain of salt. Do note that this information may only be true at the time of this writing as US taxation laws may change anytime if the US Government wants to rake in more money, what more 20-30 years to come.

This post has been edited by RayleighH: Apr 13 2022, 02:15 AM

For me I am treating my EPF funds as the Bond portion. Therefore, my focus at the moment is 100% USA ETF. However, compared to my EPF account, this allocation is still peanuts so I'm trying to raise my allocation in USA ETF to be a substantial percentage compared to my EPF. After that only will I think of how to balance the allocation of future funds.

Your RSP value is only RM400, so your fees will be roughly 1.1% for every transaction. Kinda missing out of the purpose of Vanguard funds with their low fees of 0.08%. Perhaps it might be possible to adjust the RSP to a longer frequency so that your transaction is at least RM5500 to keep your fees to the minimum?

In FSM's VT webpage, there is a calculator tab. The fees quoted there seems to be quite expensive. Not sure if these are extra fees inclusive of the 0.08% or USD1 min.



This post has been edited by RayleighH: Jun 7 2022, 09:38 PM

After some digging, I found out that the the minimum fee of 0.08% or USD1.00 is for monthly RSP. I could only find this information published in FSM Singapore's website (Link). Not sure where this information is on FSM Malaysia's website. To enjoy the low rate of 0.08%, one will have to be able to contribute, monthly, at least USD1,250 or MYR5,500.


If you can't afford to fork out this much per month and decide to only do a lump sump purchase after saving up for a few months, the minimum fee is at an exorbitant rate of 0.08% or USD8.80 (Link). In order to enjoy the low rate of 0.08% fees, one will have to make a lump sum purchase of USD11,000 or MYR48,300. That is freaking expensive.


I don't think it is wise to invest in ETFs through FSM unless if you are able to fork out the amount mentioned above. Otherwise, FSM fees basically defeat the whole purpose of ETF investing which is their extremely low total expense ratios. You're better off going through a different brokerage like IBKR.

Perhaps their exorbitant fees is to protect the other UT funds available through their FSM website. Otherwise, probably many people will withdraw money from other UT funds to ETFs.

This post has been edited by RayleighH: Jun 8 2022, 02:47 PM

The USD1,250 is based on the assumption that one will want to minimize the brokerage fee. In this case with FSM, one can minimize to the point where the fees are only 0.08% of your purchase cost.

The calculation is as follow:
0.08/100 x Z = USD1.00
Z = USD1,250 or MYR5,500 (1USD = MYR4.40)

Any purchase above this amount will entitle you to enjoy the low fees of 0.08%. Any purchase below this amount and a higher portion of your RSP will go to fees.

If your uncompromisable criteria is "local broker", then I don't think you have any other choice. If I am not mistaken, IBKR started becaming popular among Malaysians a few years back also because there were no other affordable option to purchase US ETFs. In fact, if one does not mind foreign broker, IBKR fees are much cheaper than FSM ETF even for people with low capital. USD0.35 per transaction.

I remember before IBKR, the discussion around here was about TD. Unfortunately Malaysians do not have easy access to TD. Therefore, the discussion progress got stalled for a while till IBKR became an option through Tradestation. Perhaps in the future Malaysians will also have access to brokerage which charges zero commission for ETFs, hopefully.

This post has been edited by RayleighH: Jun 8 2022, 06:20 PM

As others have mentioned, your calculation is correct. FSM RSP ETF is relatively more expensive than IBKR for Malaysian. However one downside with FSM ETF is that in the event that you would like to inject or withdraw any amount outside of the RSP (i.e buy the dip or sudden loss of confidence), the fees jumps all the way to 0.08% or minimum USD8.80. So be aware.

(Do correct me if I got this wrong.)

This post has been edited by RayleighH: Jun 13 2022, 06:15 PM

That is an option. Personally, I would prefer to be at as few different platforms as possible.

Genuine question. May I know the reason that you would prefer local brokerage over firms like IBKR despite their competitive fees and convenience (all in one)?

This post has been edited by RayleighH: Jun 14 2022, 08:47 AM

Just so you know, transferring into USD is the only one which is relatively more complicated, where you are advised to open a bank account in Singapore. Transferring into other European currencies (EURO or GBP) is rather straight forward. No need to go through Singapore bank account. Just direct from your bank account to IBKR using Wise/Instarem to convert.

In fact, some mentioned that they were able to transfer into USD directly from their local bank through Wise. Maybe this is a new development. Lon3Rang3r00

For withdrawal, some guides mention that you can withdraw directly from ibkr to your local banks. However, I've not gotten into the details of the fees and if it's applicable to all banks in Malaysia. Perhaps there is a catch where the forex rate will not be as good as Wise but I'll have to do more research.

This post has been edited by RayleighH: Jun 15 2022, 12:44 AM

USD 1.23 fees = 1.37% "sales charge". Comparable to other FSM unit trusts. At least you are enjoying much much lesser management fees for ETFs compared to Unit Trusts.

Please don't take me wrongly. I am not here to diss or promote one platform over the other. I am not saying that FSM RSP is a lot more expensive than IBKR. Initially that may be my impression of FSM RSP, but after doing further calculation, my opinion is that it is only slightly more expensive than IBKR's, but it is still a decent choice if your goal is to set up a monthly RSP. I may still be wrong for all I know. So if you have the numbers and don't mind sharing the calculations, it may do good to everyone. Who knows, maybe you would have shed some light to everyone and this FSM RSP may prove to be a competitive platform to the existing options. Again, I am not trying to be sarcastic here, in case my typing come across as that.

Even through IBKR, I do not do monthly transactions since I am trying to minimize my cost. Therefore, I only do a transaction every few months after pooling sufficient money to reduce the commission to an acceptable amount personally. This is what I was comparing to when I mentioned that FSM fees are more expensive that IBKR, especially if you conduct transactions outside of the your RSP (USD8.80 per transaction).

To be fair, in making my previous statements and assessments I should have also mentioned that I do not invest in USD denominated ETF. I mainly invest in GBP denominated ETF. The cost here is only the minimal fee at Wise and the brokerage commission. Therefore, I am may not have been aware of the costs involved for ACH wise direct from MYR to USD. Are there additional fees or is the rate as shown as when we check on Wise front page? Perhaps you can share your knowledge with me.


On a side note, Wise fees for RM400 to SDG only costs ~RM4. Why do you quote up to RM15. Is that the cost for a different platform?



This post has been edited by RayleighH: Jun 16 2022, 08:43 PM

Just trying to do some calculations for the sake of it. Perhaps I may learn something new here too. Therefore, if there are any mistakes or any costs that I may have left out, I would appreciate if anyone were to point it out. The calculation will be updated to reflect an accurate comparison.

Comparing the converted amount between Wise and FSMone, we can probably agree that FSMone has better rates or lesser forex fee.
FSMone: USD90.30
Wise: USD89.93
Difference: USD0.37

I am not familiar with USD ACH so if there are additional fees on top of those quoted by Wise, I may have missed it out. Do inform me otherwise and I can update the calculation.


With USD90.30 in FSMone, after deducting processing fee (USD1.00) and stamping fee (USD0.23), one is left with USD89.07 to purchase fractional ETF shares. Fees percentage comes to 1.36%

With USD89.93 is IBKR, after deducting ACH fee (USD0.50) (Update 1: thanks to izati87 for the information) and commission fee (USD0.35), one is left with USD89.08 to purchase fractional ETF shares. Fees percentage comes to 0.94%.

If the calculation so far is accurate, IBKR is, perhaps arguably, marginally cheaper. That 0.43% difference may be substantial to some, while to others they may not be bothered by that.

So for now, prior to any correction from anyone, it seems that FSM RSP benefits are mainly automation, local brokerage and convenience.

Update 2:
After another round of correction, it seems that FSM RSP may in fact be competitive or cheaper than IBKR for small amounts.

Update 1:
Clearing fee for NYSE is rather minimal for this comparison of 1.XX shares. So in my opinion, it can be considered negligible for the sake of this calculation.


This post has been edited by RayleighH: Jun 16 2022, 10:05 PM

I was comparing to the converted amount mentioned by an earlier poster. In any case, I have updated the converted amount for FSM RSP to USD90.30.

I agree. That was one unintended omission on my side during the calculation.

For IBKR, you can add a Trusted Contact Person. Not sure if this is similar to KWSP's nomination or this person will have easier time to retrieve your investment in the event of incapacitation.

For me, because I haven't assign one, it keeps on popping up in a notification window whenever I sign in through their web portal.

This post has been edited by RayleighH: Jun 24 2022, 12:40 PM