Gur's Cool Stuff

How Not to Pay ESOP ANY Fees

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by

gur111
in

If you like paying fees or are lazy and you think it’s not worth it, feel free to skip this one.

Motivation

ESOP fees are (at least for Apple employees) is conversion (can be around 0.6-2.1%) + 22ILS or if you want to transfer USD it’s 30$ + whatever you bank charges for receiving foreign currencies (can be 0 but I’ve heard cases where it’s over 200$).

So let’s say you sold $5K of whatever, you’d pay at minimum 0.6% (or 0.7% if you choose ILS). That is best case possible and assuming you trust ESOP don’t tell you they happened to convert the money at a low point and hope they don’t pocket the difference (I’m not saying it happens, I’m saying I have no way of verifying and I don’t like it).

Also, if you invest the money in an external broker (like IBI or Excellence) you have some significant delay until the funds are available for you to invest. Which time when the money isn’t invested also costs you money which I approximated to be another 0.1% loss).

In addition to all that, I wanted to be able to withdraw dividends immediately and save me the hassle of transferring the funds from my bank to Excellence.

Did I convince you? No? Good, it’s not advice and I’m not telling you what to do, I’m just sharing what I did and why.

Background

So ESOP is part of the Pheonix Group which hold Excellence as well. My portfolio happens to be in Excellence already. So I figured it would be faster to get the funds if ESOP “transferred” the money to Excellence. Because I’m annoying and like to push boundaries, I also argued I shouldn’t pay fees in this case because they don’t actually transfer the money anywhere, they just credit my account that’s with them.

Turns out I don’t have to pay fees in this case and from what I can tell, it’s actually faster.

Requirements

  1. ESOP program (RSU/ESPP)
  2. Trading account with Excellence
  3. From Excellence – account ownership confirmation1
  4. Your Israeli ID scanned (I think both sides and to be safe I included the appendix as well).

How

  1. Send an email to ESOP Helpdesk (Esop-Helpdesk@esop.co.il) saying “hi” or something.
  2. From the auto-reply you’ll get a link to update your bank information
  3. Enter the company name, symbol (Apple is AAPL), your ID.
  4. Select you want to update your Israeli account
  5. Put Excellence’s bank information (link is valid for the time of writing).
    • You need to put the info for USD transfers (the Leumi one) to maximize fees savings.
  6. IMPORTANT: Fill your sub-account information with Excellence (it appears in your account ownership confirmation).
  7. Choose USD
  8. Upload the your ID scan
  9. Upload the account ownership confirmation

Notes:

  • I didn’t need to enable/change anything on Excellence’s side but others who asked Excellence were told they need to “open” their accounts to be able to receive funds from any account.
  • For the first transfer I needed to send an email to remind them I shouldn’t be charged the 30$ fees. Consecutive transfers didn’t have that issue though.
  • Remember the number may still be different because ESOP still charge you taxes as legally required so don’t be me and send an angry email saying they “forgot again” to not charge the fees.

Results

So far I think it’s been 4-5 times they transferred funds directly to my Excellence account and except for the first time. I mentioned, I’ve had no issues.

I know some other folks also did that trick and AFAICT it worked for all of them.

If you want you can withdraw the funds to your bank and it’s still cheaper (5 first transfers/year in ILS are free. USD transfer is 15$ which is half ESOP’s fees). Conversion fees from USD/ILS may be around the same as with ESOP but you control exactly when to convert.

To Open Excellence Account (Affiliate Link)

I’ll get a bonus if you join but tbh I had an account with them long before I leveraged it to avoid ESOP’s fees and like them. I’m ok with their app and rarely/never use the web app:

https://xnestrade.xnes.co.il/page/101?customerCode=2601529f

Disclaimer

This isn’t advice. This is sharing my experience mixed with anger to companies leveraging their position with trapped customers to charge fees.

I’m not licensed and not aiming to give financial advice and not responsible for whatever you choose to do with the information I shared here.

  1. You can get that from the app (of if you saved it when you opened the account) הפניקס בית השקעות -> מסמכים ודוחות -> אישור בעלות חשבון. ↩︎

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