Here we will discuss pros and cons of several stock brokers that are popular mainly in Europe.
This article is written from the point of view of small investor.
This is not investment advice
- no transaction fees, just spreads
- minimum buy amount 50$ with no fees
- ideal for slowly scaling into position in small increments
- small positions make it easier to control risk
- 15% dividend tax/fee for global stocks with exception of dividends from USA
- they will assign you personal portfolio manager that will call you from time to time and you can ask questions (about overnight fees on CFDs, and so on)
- eToro Club (from certain tiers, you will get free Wall Street Journal subscriptions, free withdrawals, they will send you gifts on your birthday like headphones or a backpack)
- 10$ monthly inactivity fee after 1 year of not logging in to the portal. They just take cash until it is gone, they will not liquidate any of your stock positions because of this
- 25$ withdrawal fee (only on lower club membership tiers)
- eToro takes 30% from dividends originating from USA
When we use no leverage on eToro we are buying the actual stock. Leveraged positions are CFDs - Contracts for difference, hence you have no real stock ownership with leveraged trades.
Due to high fee for USA dividends eToro is highly suboptimal to hold USA dividend stocks long term.
On the other hand it is perfect for buying dividend stocks from Europe and China. Of course non dividend paying USA stocks are ideal as well.
The eToro Club is amazing idea, it is the only broker I know of that makes you feel that they care about you even when you are relatively small investor. Plus when the portfolio manager calls you they are not selling you anything, they will just ask how they can help you.
- 0.5 Euro transaction fee for USA stock exchanges + very small fee per each share, it is more convenient to buy more expensive shares
- relatively large choice of ETFs that can be bought without a fee once a month
- good variety of stock exchanges
- 2,5 Euro yearly fee per each stock exchange used
Degiro has very reasonable transaction fees for USA exchanges. Also optimal for building ETF portfolio in small increments each month without a fee.
Note: there are differences between trading versus holding account
Lynxbroker.cz via Interactive Brokers
- access to great amount of stock exchanges
- 4-5$ fee for currency conversion
- 5$ transaction fee for stocks and ETFs is still rather high
- monthly ~8$ fee when your account is woth less than around 1000$
Due to high total fees the minimum reasonable position per trade is around 2000$. Around 10$ total fees per 2000$ trade makes the fee around 0.5% of the position. In my opinion such percentage is still rather high and over the long term can significantly cut from returns.
Lynx is good for large positions of dividend ETFs that we want to hold over the long term/forever.
Fio.cz Fio bank
- it is actual bank
- safe to hold funds long term
- connected to the Fio bank account, no need to wait one or two days for wire transfer
- very high transaction fees, around 8$ per trade
good for long term holding of larger positions of ETFs. Absolutely unsuitable for trading of individual stocks.
Trading212.com Trading 212
Trading 212 is UK based broker, charges only spread fees. You can make incredibly small fractional share positions. From 1$ or so. Nice mobile app. They charge 0.7% for funding the account from youd debit card after you exceed your funding limit (something around 2500-3000$ in total). Alternatively you can of course send money via bank transfer, but most likely it will be SEPA transfer if you are not residing in UK and SEPA transfers are charged as well.
Great option for buying wide range of US based ETFs (iShares, Vanguard, ...) that are not available on eToro (traded on London Stock Exchange).
For small accounts eToro, Trading212 and Degiro are the best option so far.