How to Choose the Right Investment Broker for ETFs and Stocks
Choosing a broker can feel overwhelming — so many platforms, so many fees.
But if you get this right, you’ll:
✅ Save money on fees
✅ Access the ETFs you really want
✅ Easily set up long-term savings plans
This guide breaks it down:
✨What to check before signing up
✨ Key broker comparison points
✨Pros and cons of major providers
✨Checklist for long-term, simple investing
🎯 First: Know What You Need
Before choosing a broker, get clear on your goals:
| Question | Why It Matters |
|---|---|
| Do you invest monthly (savings plan) or in larger chunks? | Some brokers offer free savings plans but charge per trade |
| Do you already own ETFs or stocks? | You might need account transfer options |
| Are you looking for specific ETFs? | Not all brokers list every ETF, especially niche ones |
| Do you prefer EU domiciled ETFs (UCITS)? | Essential for European investors to avoid tax issues |
| Do you need fractional shares? | Some brokers allow small monthly investments, others don’t |
| Are you ok with app-only brokers? | Or do you want desktop trading options? |
📊 Key Factors to Compare
✅ 1. ETF and Stock Selection
Can you access all the ETFs you want?
Can you buy your favorite companies’ stocks?
Tip: Make a wishlist of ETFs/stocks and check availability.
✅ 2. Savings Plan Options
Minimum monthly investment (some brokers start as low as €25)
Free savings plans (often limited to specific ETFs)
✅ 3. Trading Fees
| Fee Type | What to Check |
|---|---|
| Savings plan fees | Is it free or €1-2 per buy? |
| Stock trading fees | Fixed fee (€1/€4/€9) or percentage-based? |
| Currency conversion fees | Foreign stocks can come with 1.0–1.5% extra |
| Inactivity fees | Some brokers charge for dormant accounts |
| Custody fees | Avoid brokers with annual custody costs |
✅ 4. Hidden Costs
Spreads on buying/selling ETFs (especially with free trades)
Dividend handling fees
Exchange connection fees (rare but worth checking)
Understanding Hidden Broker Costs
Let's dive a little deeper into what's behind these hidden costs. What does all of that mean?
It’s easy to focus only on obvious fees like trading commissions. But the hidden costs often eat into your returns without you realizing it. Let’s break down the most common ones:
📉 Spreads on Buying/Selling ETFs (Even With “Free” Trades)
What it is:
The spread is the difference between the buy price (ask) and sell price (bid) of an ETF.Why it matters:
Even if a broker offers “zero commission” trades, you still pay the spread — and it can quietly cost you 0.1%–0.3% or more per trade.When it’s worst:
Low-volume ETFs (especially niche thematic ETFs) have wider spreads.
Outside main market hours, spreads widen as liquidity drops.
Brokers who route your orders via partners (common with “free” brokers) may show you worse prices than market average.
How to check it:
Look at the live bid/ask spread in the broker app before buying. A tight spread (< 0.1%) is normal for big ETFs (e.g. MSCI World). Anything larger cuts into your returns, especially with frequent trades.
💸 Dividend Handling Fees
What it is:
Some brokers charge you a fee when dividends are paid out, especially if the dividend comes from foreign ETFs or U.S. stocks.Why it matters:
These fees are deducted before you receive dividends, often €1–€2 per payout.
Can reduce your dividend yield by 10-30% if you invest in dividend ETFs or income stocks.
Particularly painful for small portfolios where fees eat up a bigger percentage.
How to check it:
Check the broker’s fee schedule under “Dividend service” or “Corporate actions”. Some brokers like DEGIRO apply small dividend fees, others like Trade Republic do not.
🌐 Exchange Connection Fees (Rare, But Real)
What it is:
Some brokers charge an annual “connection” or “exchange access” fee to access certain stock exchanges — typically €2.50–€10 per year per exchange.Why it matters:
This fee is not obvious during onboarding but can appear in your annual statement.
Example: DEGIRO charges €2.50/year per exchange except for main European ones.If you only invest in XETRA (Germany), no problem.
But if you buy US ETFs (NYSE) or Swiss stocks, you might pay extra.
How to check it:
Always check under “Service fees” or “Connectivity fees” on the broker’s website.
🚨 Summary: The Hidden Fees That Sneak Up On You
| Hidden Cost | Typical Amount | How It Hits You |
|---|---|---|
| Spreads | 0.1–0.3% per buy/sell | “Free” brokers make money from wider buy/sell prices |
| Dividend Fees | €1–€2 per payout | Less cash in your account on dividend day |
| Exchange Fees | €2.50–€10/year | Annual charge for non-local exchanges |
💡 Tip: If you invest in big, popular ETFs (like MSCI World) and use accumulating funds (i.e. you get no dividends paid out, your gains get reinvested automatically), you can often avoid most hidden fees.
If you invest in high-yield ETFs, U.S. stocks, or thematic ETFs, it’s extra important to check the fine print.
✅ 5. Account Flexibility
Easy account transfers ("Depotübertrag" in German brokers)
Options to transfer ETFs in-kind
Good customer service (especially when problems arise)
🏆 Common Broker Choices (Europe Example)
| Broker | Pros | Cons |
|---|---|---|
| Trade Republic | ✅ Free savings plans, low stock fees (€1), easy app | ❌ Limited ETF selection, no desktop version |
| Scalable Capital | ✅ Flat fee option, free savings plans, good ETF choice | ❌ Some complaints about customer service, no fractional shares |
| DEGIRO | ✅ Huge product range, very low stock fees | ❌ €2.50 annual connection fee, no savings plans |
| Consorsbank | ✅ Strong customer service, many ETFs free via savings plans | ❌ Higher fees on one-time stock purchases |
| Comdirect | ✅ Good balance, free savings plans, solid desktop platform | ❌ Savings plan ETFs limited, standard fees higher |
| Interactive Brokers | ✅ Access to global stocks/ETFs, low currency conversion | ❌ More complex, $10 inactivity fee under $100k assets (waived for EU retail sometimes) |
🧾 Quick Checklist Before Choosing
✅ Make a wishlist of ETFs and stocks
✅ Check if the broker platform offers these ETFs and stocks (not all platforms offer all ETFs)
✅ Check if your current portfolio can be transferred
✅ Compare savings plan conditions
✅ Watch out for currency conversion fees
✅ Prefer brokers with no custody or inactivity fees
✅ Decide between app-only vs. full-service broker
My Personal Tips
If you want set-and-forget investing, look for:
Free ETF savings plans
No custody fees
Good app with clear portfolio view
If you prefer global diversification or buying individual stocks, accepting small fees (like €1 per trade) often gets you much better flexibility.
A very good and easy to digest resource to find the right ETFs for you is justetf.
💡 Summary: Simple Investing = Freedom
✅ Choose a broker that matches your ETF list
✅ Watch fees — small savings compound big over decades
✅ Separate long-term investing from your daily bank account
✅ Prioritize simplicity — investing should be boring and automated
👉 Want help getting clarity on how to set up a simple portfolio, from brokers to ETFs to Bitcoin?
Check out my “Mystery Money” course — money strategy made simple. Sign up for the waitlist here.
