How the German investor culture has changed due to Corona

After a dramatic collapse in prices in mid-May, most shares have risen sharply. The gold price even climbed to a new all-time high at the end of July. Many investors recognized their opportunity in the crisis and invested cheaply in attractive brands. The special thing about it: surveys by various media show that in Germany alone up to 500,000 people open a depot for the first time and bought stocks. The shareholder quota should have increased significantly in a very short time. The local brokers regularly report new record numbers, both in terms of the accounts opened and the number of trades.

The run on the stock markets

This development is not surprising, because there has actually been no getting around the stock markets for years. In times of low interest rates, a classic checking account does not generate any profits. Many banks have even introduced penalty interest rates, which means that savers have to pay a certain fee for their credit. Experts agree: If you don’t want to watch your own savings being eaten up by inflation, you should have a securities account increase. But how and where do you best invest your money?

The majority of investors in Germany have a deposit at the bank and order through the investment advisor in the nearest branch. This combination is convenient for many people: they have known each other for years and on the way to the bank the customer can also withdraw money from the machine. The problem with this, however, is the very high fees. Anyone who has to spend large sums of money on advice and service seriously diminishes their return. The missing income must be recovered through larger investments. In the past few years, several online brokers have emerged that appeal to self-decision makers and shine with low fees. But here too, investors should take a closer look.

Increasing fees with decreasing selection

The typical online broker charges between 1 and 5 euros per trade. For comparison: At a financial institution listed in the DAX, customers pay up to 39.95 euros for exactly the same amount of shares on the same stock exchange (source: F.A.S. from 07/19/2020). As a rule, the so-called “neo brokers” forego custody fees, so investors only pay something when they buy or sell. Another plus point is deposit protection in accordance with legal requirements. And one more advantage: if you use an online broker, you don’t have to leave the house, you can trade from the comfort of your sofa or while you are sitting in your favorite café.


What is the catch? Most online brokers only offer their users a very limited selection of trading venues. The companies concentrate on those stock exchanges that provide them with the best margins. Current example: An online broker from Kulmbach only removed all regional exchanges from its program a few weeks ago. There is no official reason, but industry experts are sure that the provider would like to ask his customers to pay more and therefore only offer them certain trading venues.

The counterpart to the typical provider

The smart broker is a real alternative. The online broker is only a few months old, which is why some potential investors are still hesitant, but the specialist press has already awarded the smart broker several times. In April, the newcomer immediately won first place in the annual “Euro” bank test (in the brokerage category). The trade journal “Finanztest” even described the smart broker as “the cheapest online broker with a wide range”. In addition, behind the smart broker is the wallstreet: online group, which has operated several stock market portals for years and is certainly a household name for many investors.

The Smartbroker scores with a large selection, personal care and deposit insurance that goes far beyond the usual level. Contrary to the trend, the smart broker even lowered its prices in May. As of now, customers can trade stocks, funds, ETFs and derivatives for 0 euros. There are over 1,400 fund savings plans with no front-end load or order fees. There are also almost 300 ETF savings plans that are permanently free. Securities loans are available from smart brokers starting at 2.25 percent. In this case, too, the deposit is free and it only takes a few minutes to open. The hotline will help with problems: 030/275 77 6200.

However, the offer of the smart broker also has a small flaw: So far there is no app, trading takes place exclusively via the website, which is responsive, i.e. also works on the smartphone or tablet. The company has already announced that it is working on an application for Android and iOS.

Author: F.R.

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