There are hardly any decisive investors who have parked significant sums of money with traditional banks. Anyone who has ever entered a Sparkasse branch and understands vocabulary such as issue surcharge or management fee, who has noticed what it means when advisors at Sparkasse or Volksbank are supposed to sell funds, has an inkling of how high the margins had to be.
At first glance, just looking at the business model, it is clear that plenty of money was looking for a new home. Because every Sparkasse branch, every employee, every property has to be earned and should generate returns. Returns that the customer can of course cede. Over time, however, the investment has changed and more and more investors are proactively informing themselves. You quickly notice that many certificates, ETFs or funds for self-decision makers yield two or three percent more returns per year. Given an average return in the Dax of six to seven percent over the decades, one suspects that half of the profit has been left behind.
Broker in comparison
For this reason, too, the broker landscape is booming, with many young new brokers cavorting. Trade Republic is an example that was recently valued at around 5 billion in a funding round. The quality is not even brilliant, in the last 15 volatile months the performance has lagged behind Comdirect, Consorsbank or Flatex. Trade Republic invests heavily in marketing, however, as they know how much potential investor money is looking for a home in Germany.
When it comes to the criteria for newcomers to direct brokers, the mix of performance and costs should be the best. There, the Berlin model is convincing in Germany with the smart broker, which is nowhere near as big as the top dogs, but is growing continuously.
The offer of the Neobroker includes many different services. For example, Smartbroker focuses on small investors. The broker is particularly strong with savings plans. Here it is cheaper than many others and has taken over the price leadership. In total, there are more than 1,400 investment funds eligible for savings plans and more than 700 ETF, ETC and equity savings plans available. Another advantage is the attractive depot change service and the aggressive price structure. Zero euros for custody account management, 4 euros flat fee, for orders over 500 euros there are even no fees via Gettex. Limit and order changes are also free of charge.
Pay attention to the details
Other neo brokers also offer free exchange trading or trading at low fees. With the increasing interest in stock market transactions, but also in old-age provision, the young brokers have seen an enormous influx of customers. The competition is intense, which benefits investors. The differences start with the platform. Not every broker offers all trading platforms. More than 10 exchange and electronic trading venues are available to investors across Germany.
Trading with free brokers is free and investors receive the full Gettex offer. What is missing are a comprehensive service, analysis and trading tools, savings plans and an app solution. At Scalable, the price range of the fees ranges from 0.99 euros per trade to 4.99 euros per month. Scalable scores points against free brokers with more than 1,000 ETF savings plans and almost 4,000 actively managed funds. Mobile use via app also makes trading easier.
In contrast to some other brokers, competitor Justtrade has a well-stocked crypto offer. The selection is not quite as extensive as with the established broker Etoro, but with Bitcoin, Ethereum, Litecoin, Ripple and Bitcoin Cash, investors can trade the five most highly regarded cyber currencies. However, the traded cryptos cannot be transferred to their own wallet and therefore cannot be used as a means of payment. The four issuers are involved in direct trading in certificates: Societe Generale, UBS, Vontobel and Citigroup. The bottom line is that around 7,300 stocks, more than 1,000 ETFs and around 500,000 derivatives are available.
Conclusion: When comparing neobrokers, investors should pay attention not only to the fees but also to the trading focus of the various institutes and choose a broker according to their own preferences.
Daniel Saurenz runs the stock exchange portal Feingold Research with his team. It offers a daily market letter that you can test free of charge for 14 days. Sign in at Info@feingold-research.com or try the stock exchange service under this one link out. You can find training days and coaching under NEW feingold-academy.com