Author Topic: Best broker for a European  (Read 7126 times)

alwaysonit

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Best broker for a European
« on: October 05, 2014, 05:18:47 PM »
What is the cheapest and safest broker that I can invest with as a European, other than Interactive Brokers?

I'm not a tax resident of a country that has a tax treaty with USA and so cannot fill out the W-8BEN and cannot open an IB account.

I've opened an account with Saxo, and they're well established, but they charge a 0.1% load when buying and selling from a European stock exchange. I will be investing €500,000 so a fixed charge rather than a percentage charge will likely benefit me.

I would also like a broker that will allow me to invest in EUR, but pay my dividends (paid in USD) into a sub account denominated in USD so as to avoid losing out when the currency is converted.

http://the-international-investor.com/2011/best-international-online-stock-brokers is where I've been getting information from so far.

I've been trying to stick with large well-established brokers in the fear of the broker failing and the investors being penalised. Am I being too conservative here, or will all assets be segregated and safe with all brokers?

TommyDIY

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Re: Best broker for a European
« Reply #1 on: January 11, 2015, 07:50:19 AM »
Hi alwaysonit,

I see nobody was able to provide you with any recommendations which is a shame because I have the  exact same question myself now 😄

I am based in the Netherlands and am hoping to take the first baby steps into the investing world. I have no previous experience so any advice is greatly appreciated. I see in your original question you mentioned that you have an account with SaxoBank, which is the company that we were thinking about going with. I would be very interested in findng out if your experience has been good with them or if you have jumped ship to someone else.

Or indeed if any other people based in Europe have any better recommenditions for either myself or AlwaysOnIt, I would love to hear from you.

Cheers
TommyDIY

makane

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Re: Best broker for a European
« Reply #2 on: January 11, 2015, 10:56:26 AM »
Hello TommyDIY, I'm in the Netherlands and use DeGiro.

They used to be an institutional broker, but have opened up to private investors in recent years.
You may find some bad reviews of people who suspect that, since they are so cheap, there must be something wrong with them.
I have finely read all documents and worked with them for 1,5 years so far and never had any problems.
Friendly staff too. Covered by the general bank-insurance thingy of the Netherlands (up to 100K).

Investing in most index funds, including a lot of Vanguard's ETF's, is free of commission.
They automatically process dividends for free, and send in your W-8BEN for you.

@alwaysonit Not sure if it's possible to invest in EUR and get your dividends paid out in USD with any broker, but you can always ask. DeGiro is available in a couple of European states, but without knowing which one you're in, I don't know whether you have access to them.

Peacefulwarrior

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Re: Best broker for a European
« Reply #3 on: January 11, 2015, 11:43:47 PM »
Depends on what country you are in?

jugglingcontinents

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Re: Best broker for a European
« Reply #4 on: January 12, 2015, 02:54:51 AM »
Hi there, fellow Euro-resident (NL) here. I use Meesman as my broker for its low fees and simplicity. However, they have very limited fund options.

TommyDIY, you may find this thread interesting (brokers in the Netherlands)-
http://forum.mrmoneymustache.com/ask-a-mustachian/investing-in-stock-index-funds-in-holland/

makane - Thanks for mentioning DeGiro. I was thinking of them but didn't go through with it because I read this blog post (https://econowiser.wordpress.com/2014/02/07/if-something-sounds-too-good-to-be-true/). The blogger basically says that  with De Giro, "you have to sign an agreement which states that they are allowed to lend your stocks to third parties.... and ALL RISKS are the investor’s responsibility!!!" Do you know if this is true?

TommyDIY

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Re: Best broker for a European
« Reply #5 on: January 12, 2015, 12:38:10 PM »
Thank you JC and Makane!

Both your posts are very informative. I clearly have a bit of homework ahead of me now. The Holland link is a treasure trove of info all of which is relevant for me.

Off to get stuck in now.
Thanks
TDIY
« Last Edit: January 12, 2015, 12:40:54 PM by TommyDIY »

ScroogeMcDutch

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Re: Best broker for a European
« Reply #6 on: January 12, 2015, 04:24:29 PM »
Hi there, fellow Euro-resident (NL) here. I use Meesman as my broker for its low fees and simplicity. However, they have very limited fund options.

TommyDIY, you may find this thread interesting (brokers in the Netherlands)-
http://forum.mrmoneymustache.com/ask-a-mustachian/investing-in-stock-index-funds-in-holland/

makane - Thanks for mentioning DeGiro. I was thinking of them but didn't go through with it because I read this blog post (https://econowiser.wordpress.com/2014/02/07/if-something-sounds-too-good-to-be-true/). The blogger basically says that  with De Giro, "you have to sign an agreement which states that they are allowed to lend your stocks to third parties.... and ALL RISKS are the investor’s responsibility!!!" Do you know if this is true?

Disclaimer: I am not an expert on what lending the stocks means, and haven't researched it extensively. So, proceed at your own discretion and peril ;)

Loosely quoted, this link http://marktgevoel.nl/featured/item/35479-degiro-leent-effecten-uit-is-dit-erg (in Dutch unfortunately) explains it is used for other parties to be able to short the stocks. Usually being lended to market makers like Optiver, but can also be used by hedge funds and others. The counterparty would have to default, then the broker's money is taken, and only then the investor's money would be gone.

I know Vanguard also lends a little bit of it's stock to high quality counter parties to suppress some of the costs and keep the TER low. DeGiro does it with all stocks it can, and I would say the platform is quite well suited for more speculative trades, but I would not like to introduce such a risk into a long term portfolio. The article also states it is common practice to do this lending. DeGiro will also start offering a service that doesn't lend the stocks, but it will cost more.

Personally I also use meesman.nl, but would like a real estate fund to go with what they offer.
« Last Edit: January 12, 2015, 04:28:37 PM by ScroogeMcDutch »

jugglingcontinents

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Re: Best broker for a European
« Reply #7 on: January 13, 2015, 04:17:57 AM »
ScroogeMcDutch - thanks for the DeGiro explanation! My Dutch, especially when it comes to financial terms, is limited so your translation helps a lot! :)

Yes, I'm still looking for a decent REIT to invest in as well. Perhaps Binck or Think have something to offer - will post back here if I find anything.


Marius

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Re: Best broker for a European
« Reply #8 on: September 23, 2017, 01:48:37 PM »
Almost registered with DeGiro when I found this:
Apparently, DeGiro wants you to pay €2,50 per exchange per year:
http://www.amsterdamtrader.com/2016/01/degiro-is-penny-wise-pound-foolish.html

this seems to be true, look at their fees here:
https://www.degiro.ie/data/pdf/ie/IE_Feeschedule.pdf

what do you think?