An Individual Investors Guide to the Online Brokerage Galaxy

By FINTECH Books Contributor, Martin Dienstbier
Follow: @brokerchooser  

Individual investing should be simple, cheap and everybody’s privilege. But this is often not the case. Choosing what to invest in is not the only difficulty. The tough decisions start even earlier, when you need to choose your service provider – the broker.

You could open a brokerage account directly with your bank or follow the hot lead to a super-cheap broker you saw advertised on the internet. Only later do you realize that the excessive transaction fees are biting a huge chunk out of your profit, or even worse, that your investments evaporated due to the broker’s fraud and insufficient investment protection scheme. An unsuitable trading platform, limited product offerings, lack of access to desired markets, complexity of account opening or nightmares with filing tax reports are some other issues that can spoil your investment journey.

While the brokerage space has evolved a lot in recent years and investors now have range of good choices (especially if you’re US based), choosing ‘the one’ is still not easy even for experienced investors. Information is often scarce, complicated, or misleading, and access to your preferred broker may be limited by country of residence or by a wall of paperwork which needs to be submitted.

We have summarised the current international brokerage landscape (focusing specifically on options available to European investors), based on detailed comparative research performed by our team. We have highlighted the most interesting findings of this research. For example, did you know that the average investor can save over $1000 per year and reduce the transaction fees 10 times by switching from the most expensive to the cheapest broker?

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