I am often asked what do I trade with? However, I also often post screenshots of my trades or reviews of my portfolio on Revolut, so you can guess which broker I use. Nevertheless, I decided to make my assessment and comparison of brokerage systems. This article was inspired by a recent article in Aripaev, so I will draw a lot from there.
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If you are too lazy to read a lot of letters, then use Revolut. On this, in principle, the whole comparison can be completed. I really think their platform is the best, here I am guided by commissions and the emotional component and their work and the work of the application as a whole. So if you are too lazy to read, then go to the Appstore or Google Play, register and start trading. For inquisitive minds then there are many letters below.
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The best brokerage platforms for the Baltic market are Interactive Brokers, Revolut (recently become a BANK!), eToro and Trading 212, in addition to internal Admiral Markets, LHV and other banks SEB, Swedbank and so on. There is no point in discussing our local banks as they are just in medieval times compared to foreign listed brokers and even their price war does nothing to save their situation.
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Let's take each broker step by step and start with Revolut
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It will come as a surprise to many, but Revolut is several times larger than Swedbank in terms of the number of clients and has long been a European bank with all the benefits it entails. We will not analyze insurance, cards, cash withdrawals and other goodies here, but I will say that they are amazing.
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In the case of investment products, the choice of stocks is relatively mediocre, as compared to other platforms, Revolut lags behind. There are major exchanges and a core mix of blue chips and big firms, which I absolutely love. Revolut's website states that they have over 750 stocks on their list and there are currently no ETFs (Index Funds). However, you can trade cryptocurrencies, gold and silver.
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In Revolut, you can invest starting from 1 euro in any shares, that is, make a fractional transaction and this is a huge plus for novice investors!
The most common account offers one free transaction per month. Each subsequent transaction costs 1 euro. The next level is a €2,99 per month account that allows you to make three free transactions. The 7,99 monthly premium account offers five free transactions per month, while the 13,99 euros per month account offers unlimited free transactions (I've been using it for like half a year already!).
In addition, all accounts are subject to an annual custody fee of 0,12% of the market value of assets, which is deducted from the account, but some pennies are deducted from me there. It is important to mention that stands and limit orders have been added to Revolut. You can set them directly in the application or make a trade at the market price (professional traders do not recommend this kind of trade!).
It's also a huge plus that Revolut has an awesome phone app. It is very affordable and you can make deals right from the gym, and sometimes I managed to earn up to $ 30 per hour in the gym. By the way, in the table you will find a comparison of the commission between the main brokers and the calculation of the total costs if you make one trade per year. With Revolut, you only have to pay 1,44 euros per year.
Trading 212
According to the price list, Trading 212 is the most profitable platform for an investor who does not want to bargain and plans to hold assets for a long time. Trading 212 operates in London, but European investors work through a Bulgarian branch, where the investor's assets are protected up to 20 euros in the event of the platform's insolvency. Trading 000 does not talk about additional insurance, so the risk is slightly higher to trade through it.
The platform has several interesting features that allow the investor to make investing easier. Trading 212 offers group investment, that is, the investor has the opportunity to buy a small part of expensive shares. In addition, the investor can set a suitable stock portfolio and a suitable share, then the platform will automatically deposit money according to the portfolio set by the investor. This feature makes it very convenient to diversify the portfolio of a long-term investor.
The minimum amount is 10 euros, can be added to the account by bank transfer, in other cases - 1 euro. The investor can choose between three different accounts on the platform, depending on whether he wants to trade or invest. On a regular investment account, an investor receives a wide range of stocks and ETFs, but cannot deal with riskier asset classes.
In terms of commissions, this is the most profitable platform of all where there are no transaction and administration fees, especially in the case of an investment account. In the case of a trading account, an activity fee is added. The platform has a total of nine base currencies.
The investor should take into account that due to high demand, it will not be possible to open an account immediately. Opening of new accounts is currently suspended and the investor will be notified separately when the opportunity to create an account becomes available. It may seem strange, but when you offer free donuts to everyone, you can't serve all the people at the same time, can you?
You can read about what was written in the comments on instagram about this part of the post. here.
Let's continue to consider brokerage platforms. Now let's move on to Interactive Brokers.
Interactive Brokers or IB is one of the most popular platforms and is also used by several well-known local investors such as Kristi Saare and Jaak Roosaare. And not only by local investors! The entire LHV platform is built on the Interactive Brokers platform! Its popularity is due to low commissions and a large selection of stocks. You can open an individual or corporate account, and there is no minimum amount for each account to start with, as is the case with eToro. And of course, having a corporate account is considered a huge plus!
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Interactive Brokers allows you to invest in cryptocurrencies. In addition, the platform can store its assets in 22 currencies. The advantage of the platform is also considered to be cheap leverage, which offers good returns to experienced investors. You can get a very favorable loan. For example, you have shares worth 10 euros. IB offers to take another 000 euros against the security of the initial 10k invested in shares at a preferential interest (usually in the region of 000-10% per annum !!). That is, you can start trading with 1k right away! Unfortunately, I never had a chance to try out this cool feature.
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Interactive Borkers is the only platform listed on the exchange. This reduces some risks, as the user can always be aware of the financial situation of the company. Other platforms do not have financial reporting obligations and, therefore, investors cannot be sure of the company's financial position.
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In terms of fees, this is a slightly more expensive platform and the fee system is a bit more complex. The investor is offered two systems: a fixed commission or pricing based on volume. On a volume basis, it seems like the best solution for the small investor, which we all are here.
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For volume-based pricing, transaction fees are a minimum of $0,35 and a maximum of 1%. The investor has to pay $10 per month including management fee, monthly transaction fee and $2 currency conversion fee per transaction.
In other words, an investor must make at least 28 trades in one month to support him below the $10 limit. If the investor's portfolio is less than $2000, the management fee is $20. What was the trigger for me to initially close all accounts in IB (but I already managed to open it again). I must say that I am delighted with Revolut, but completely disappointed with IB. Also, I constantly argue with my good friend @bull-hull (former broker) that their platform is terribly outdated, has a lot of bugs, illogical and impractical.
Her good friend @bull-hull is constantly protecting her. What for? He says that it is a professional platform and not for “hamsters” like me with my 6k in my portfolio. In my opinion, the platform is wildly inconvenient. Withdrawal and deposit of funds is to tear out the eye and take out the entire customer friendly experience in the trash. Account statements are pain and sadness. They generally seem to be in a normal form can not be obtained. I'm not talking about just constant bugs and customer support hovering in the clouds (waiting for a response to my requests in 3 day cycles).
Closing an IB account and withdrawing funds took me 1,5 weeks and spent several hours of resources. According to my example on the IB table, you would have to spend $242 to hold one €100 share. Thus, in my “rating” IB is clearly in last place. In the closed instagram group, you can directly watch the video of my pain and suffering with IB. It is hard enough to recommend this professional platform.
Let's move on to our Estonian colleagues - Admiral Markets. A company of Estonian origin providing international trade services. You can also buy stocks and ETFs with an Admiral Markets investor account. The company's website states that investors can choose from over 4350 stocks and over 200 ETFs, but a trading account must be opened to trade other instruments. The platform can be launched from one euro and assets can be held in ten currencies.
The fee states that you must be charged $0,02 per share, or a minimum of $1, to operate in the US markets. This means that it is worth buying at least 50 shares and at the same time not making too many trades in cent shares. Money can be withdrawn from the system twice a month for free and you have to pay 5 euros for entry. In addition, the Admiral Markets website states that if there are no transactions and no open positions for two years, a liability fee of €10 per month will be added.
In general, this is kind of strange because with passive accounts. It seems as if it is some kind of burden for companies to have passive customer accounts and they must be urgently disposed of or start earning on them. In fact, they cost nothing to the company, but many brokers have taken the path of collecting commissions. Although, of course, there is logic that broker-banks need to do KYC (know you customer) and constantly check and update customer data, which to some extent provides additional red tape for them.
And, of course, it will not do without our local banks, such as LHV. I am of the opinion that it is better to forget about local banks, unless you are trading on the Baltic Exchange, at least they have free transactions there. In all other cases ... Commissions are simply cosmic and the functionality is plucked out. The only serious plus is some automation and connection with the tax, but the commissions are so hellish that I am ready to give up this plus.
That's all. Of course, there are other brokers for different regions, they will also be different. The ones listed in this article are the main ones in our field of vision. In general, support with a comment or read what others wrote or thought already in my personal Instagram. You can also join us in our closed club by paying a subscription and sending private group request.