Trading platforms available in/from Europe

quiddity · 17 April 2018 at 6:57PM

I know this is a forum based in the UK, and I apologise for a slightly off-topic post, but I'm British, speak only English, and know there are many smart folk here who might be able to help!

So: I am resident in Belgium. I would like to open an account with an investment trading platform, mainly to buy and hold index trackers in fairly small amounts, with a decent diversity of investments. Obviously if you are resident in the UK there are loads of good options (on my advice, my mum goes with Cavendish). But so far as I can see, none of the UK-based platforms will open accounts for clients not resident in the UK (if I am wrong about this, I would love to hear it!).

However, it seems there are not nearly so many good options for small personal investors available on the continent. The successor to TD Direct, Internaxx is most prominent in searches, but their platform fees seem prohibitive, and moreover they have a "minimum fund subscription" of €2000, which is really not going to let a small investor build a diverse portfolio.

The best I have found is Keytrade Bank. They have two options. One is a fairly standard investment platform, which has a decent selection of funds, but you pay nearly €10 platform fee each time you buy in, so that's 1% of a €1000 investment; again, not great for a small investor wanting diversity.

Alternatively, they do a regular investment plan, which has no platform fees at all, but (a) you have to pay in for 5 years, and (b) you choose from a very limited range of 40 funds, all of which seem to be actively managed things with fees of at least 1.5% and usually more. Whereas what I really want are trackers with tiny fees.

As you can see, none of these options are much good for what I'm after. So, if anybody has suggestions for trading platforms that are: available to residents of Belgium; low-cost; and allow access to a good range of low-cost index trackers; then I would love to hear them! Thanks.

PS sorry for the lack of links, since it's my first post the forum won't let me use them!

CH2IS · 17 April 2018 at 7:32PM

Dutch brokerage firm Degiro may be worth a look. I think I'm right in saying it offers some ETFs commission free and the fees are otherwise relatively low. The company is also working on a free stock trading platform called Deziro.

quiddity · 17 April 2018 at 8:07PM

Thanks for the reply! I had come across Degiro, but I found it very hard to find information on their website about what funds were actually available via their platform. I will take a closer look, and if I find out anything useful I will report back.

Thanks!

CH2IS · 17 April 2018 at 8:22PM

No worries. Actually, I doubt whether Degiro offers any funds. Other low-cost brokers, like x-o.co.uk, don't. You would be able to access low cost index trackers through ETFs though. I'd say it's definitely an option. Someone will soon correct me if I'm wrong!

quiddity · 17 April 2018 at 8:39PM

Yeah, I don't expect them to offer their own funds, but I would like access to (e.g.) iShares, Fidelity, Vanguard funds . . . and not just ETFs. I still find their website completely opaque, I can't see anywhere an actual list of the funds etc you can trade (just categories), and their account opening procedure seems to require that you put money in immediately . . . which I'm not willing to do just to see what's available! I have written to them and will report back! Thanks again.

Voyager2002 · 17 April 2018 at 9:32PM

Don't write off either Internaxx or Keytrade. That 10 Euro fee is acceptable because you do not need to buy lots of different things to get diversity -- choose one ETF that tracks a wide range of markets. Alternatively, if you want to pay for management then choose one of the funds that Internaxx offers that give exposure to many different markets, and so the minimum subscription will not matter.

quiddity · 17 April 2018 at 9:44PM

Thanks for the reply! I do think Internaxx is not an option for me: a minimum €2000 investment per fund is not appealing, and their sheet of fees seems to add up very quickly.

I take the point that one needn't have a really big range of funds in one's portfolio to count as diverse. Nonetheless, if I were investing (say) €2000 a year, and I wanted to split that between four funds (tracking two different stock markets and two bond markets, say), I'd be paying €40, i.e. 2%, to invest via Keytrade, plus the fund fees. Compared with what's available in the UK, that is quite a lot. I'm not really too happy with the idea that you suggest of just choosing one fund; perhaps I should be more comfortable about it. I'll reflect on that.

I'm not into paying for management—not just because of the obvious point that managed funds tend to have much higher fees, but also because of the point that in the long term they're generally outperformed by trackers. So I'm not really attracted to that Keytrade option.

Even though I'm not sure I agree, I'm grateful for your thoughts, and I'll reflect on them further to see if I should in fact agree. Thanks!

grey_gym_sock · 17 April 2018 at 10:40PM

i'm not sure if which more mainstream UK platforms might accept non-residents. without more choices, degiro is certainly worth a good look. (that is partly because you mention relatively small amounts to invest. for larger amounts, could be worth looking at interactive brokers.)

i'm pretty sure degiro doesn't have funds at all, just ETFs. that might work OK for you if you prefer passive management anyway. e.g. at its simplest 1 ETF tracking a world equities index, and 1 UK government bonds ETF (assuming you are likely to return to the UK eventually) could be a sensible portfolio.

note that with degiro, most of their accounts allow degiro to lend out your investments, which adds an extra kind of risk which doesn't apply to most platforms. you can avoid that by opting for a "custody" account, which has fees for receiving dividends, making it not quite so cheap as their other accounts.

however, 1 option might be to use a "custody" account and use it to buy accumulating ETFs (which don't pay dividends).

whether that's a good idea does partly depend on how dividends are taxed for you, i.e. in belgium. in the UK, dividends are taxed when they occur, even if they are accumulating. which makes holding accumulating ETFs (in a taxable account) a bit messy for UK residents. but i believe some countries don't tax accumulating dividends. so it's worth checking the situation in belgium.

also, are there taxed-advantaged accounts available to you in belgium? (ISAs are a UK thing, but many countries have some form of pensions.)

quiddity · 18 April 2018 at 10:47AM

Thanks for this. I think you are right that Degiro's range of ETFs could be suitable. I have finally found on their website a list of commission-free ETFs (I'm not allowed to post links, unfortunately) and their fees do seem reasonable.

I hadn't realised that about the two different account types. Thanks for that.

I would be planning on buying accumulating funds for sure. You are right that I need to investigate how they are taxed.

As to your last point, I think there are tax-advantaged pension schemes available in Belgium, though nothing comparable to an ISA. I should do some more research into them. It's all a bit slow owing to language issues . . . And I need to compare the fees etc . . . and an added complication is that I only expect to be resident here for a couple more years, and who know where after that . . . plus there's Brexit . . . ugh!

Thanks for your thoughts!

Trading platforms available in/from Europe

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