Comparing brokers: the 10 criteria that actually matter

Look past the brand. A global broker typically operates several legal entities, and the one on your account agreement determines your protection. "IBKR" is not a licence; Interactive Brokers Ireland Limited is. Check the entity name in the terms, then check that entity in the regulator's own public register.

What the compensation schemes actually cover:

• Cash at a firm with a banking licence is covered by the deposit guarantee — EUR 100,000 per client in the EU, CHF 100,000 per client per bank in Switzerland, GBP 85,000 in the UK.
• Securities are your property, held in custody. In an insolvency they are handed back, not compensated. That is a stronger position than a cash claim, and it is why segregation matters more than the headline compensation figure.
• Investor compensation only bites when the securities cannot be delivered — fraud, sloppy record-keeping, a shortfall. In the EU the statutory minimum is EUR 20,000 (Germany pays 90% of the claim up to that cap); the UK FSCS pays up to GBP 85,000 per person per firm.
• Crypto held at a broker is normally covered by nothing at all. Check this specifically if you plan to hold it.

A publicly listed parent, audited accounts and a banking licence are genuine signals; none of them is a guarantee. No broker is guaranteed safe.

Compare the total, not the headline. The components are commission, any per-order handling fee, exchange and regulatory pass-throughs, the bid-ask spread you cross, and any transaction tax.

Fee models behave very differently by order size:

• Flat per order (for example EUR 1) is brutal on small orders and free money on large ones. A EUR 200 order at EUR 1 costs 0.5%; a EUR 20,000 order at EUR 1 costs 0.005%.
• Percentage with a minimum (for example 0.08%, minimum EUR 2) inverts that. The minimum dominates until EUR 2,500, then the percentage takes over: a EUR 20,000 order costs EUR 16.
• Percentage with a cap is usually the best of both. 0.05% with a EUR 29 cap means a EUR 100,000 order costs EUR 29, not EUR 50.
• Zero commission means the revenue comes from somewhere else — FX, the spread, securities lending, or interest on your idle cash.

Transaction taxes are not broker fees and you cannot shop around them: 0.5% UK stamp duty on share purchases, 1.0% on Irish shares, 0.3% French FTT on large-cap French shares, and Swiss transfer stamp duty of 0.075% on domestic and 0.15% on foreign securities (half of the statutory 0.15%/0.30% rate, the counterparty bearing the other half).

If you buy anything not denominated in your account currency, you pay a conversion markup twice: once on the way in, once on the way out. Dividends get converted too.

Published markups across mainstream European brokers run from roughly 0.15% to about 1%. On a EUR 5,000 order that is the difference between EUR 7.50 and EUR 50 — per side. Over ten trades a year it dwarfs the commission line entirely.

Two mitigations are worth checking for:

• A multi-currency account. If you can hold USD directly, you convert once, at a moment of your choosing, and trade USD stocks out of a USD balance indefinitely.
• The auto-conversion default. Some brokers convert automatically on every trade and every dividend unless you opt out. That default is expensive and it is easy to miss.

Trading costs are one-off. Holding costs compound.

A custody or platform fee of 0.15% a year on a EUR 60,000 portfolio is EUR 90 a year. Held for ten years, that is EUR 900 in cash plus the return the money would have made — roughly EUR 1,200 at a 5% growth assumption. It is the largest avoidable cost most buy-and-hold investors carry, and plenty of brokers charge nothing at all.

Watch also for:

• Exchange connectivity fees — one broker charges EUR 2.50 per non-home exchange per calendar year, capped at 0.25% of account value. Cheap if you use two exchanges; less cheap if you collect twelve.
• Inactivity fees. These range from about EUR 10 after 12 or 24 months of no trading to USD 10 a month after only three months of inactivity. The aggressive version costs USD 120 a year on an account you have simply stopped using. It is disproportionately common at CFD brokers.
• Interest on idle cash. Some brokers pay a share of the deposit rate, some pay nothing. On EUR 20,000 of cash the difference between 0% and 2% is EUR 400 a year — larger than most people's total commission bill.

Count the products you will actually use, not the total. A broker advertising 10,000 warrants and 3,000 CFDs is not a better broker for a long-term ETF investor than one offering 2,000 ETFs and nothing else.

Then look at the reverse: a broker whose economics depend on leveraged products has an incentive to route you towards them. Under the EU rules, retail CFD leverage is capped at 30:1 for major currency pairs, 20:1 for non-major pairs, gold and major indices, 10:1 for other commodities and non-major indices, 5:1 for individual equities and 2:1 for crypto, with negative balance protection and a 50% margin close-out.

Those same rules force every provider to publish the percentage of its own retail accounts that lose money. Read that number on the provider's own homepage before opening anything leveraged — it is a firm-specific, regularly updated figure, and it is consistently a large majority.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Since 30 June 2026 the EU-wide prohibition on payment for order flow applies without exception — the transitional carve-out for member states that had permitted it expired on that date under Regulation (EU) 2024/791. Brokers that previously earned rebates for routing your orders to a particular venue no longer can, inside the EU.

That does not make execution uniform. What to check:

• Can you choose the venue? Some brokers route everything through one market maker; others let you pick from thirty exchanges for a small surcharge. For a liquid blue chip the difference is negligible. For a thin small cap it is not.
• Trading hours. A broker whose only venue closes at 22:00 CET cannot fill your US order at 15:30 ET on a half-day.
• Order types. If limit, stop and good-till-cancelled orders are missing, you are trading with one hand tied.

Screenshots are marketing. Judge a platform on: available order types, whether the mobile app can do everything the web app can, whether you can see a real position history with cost basis, whether tax documents are downloadable, and whether there is a genuinely free demo account. A well-designed app that only supports market orders is worse than a plain one that supports limits.

This is the criterion people discover in April.

• Germany: a domestic custodian withholds the flat 25% Abgeltungsteuer plus the 5.5% solidarity surcharge — 26.375% in total, plus church tax where applicable — and applies your Sparer-Pauschbetrag of EUR 1,000, or EUR 2,000 for jointly assessed spouses, if you file a Freistellungsauftrag. A foreign broker does none of this: you declare everything yourself in Anlage KAP.
• Austria: domestic brokers act as withholding agent for the 27.5% KESt; foreign ones do not.
• Switzerland: private capital gains are generally untaxed, but you still need a tax statement for wealth tax and income, and the 35% Verrechnungssteuer on Swiss dividends is reclaimed through your return.
• US securities anywhere: the default US withholding on dividends is 30%, reduced by treaty — typically to 15% for German, Austrian and Swiss residents — once you have a valid Form W-8BEN on file. Confirm the broker collects it. Tax rules change; check the current position with your own tax authority or adviser before relying on any of this.

The exit is rarely priced on the front page. Ask three things: what does a withdrawal cost and how long does it take, is there a free allowance per month, and what does an outgoing securities transfer cost per position. Transfer-out charges of around EUR 20 per position are common on some schedules and zero on others; with fifteen positions that is the difference between EUR 0 and EUR 300 to leave.

Test it before you need it. Send a specific question — not "how do I open an account" but something like "which entity books my account and which compensation scheme applies" — and see what comes back, in what language, and how fast. Then find the complaints procedure and the ombudsman or regulator you can escalate to. A broker with no phone number and a 72-hour email queue is a different proposition when a trade has gone wrong.

Cheapest is not always right.

• If you are investing EUR 200 a month, a broker with free savings plans beats one with a lower per-order commission that does not offer them.
• If you need options, futures or forty exchanges, a EUR 1 flat-fee neobroker cannot do the job at any price.
• If you value a German-language tax statement and a phone line, paying EUR 3 more per order to a domestic bank is a rational trade, not a mistake.
• If you hold six figures, a 0.15% custody fee outweighs any commission difference — invert your priorities.

1. 1Write down your real usage: order size, orders per year, currencies, products, portfolio size in three years.
2. 2Price one full round trip at each shortlisted broker using your own numbers, including FX both ways.
3. 3Add the annual holding costs — custody, connectivity, inactivity, forgone interest on cash.
4. 4Confirm the legal entity, its regulator and the applicable compensation scheme in writing.
5. 5Check the tax reporting you get, and whether Form W-8BEN is handled for you.
6. 6Read the exit costs: withdrawal fees and per-position transfer-out charges.
7. 7Open a demo or fund the minimum first, place one small real order, and see what the confirmation actually says.

Fee schedules, regulatory limits and tax allowances change. Verify current figures on the broker's own pricing page and with the relevant authority before acting.

This article is information, not investment advice.