🧠 How to choose where to invest?

Choosing a broker requires much more than analysing a price list.
Focusing exclusively on fees can make you overlook valuable elements such as tax filing support, responsive customer service and much more.

Today, we're taking time to explore:

• What are the minimum criteria to avoid making mistakes?

• What's the worst-case scenario if you choose the wrong broker?

• How can you transfer your investments elsewhere if you change your mind?

The minimum criteria to avoid mistakes

Before comparing fees or services, the non-negotiable criterion is security.
Every year, thousands of people fall victim to unregulated platforms or fraudulent websites that imitate well-known brokers.

In Europe, each country has a financial regulator that maintains public registers of authorised brokers:

• Germany: BaFin

• Austria: FMA (Financial Market Authority)

• Spain: CNMV (National Securities Market Commission)

• France: AMF (Autorité des Marchés Financiers)

How to verify? Search for the broker's name + your country's regulator (e.g., "broker name + FMA"). If the broker doesn't appear anywhere, that's a red flag.

Also beware of identity theft: always verify you're on the real website of a bank or broker before entering your information.

Common unpleasant surprises

1. The products you want aren't available

Not all brokers offer the same products.
Before opening an account, check on their website whether the solutions (account types, fund types, etc.) you're interested in are actually available. Most online banks and brokers have a public search function to confirm this.

Be careful: Just because a broker lists hundreds of ETFs doesn't mean they have the specific ones you want.

2. The advertised fees don't apply to your situation

€1 per order, that's great! Except when this rate only applies to orders above €500. Below that, it's €5, or there's a monthly subscription of €3 you hadn't noticed.

That's why you need to carefully review the complete fee schedule. Look for mentions like "from", "subject to conditions", "excluding additional fees" to get an idea of the real cost based on the amounts you plan to invest.

3. Customer service takes weeks to respond

Your account is blocked (bugs happen), or you need an urgent document for your tax return.

You contact customer service. No phone line, or just a voice command system. A chatbot going in circles. An email address where messages seem to disappear into a black hole.

Before opening an account, I recommend reading current customer reviews on Trustpilot, Google, forums, or Reddit.

4. Tax declaration becomes a nightmare

Between April and June, you need to report your investment income on your tax return. Some brokers handle it for you, some provide tax documents that make it straightforward. Others provide nothing which means you have to calculate everything yourself.

If you make a mistake, you can change brokers

If a bad experience makes you consider transferring, know that it's possible.
Generally, you just need to contact the new broker so their teams can arrange to retrieve the securities from your old account.

Transfers take time, several weeks, sometimes months. During this period, your securities are frozen.

You can contact the support teams of both brokers for a quote specific to your portfolio. Each situation is different (number of positions, account type, transfer fees).

Checklist: criteria for choosing your broker

Here are the points to verify before opening an account, and why each matters.

1. The broker or online bank is known and regulated by your country's financial authority

2. Tax-advantaged account types you're interested in are available

3. The products you want are available

4. The minimum order amount suits you*

5. The interface is intuitive and tutorials are available to guide you

6. Automatic investment plans are available

7. The fees match your profile**

8. The broker supports you with declarations

9. Customer service has very good reviews

*If the minimum order is €100 but you want to invest €50 per month, do you adapt or find a broker that suits your needs?

**How to verify:

• Note the fees per order (fixed or percentage)

• Note the minimum order amount

• Note any monthly subscription fees

• Calculate the annual cost based on the amounts you plan to invest

I hope you now see why fees – whilst important – aren't the only criterion to consider when choosing a bank or broker for investing. If the services and conditions don't suit you, a good price isn't worth much.

Feel free to forward this edition if you found it useful and think it could help someone else.

Take care,
Nessrine

P.S. Why can't some people with high incomes afford to retire? I recently discussed this in an interview (in English) with Pauline de Zeeuw for Money Feelings. Read more here.

P.P.S. Want to start investing in ETFs? I've created a free course right here.

Important reminder: This content is for educational purposes only, not investment advice. Please do your own research before getting started. Remember that all investments, including ETFs, carry risks of capital loss.