Choosing where to open your first investment account is a decision that partly determines how much you'll pay in fees over the years. With the growth of online brokers, comparing carefully before deciding has become more important than ever.
Always check the broker's regulation
Before any other consideration, check that the broker is duly authorized and supervised by a recognized financial regulator (in Spain, the CNMV, or equivalent bodies in other EU countries under EU passporting). Trading with an unregulated broker, however attractive its terms may look, exposes your money to considerable risk.
The fees you should compare
- Trading fee per transaction, which may be fixed or variable depending on the amount.
- Custody or maintenance fee, charged periodically on the value of your portfolio, increasingly rare among the more competitive brokers.
- Currency exchange fee, relevant if you're going to invest in international markets in a currency other than the euro.
- Transfer fee if you decide to switch brokers in the future.
What products it offers: not all brokers are equal
Check whether the broker gives you access to the products you're interested in (index funds, ETFs, shares on specific international markets), since not all brokers provide the same range of markets and products.
Protection of your money: the Investment Guarantee Fund
In Spain and the EU, there's a guarantee fund that protects part of your investment (up to a set limit) in case the broker itself goes bankrupt, though this protection doesn't cover losses arising from normal market performance, only the insolvency of the intermediary firm.
A common mistake: choosing based only on the interface or marketing
Many first-time investors choose a broker based purely on how attractive the app looks or on marketing campaigns, without comparing actual fees or checking the applicable regulation. User experience matters, but it shouldn't be the main deciding factor.
You don't need the "perfect" broker to get started
Just as with the timing of when to start investing, it's not worth delaying your start while searching for the theoretically optimal broker among dozens of options. Choosing a reasonable one, well regulated and with competitive fees, and getting started as soon as possible, is usually more effective than an endless exhaustive search.
Simulate the effect of fees on your results
Our compound interest calculator helps you visualize how a seemingly small difference in fees affects your final capital over the long term.