Retail investors: how many brokers do they use, and why?
More and more retail investors are juggling several brokers: some for tax reasons, others for products. We look at the options and their pros and cons.
English · Original discussion in Spanish · Published
Retail investors: how many brokers do they use, and why?
The trend among retail investors is clear: a single brokerage account is no longer enough. More and more are juggling two, three or even four brokers, spreading their portfolios across low-cost platforms, neobrokers and traditional banking. The reason is not whim: each intermediary offers a different combination of costs, products, tax convenience and user experience.
Degiro, Trade Republic, Interactive Brokers, XTB, Myinvestor, ClickTrade… the choice is wide and preferences are divided. Those looking for complex products such as options or futures go for Interactive Brokers, but its onboarding is cumbersome and support is scarce. Those who prioritise simplicity and mobile-first design choose Trade Republic, although critics call it a "comic-book broker" for offering poor information and limited functionality. Taxes also matter: having a broker with a branch in Spain, such as XTB, saves headaches with the Modelo 720 (Spain's foreign asset reporting form) and wealth declarations.
The dilemma of spreading yourself thin
Some investors keep inactive accounts just to hold on to a Spanish IBAN and sidestep the 720 reporting requirement, a rule that affects foreign brokers such as Interactive Brokers (Ireland) or Degiro (Netherlands). Others, by contrast, concentrate everything with a single firm, such as ClickTrade, which has served them for ten years without a hitch. The decision depends on your capital: those with little see no point in diversifying intermediaries.
It is striking how easily many people open new accounts: "I'm going to open quite a few more to get to know them and compare", one participant admits. This almost collector-like behaviour clashes with the traditional loyalty to a single bank. It reflects an ecosystem where customers seek the best product for every need, with no strings attached.
The recurring complaint: usability versus taxes
User experience makes all the difference. Interactive Brokers is "wonderful" according to its fans, but the learning curve is steep even for those who read the manuals. Trade Republic wins on express onboarding but loses on data: US share prices in euros, daily gains that don't reflect the real cost of investing… Details that, added up, drive the average investor to despair.
Against this, traditional brokers such as BBVA or ClickTrade offer solidity but with higher fees. XTB, based in Spain, emerges as a middle ground: tax convenience and acceptable functionality.
In this fragmented market, every investor builds their own combination. The legions of small savers no longer settle for a single broker: they want the best of each one, even if that means managing four passwords and juggling Spanish tax authority (Hacienda) forms.
The trend among retail investors is clear: a single brokerage account is no longer enough. More and more are juggling two, three or even four brokers, spreading their portfolios across low-cost platforms, neobrokers and traditional banking. The reason is not whim: each intermediary offers a different combination of costs, products, tax convenience and user experience.
Degiro, Trade Republic, Interactive Brokers, XTB, Myinvestor, ClickTrade… the choice is wide and preferences are divided. Those looking for complex products such as options or futures go for Interactive Brokers, but its onboarding is cumbersome and support is scarce. Those who prioritise simplicity and mobile-first design choose Trade Republic, although critics call it a "comic-book broker" for offering poor information and limited functionality. Taxes also matter: having a broker with a branch in Spain, such as XTB, saves headaches with the Modelo 720 (Spain's foreign asset reporting form) and wealth declarations.
The dilemma of spreading yourself thin
Some investors keep inactive accounts just to hold on to a Spanish IBAN and sidestep the 720 reporting requirement, a rule that affects foreign brokers such as Interactive Brokers (Ireland) or Degiro (Netherlands). Others, by contrast, concentrate everything with a single firm, such as ClickTrade, which has served them for ten years without a hitch. The decision depends on your capital: those with little see no point in diversifying intermediaries.
It is striking how easily many people open new accounts: "I'm going to open quite a few more to get to know them and compare", one participant admits. This almost collector-like behaviour clashes with the traditional loyalty to a single bank. It reflects an ecosystem where customers seek the best product for every need, with no strings attached.
The recurring complaint: usability versus taxes
User experience makes all the difference. Interactive Brokers is "wonderful" according to its fans, but the learning curve is steep even for those who read the manuals. Trade Republic wins on express onboarding but loses on data: US share prices in euros, daily gains that don't reflect the real cost of investing… Details that, added up, drive the average investor to despair.
Against this, traditional brokers such as BBVA or ClickTrade offer solidity but with higher fees. XTB, based in Spain, emerges as a middle ground: tax convenience and acceptable functionality.
In this fragmented market, every investor builds their own combination. The legions of small savers no longer settle for a single broker: they want the best of each one, even if that means managing four passwords and juggling Spanish tax authority (Hacienda) forms.
Also available in: Deutsch
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (31 replies).
More summaries
-
Retail investing fever reaches the uninitiated: an October top warning?
The S&P 500 has risen for three and a half years straight and newcomers are entering the stock market through apps. A sign of a top? October tops most predictions.
-
Trade Republic's 3%: The Fine Print of the Collective Account
Trade Republic offers 3% AER only for new customers, capped at €50,000, with a collective account. Bankinter, Openbank, and Santander are countering.
-
Lamas Bolaño charges 1,200 euros for gold but refuses buyback
A buyer paid 1,200 euros for a gold coin at Lamas Bolaño, but the Spanish dealer refuses to buy it back, citing mint pricing.
-
Wheat up 50% from lows as diesel threatens the harvest
Wheat has climbed nearly 50% from its floor, and rising diesel prices threaten the next harvest, with talk of a return to 2022 highs.
-
Bank lifetime annuity at 3%: 33 years to recoup €40,000
€40,000 at 3% takes 33 years to pay back, and fees leave the lifetime annuity at a net 2%, less than a Spanish Treasury bill.
-
Anti-bump lock cylinders: "the lock is only a deterrent"
A debate on KABA, TESA TK100 and Winkhaus blueChip cylinders: some argue that if burglars want to get in, they will come through the wall or another weak point.