Choice of brokers in EU

[drcao]

So, after reading the J L Collins series and a couple of books I want to start investing. I did a lot of digging and picked VWRL(Vanguard FTSE All-World) and probably I'll pick a Bond fund soon also. I already made a plan and everything. I want to put around 3k initially and then around 300€ a month.

The problem that I have now is picking a broker. I made an account with Trading212 and seems too easy to be true. I guess I'm missing something?

I'm also looking at DeGiro which seems very similar, and then there's Meesman and Lynx which are kinda different and this is where I have no idea what I'm doing. My concern is since I want to do long term investment, I want to make sure that my investments are safe no matter what happens to the broker, and also there are no hidden fees that I am missing(like for dividends for example).

I live in the Netherlands and I am an EU citizen. I guess that's important information .

Some advice would be greatly appreciated.

Thank you very much for your help!

(EDIT) I contacted trading212 and they confirmed that your assets are not safe if they go out of business. You are insured up to 85k pounds but you don’t get your assets back. That’s a no no.

 

[ella72]

@drcao Why not invest in VWCE if you’re Dutch?

Yeah, I also don’t like the fact that you can’t transfer funds to another broker with Trading212. Otherwise their fee less system is attractive.

 

[resjudicata]

@ella72 There is no difference between VWCE and VWRL for the Netherlands in term of tax. In both cases you pay 15% dividends since it's Ireland domiciled.

 

[drcao]

@ella72 You’re right! VWCE is better! Thanks for the suggestion. What does accumulating mean?

Yeah, I’m not gonna use trading212 because I plan long term and the 85k insurance seems way too low . Otherwise I like their platform. Stable and reliable.

 

[ella72]

@drcao Don’t want to sound like a jerk but I think you should research a bit more before investing. Try to research different ETFs and what type of fund (accumulating, distributing) is better for your taxes etc.

 

[drcao]

@ella72 No worries!
I did read a lot on it( books and blogs). I just don’t know everything. And of course, I wouldn’t invest without being 100% sure. Right now I know I want a Vanguard all world index fund and one for all world bonds fun in an 80/20 distribution. I know I’ll do monthly payments and I’ll redistribute every year to maintain the ratio.
I didn’t pick exactly which ones because I need to find a reliable broker and see what they have and take it from there.

I would guess, just for fun, that distributing is sending dividends and accumulating is reinvesting them. Just a guess though. I’ll read about it anyway

 

[mystery9]

@drcao "Are my funds protected?

Yes, up to £85,000 by the FSCS.

Where is my equity?

When you invest with Trading 212, your equity is held in custody at Interactive Brokers. They are the biggest broker in the world by the number of daily trades. They hold $160B in client assets.

Where is my cash?

Your money is held at Barclays Bank in a segregated account which means that we can’t touch it."

https://community.trading212.com/t/long-term-investing-reassurance-hopefully/2159/5

 

[drcao]

@mystery9 Yes! Exactly what I needed! Thank you very much!
They should do a better job of explaning this on their website.

 

[wiccankid]

@mystery9 Why is this information not given on their website, but only on a simple and informal forum upon request?

I don't find it trustworthy when relevant piece of information is not clearly stated in legally binding documents; is it?

 

[mystery9]

@wiccankid

clearly stated in legally binding documents

https://www.trading212.com/en/client-agreement-st

Where does your current broker hold your equity? And how much cash is insured?

 

[mystery9]

@drcao I think you misunderstood Trading 212. The assets (stocks, ETFs, etc.) are yours no matter what, but cash is only insured up £85,000.

That is how all brokers work. In the case of Trading 212 the assets (securities) are held in custody with Interactive Brokers and cash with Barclays.

 

[drcao]

@mystery9 Just had a chat with someone from support and confirmed that if they go bankrupt, all your assets are sold and you get money back, up to 85k. That’s exactly what they said.
If they are worth more, you just lose that.

 

[mystery9]

@drcao Read up on this instead! https://community.trading212.com/t/fscs-protection/2681.

 

[justinwolf]

@drcao So what did you decide on? I started investing recently, I've using eToro now, but they don't have some ETF's which I had interest in, therefore, I am thinking about switching in the future. I'm from Latvia

 

[drcao]

@justinwolf I ended up staying with Trading212. Got a lot of good info on how my equity and funds are safe. Feel
pretty comfortable now with it.