This article followed a previous one where we covered brokers for British Expats (you can read that here). Judging by the feedback I received at that time the overriding impression I got is that many people were questioning DEGIRO’s safety and security. Essentially, because they hadn’t heard of it before.
Hopefully this week, we’ll relieve some of those concerns.
Regulations
DEGIRO is a Dutch company and as such is regulated in by the Dutch Authority for Financial Markets (AFM) and it is placed under the prudential supervision of the Dutch Central Bank (DNB).
In the UK, Brexit has complicated things just a little but DEGIRO is still regulated by the UK Financial Services Authority (FCA). The official words from the company themselves are repeated below:
“Deemed authorised and regulated by the Financial Conduct Authority. The nature and extent of consumer protections may differ from those for firms based in the UK. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.”
How long have they been operating?
DEGIRO has been operating since 2013.
Financial industry recognition
DEGIRO have picked up a whole host of international awards in their industry (over 65 and counting).
How big?
Since its inception in the Netherlands in 2013 DEGIRO has expanded into 18 European countries including the UK. In addition they have over one million retail clients, which they say makes them one of the largest brokers in Europe.
Investing accounts are available in the following countries:
Netherlands, Italy, France, Austria, Switzerland, Germany, Czech republic, Spain, Portugal, Poland, Greece, Hungary, Denmark, Sweden, United Kingdom, Norway, Finland and Ireland.
Investment protection
They use a separate custodian entity to hold your assets. This means they are completely segregated from the DEGIRO’s own assets. The sole task of the custodian entity is to administer and safeguard your investments.
By law it cannot perform any commercial activities. In the unlikely event that something is to happen to the company themselves, your investments will not be treated as recoverable assets to their creditors, but will remain in the safeguarding of the custodian entity so that you can get them back.
Why invest?
DEGIRO is well known for low costs! Need I say more! You can invest with them without account fees and they have a list of commission free exchange traded funds. (A list and an explanation of applicable conditions can be found here). But even if you want to invest in a product that isn’t on the list, it shouldn’t break the bank.
UK share dealing costs £1.75. And US share dealing is now free.
They have a nice little chart on their site where they compare prices with a few UK competitors like Hargreaves Lansdown, Barclays, Interactive Investors, Halifax and HSBC. According to their fees page you can save 84% when buying shares and 90% when buying ETFs.
In short, DEGIRO would be perfect for investors who want to keep costs low and live in Europe.
Disclaimer: Investing involves risk of loss