September 21, 2021

“new generation” brokers cut prices

Some 400,000 new shareholders invested in the stock market in 2020, according to the Autorité des marchés financiers (AMF). These savers newly converted to the markets have the choice between opening an account in an online bank or a traditional network, with a specialized “broker” such as Bourse Direct or EasyBourse, and with a “new generation” broker such as Bux, DeGiro , eToro, IG, Trade Republic… “Neobrokers” who break the codes by targeting younger clients on sites relooked with an offbeat tone.

“Some players present investment in the stock market in a fun way: why not, but the gamificationmust not lead to trivializing the risk of capital loss ”, however, warns Claire Castanet, director of relations with savers at the AMF.

The neobrokers focus above all on the execution of orders at low prices: transactions cost only a handful of euros, or even are sometimes free, while they are billed around ten euros by brokers. historical online.

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“Customers are certainly sensitive to prices, but also to the service and the variety of products offered. New entrants do not have as wide an offer as we do and are less concerned with the quality of order execution ”, Judge Catherine Nini, president of Bourse Direct, one of the historical players in the market.

And the free service is… paid. “The” zero brokerage commission “is an illusion: the intermediary is remunerated in one way or another, for example on the difference between the purchase price and the sale price”, specifies Mme Castanet.

“Model investors” and fans

Thus, the Dutch Bux, which works exclusively on a mobile application – and speaks to its 500,000 European users –, offers to place orders without brokerage fees on stocks and ETFs (“exchange-traded funds” or listed index funds), but they are executed when the markets close, while the clients of traditional brokers place their orders in real time to control their entry price.

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Arrived on the French market in January 2021, the German Trade Republic only offers international equities and ETFs, in particular in the form of scheduled investments from 10 euros per fortnight, per month or per quarter. The client therefore invests in fractions of shares.

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