Characteristics of a good online broker
You can already recognise a reputable broker by a few points. But these are not always immediately recognisable. We tell you what you need to look out for in particular.
1. favourable and transparent price structure
Brokers and banks usually advertise their low or simple order fees as well as current promotional securities that you can trade at particularly low prices for a certain period of time. Often, these order fees only apply to buying and selling on German stock exchanges and conceal the additional stock exchange fees or brokerage commissions.
Reputable online brokers do not have to be unrivalled in price. But they must show all possible costs, from custody account management to the issuing of general meeting tickets, transparently and clearly in a price-performance list - and place it easily accessible on their own website. This is the only way you can really assess what costs you will actually incur for your trading behaviour.
2. large selection of securities and stock exchanges
Although "the more the merrier" does not apply, a large selection of tradable markets and asset classes enables beginners and professional traders alike to trade securities particularly flexibly and to create a broadly diversified portfolio.
In the end, the focus of the individual provider decides how good its offer really is. Neobrokers in particular concentrate on a few issuers such as HSBC or Vanguard. Others exclude CFDs in exness forex broker and other leveraged products completely, which makes trading commodities and foreign exchange alongside index funds virtually impossible. The trading opportunities you actually have depend on the affiliated domestic and foreign exchanges.
3. free sample account / fully-fledged demo account
Well-equipped online brokers provide their customers with a sample custody account or a demo account for an unlimited period of time via online banking. This is the only way to discover all trading possibilities completely risk-free, to develop new strategies, to test unknown stocks or to develop a first feeling for online trading.
4. various software solutions for market access
For most investors, access to the online securities account via the browser and via a trading app is sufficient. However, these must contain the most important functions and be easy to use.
Good brokers manage the balancing act between intuitive design and functionality. The larger and more complex the trading offer, the more important a professional software solution becomes for direct marketplace access and with considerably more analysis and order tools.
5. large knowledge area with community
The exchange with other traders not only improves one's own expertise, but can also show all interested parties new investment strategies. A good online broker supports this exchange either with its own - and actively moderated - forum or with comment functions.
In an additional knowledge area, all functions of brokerage and general securities trading should be explained in an understandable way. Further knowledge offers such as regular expert analyses and webinars additionally support active private investors.
6. friendly and competent customer support
The perfect and problem-free online broker does not exist, every investor seeks advice from an employee via e-mail or hotline at some point. It is not enough that the support is available via several channels (mail, telephone, live chat) and at best 24 hours a day, 7 days a week - it must also be able to solve problems successfully. It needs well-trained employees who can correctly recognise problems, assess them and forward them to the responsible departments.
You can find out directly from rating portals such as Trustpilot or from forums and your circle of acquaintances how good the support is at an online broker.
7. hardly any system failures
There are always technical difficulties: new systems are implemented and servers are maintained at intervals, but a back-end system also has to endure malfunctions and hacker attacks.
Reputable internet brokers communicate these problems transparently and can solve them with a competent IT team within a few minutes or hours. Besides customer reports, especially trade journal articles and even Wikipedia entries give a good insight into past IT stability.