Why I think neobrokers are a good thing, yet I do things a bit differently

Five points for people with 30 seconds to spare

1. I consider neobrokers to be a positive development. They have achieved in five years what took me fifteen. Investing in shares has become the norm in Germany.
2. Nevertheless, nobody operates there for free. One major provider reported revenue of around 340 million euros in a financial year, 316 million of which came from commissions.
3. Since 1 July 2026, an important source of income has been banned. Yet order fees are not rising. The cost is simply shifting to areas not shown on the statement.
4. I use the same products. The difference lies not in the ETF, but in the fact that someone understands your situation and answers the phone.
5. On 7 April 2025, that was precisely the difference. When the apps crashed under the strain, nobody in the investment accounts I manage had to sell.

The long version, perfect for one or two cups of coffee.

Let’s start with what I really like

When I started out in this industry fifteen years ago, my job was quite different from what it is today. I had to persuade people to buy shares in the first place.

That sounds absurd today. Back then, it was an everyday occurrence. Since the events of the early 2000s, Germany had been harbouring a deep aversion to shares, and anyone who had a particular Telekom advert stuck in their mind was put off the subject for years. I literally had to beg people to invest at least half of their long-term assets in shares. Over forty years. Using every mathematical argument at my disposal.

That’s the norm these days. Young people set up a savings plan as a matter of course, without anyone having to persuade them to do so.

I do not take credit for this progress. A large part of it is down to the providers, who have made access easy and affordable and have advertised this widely. This is a positive development, and I am the last person to speak ill of it.

Nevertheless, a word of truth is in order

There are people who do not want to pay a service provider. They are absolutely opposed to anyone making money from them in this area. This attitude predates any app, and it is entirely legitimate. I do not try to lecture these people, nor do I chase after them. They are simply not my clients.

What sometimes gets lost in this group is the question of how the provider actually makes a living.

A look at the figures helps. A major German neo-broker reported revenue of around 340 million euros for its financial year from October 2023 to September 2024. 316 million of this was commission income. Net profit for the year stood at 34.8 million.

That’s not a criticism. It’s a successful business, and I’m happy for them. It simply dispels the notion that nobody there pays anything.

What changed on 1 July 2026

A large part of this business was conducted via an arrangement whereby a trading partner paid the broker money to ensure that the client’s order was routed to them. In English, this is known as ‘payment for order flow’. It was the reason why an order could cost one euro or nothing at all.

The European Union has banned this. Germany is the only Member State to have secured a transition period, lasting until 30 June 2026. This will come to an end on 1 July.

The providers have announced that order fees will not rise as a result. I actually believe them. But the revenue has to come from somewhere.

It now comes from the interest margin on deposits, from its own trading desks, from subscription models and from the spread between the bid and ask prices, which widens noticeably outside regular trading hours. One analyst summed this up very aptly: ‘The problem isn’t the fee you see, but the return you don’t get.’

Anyone who has read my two articles on free advice will recognise the pattern immediately. The price never disappears. Only its visibility.

What I specialise in

I use low-cost ETFs, actively managed funds with no front-end load and, as a general rule, whatever the market has to offer. I am not tied to any firm or product range.

On top of that, there’s a fixed price. It’s set from the outset; you know it in advance, and there are no surprises afterwards. Nor is it higher than what is standard on the market; in many cases, it’s lower.

So the difference lies elsewhere. A neo-broker makes its money from volume. The offering is the same for everyone; sometimes there are two or three strategies to choose from, but it is never personalised. This is not a criticism, but a description of a business model that has to work exactly like this.

With me, someone will take a close look at your situation, your income, your family, your time horizon, your risk appetite and the question of what happens if something goes wrong. And afterwards, there’s a person you can ring, ask questions of and book an appointment with.

With a neobroker, you’re just one of ten million. And that’s exactly how you’re treated.

If that’s what you’re looking for, I’m not the right person for you. To be honest, I’m glad this option exists. It saves me from having conversations that would never have led to a working relationship anyway.

7 April 2025

There was a day when the difference became apparent.

In early April 2025, the US government announced a comprehensive package of tariffs. Markets worldwide fell sharply and rapidly. The DAX opened more than ten per cent down on Monday, 7 April.

This morning, the apps of several major providers were overloaded. There were loading delays, error messages and incorrectly displayed account balances. On this day alone, over 8,000 reports of faults were received.

At the time, one provider explicitly clarified that the execution of orders on the stock exchange was not affected, only the display in the app and on the website. This is an important distinction, and it actually makes the point even clearer. Anyone who wanted to buy or sell was unsure whether everything had gone through. And anyone who simply wanted to check the status of their investments was unable to do so.

In the investment accounts I manage, nobody had to sell during this phase. Not because I’m smarter than the market, but because we’d discussed beforehand what would happen if exactly that were to happen.

These tariffs didn’t just appear out of the blue. They were on the agenda during the 2024 election campaign, announced and made public. Nobody could have known exactly when they would be introduced. But it was clear that they would come. This is precisely the sort of thing that can be discussed in advance, and that is exactly what we did.

Anyone who panicked this Monday clearly hadn’t been following the events leading up to it. If you know why your investment account looks the way it does, you won’t be staring at an app all night.

This is a statement about the past, and it is not a promise for the future. The next upheaval is bound to come, and it will look different.

Why the figures still don’t make me nervous

I don’t need a market share. I want 246 out of millions of households.

If five million more people were to open an investment account with a neo-broker tomorrow, it would be of no consequence to this model. They are simply not the sort of people I would work with, and they are not looking for anything I offer.

It doesn’t matter how many there are. What matters is whether those who come to me get what they need.

What you can take away from this

If you want to take control of your own investments, go for it. Seriously. The tools for doing so have never been better or more affordable.

Just ask yourself two questions first. Do you know how your provider makes a living if there’s no charge for the order? And do you know what you’ll do if your investment account is down ten per cent on a Monday morning and the app won’t load?

Most people answer the second question too quickly. We’ve all fancied ourselves as millionaires at some point. On paper, everyone stays calm. When a hundred thousand euros turns into eighty thousand overnight, it’s your money and no longer your problem.

Anyone who can answer both questions doesn’t need me. Anyone who finds themselves pondering the second question should consider whether a point of contact might not be worth the cost after all.

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Sources

• Trade Republic financial figures, financial year October 2023 to September 2024, from the annual accounts in the company register. Reported by Börsen-Zeitung and Handelsblatt.
• On the ban on payment for order flow and the German transition period until 30 June 2026: justETF, BANKINGCLUB, DAS INVESTMENT.
• On the disruptions on 7 April 2025: Finanztip, Stuttgarter Nachrichten. The clarification that trading on the stock exchange was not affected comes from the provider itself.
• The fact that the tariffs were announced during the 2024 US election campaign is publicly documented, including in the overview of the ‘Liberation Day’ tariffs.
• All statements regarding the investment accounts I manage are based on my own experience. They are statements about the past and do not constitute a promise for the future.