40 Shares | 21 April 2016

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FINTECH BROKER: CHANGING THE WAY YOU INVEST

LOW COST-TRADINGMinimized transaction costs have long been one of the underlying principles of finance and now with DEGIRO clients can benefit from the lowest fees in the country. Commission fees can have a substantial impact on returns but

with but fees on average 84% lower than local competitors, you can be sure to maximize your returns with DEGIRO. No matter how often you trade be it daily, weekly, or monthly, these benefits are sure to add up.

Since launching services to UK clients in June of 2015, DEGIRO has seen a large influx of investors using their services. Originally from The Netherlands, DEGIRO began in 2008

by offering services to professional investors before providing services to retail investors in 2013. The firm uses a FinTech approach to minimize operating costs and are able to process a high volume of transactions for a fraction of the cost. A seemingly simple concept but one which has sent shockwaves through the industry.

The firm’s strategy is quite different from traditional UK brokers. Previously, brokers in the country would offer only the primary markets such as the LSE, NASDAQ and NYSE to their clients and offer a wide range of additional and costly services such as financial advisory and portfolio management. DEGIRO takes a different approach. As an execution only broker, the firm focuses its efforts on offering a top notch platform and a service to make trades across a wider number of exchanges. Investors can access a range of 26 different countries across Europe, North America, Asia, and more. RES

21 April 2016 | Shares 41

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PIECES OF A PUZZLE“We see DEGIRO as a puzzle and every piece of the puzzle must be designed as efficient as possible” says Paul Laverty, in charge of Business Development for the UK and Ireland at DEGIRO. “We use the latest technology to automate many processes.” These innovations help to cut costs for both the company and the client. Last year the company’s in house platform was used to carry out 6 million trades making DEGIRO on of the top players in the European brokerage industry.

“An important piece of the puzzle is our order policy.” continues Laverty. While the majority of orders are still executed in the market, clients can choose to place an order which will not be executed unless it can be done so in house. Orders like these cut down on exchange fees and the savings are then passed on to the investor. If an order is matched, the clients split the difference while DEGIRO itself takes nothing additional.

FINANCIAL PROTECTIONInvestments made at DEGIRO are 100% segregated and held within a completely legally separated custodian entity. This party, a trust foundation, performs no commercial or financial activities itself but instead serves as the holder of assets which is completely removed from DEGIRO itself. This structure provides an unparalleled level of safety such that, in the unlikely event that anything should happen to the firm, all client assets would be secured and unable to be treated as recoverable assets.

The firm operates under the regulatory capital supervision of the Dutch Central Bank (DNB) and under the general regulatory scope of The Netherlands Authority for Financial Markets (AFM). The firm is also registered at the Financial Conduct Authority (FCA) in the UK as it operates using a European passport in accordance with the Markets in Financial Instruments Directive (MiFID).

FREE ETF TRADINGStarting on April 19th, DEGIRO will begin offering free investing in more than 700 Exchange Traded Funds (ETFs), says DEGIRO’s Paul Laverty. Commonly known as “trackers”, ETFs are financial products where the value is tied to an underlying asset such as a stock index, commodities basket, oil, gold, foreign currency, etc. With their relative low cost and wide range of investment types these products offer investors simple way to spread their portfolio across a wide range of products. Even

experienced investors can make the mistake of not properly diversifying their portfolio but because of the range of assets and relative affordability, ETFs are an efficient way to avoid this and build a diversified portfolio at a low cost.

“By offering these products free to trade, we hope to help clients avoid this common investor pitfall.” says Paul Laverty. “And with no minimums to purchase, our clients can invest whatever amount they want into any of these products.”

Prior to DEGIRO’s entrance into the market, transactions in the UK came at substantially higher fees. Now investors can trade in UK stocks for only £1.75 + 0.004% per transaction. US products trade at €0.50 + $0.004/share, and now selected ETFs trade free of charge.

Low prices, driven

from technological innovation, has been an important factor for DEGIRO’s success.

Today the company has grown substantially with more than 100,000 clients across 17 countries using the platform to carry out transactions worth in excess of ‎€30 billion.

DEGIRO UK AVERAGE

CHANGE (%)

£1,000 of Tesco Shares £ 1.79 £ 11.47 84%

£5,000 of Google Shares £ 0.42 £ 14.09 97%

£10,000 of FTSE Tracker ETFs FREE £ 12.19 100%

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