Flatex broker review

It is already more than 4 months since I have opened a brokerage account with Flatex, and, as I promised at some point, I would like to share my experience with the community. In short, I think it qualifies as a mustachian offer for Switzerland-based investors.

Pros:

  • 0 custody fees for ETFs (0.1% p.a. for individual stocks);
  • 0 brokerage fees for ETFs if buying via a saving plan.
  • Huge amount of ETFs (I see 1352) that are saving plan capable.

Cons:
Nothing really, rather caveats.

  • The account has to be funded in EURO.
    I didn’t explore other possibilities, because I didn’t need to.

  • User interface is in German.
    I opened an account at flatex.de, so it is kind of expected. Upon login, their app was asking if I am a customer of Flatex Germany or Flatex Benelux (I think), but I didn’t explore that as well. I had been starting Video indent twice because of a connection glitch, and once a call center employee was speaking English with me. So probably not a problem at this stage.

  • Negative interest rate on positive account balance starting from 0 Euro!
    No minimum amount, no compensation. But practically the interest is calculated daily and rounded, so if you have less than 200 Euro, you pay nothing. If you want to invest a larger amount at once, you have to swallow this fee of few cents. But this is not a place to store your Euro cash.

Now a bit more details:

Account opening:
Nothing unusual. First you fill lots of forms on the website, then there is a video identification via the app. I even got a welcome letter on paper by post. Don’t know if it was a clandestine way to verify my address, but I don’t think so, because I got another letter after opening an additional account. This, as well as general look and feel of documents generated by Flatex, gave me a strong feeling: “oh yes, this is a German bank”.

Do not delete a code that you got per SMS until you are completely done! You need it to restart the application process.

Like with degiro, you need a reference account in EURO, which you use to transfer money to and from the brokerage account at Flatex. You can use a free YUH Euro account as a reference account for a Flatex account.

Trading:
You can typically trade at Xetra (a normal stock exchange with multiple participants), Tradegate and other small exchanges, many are basically run by market makers. The brokerage fee is 5.9 Euro independently of the order size; fees of the exchange, if any, come on top of it.

There is also a special trading channel called “KAG/Emittent”. With this you basically can subscribe an ETF like one would do it with a mutual fund. You give how many units OR how much money you want to trade. According to the documentation of Flatex, the customers’ orders are gathered in one block order and transferred to a market maker once per day. The market maker (Société Générale) executes order according to “price at the reference exchange” at 16.00. No limit order is possible, and you still pay 5.9 Euro per order.

Saving plans:
Now we are coming to the interesting part. You can open a saving plan for a certain amount of money (minimum 25 Euro) to be regularly invested into a chosen ETF. To buy a certain amount of units seems to be not possible. The choice is huge, I have an impression that almost every European ETF (iShares, Vanguard, Invesco, Lyxor, Xtrackers, Amundi, SPDR, HSBC, UBS) is available.

When a saving plan order is executed, it is transferred to the market maker as in “KAG/Emittent” order and the rest is happening as described above. BUT now it is free, you don’t pay brokerage fees. I also tried to compare execution price with market price and didn’t find a significant mark-up. Of course you pay (half of) the spread, and it might be wider than on exchange, but otherwise there are no fixed fees.

The most frequent execution of a saving plan is monthly, and you can choose 1st or 15th as an execution date. With two saving plans you can invest every half-month.

So it works great if you want to accumulate ETFs. Now some more caveats. If you accumulate ETFs via saving plans, it is quite certain that you will have fractional units. And fractional units you can’t sell on a normal stock exchange and can’t transfer to another provider. You have to sell your position to the market maker and you pay 5.9 Euro for this. It is not a big deal though, and will even motivate to think 10 times before choosing which ETF to buy and to hold on it.

Some nice features:

  • Margin loan (currently 4.9% p.a. in Euro).

  • Multiple custody accounts (up to at least 5) in the same user account, each with own IBAN.
    Great to set up an automatic regular money transfer and investment for your children in a separate investment pot. The custody accounts can be renamed.

Well, that’s it for now. If you have any questions, I will try to answer them.

1 Like

Great review. Why not use Degiro or IB?

How‘s that nice? 4.9% is huge compared to IB

Oops. Should be free with many other German banks/brokers. Certainly is with mine.

I use them both, but I am also exploring other possibilities.

Consider that there was a message sometimes ago quoting an answer from IB IE support saying that they are not allowed to give margin loans to EU customers because they are not a bank. So…

Which I would be glad to hear about. But in all German broker comparisons I typically see some small fee for every execution of a saving plan.

DKB (previous form, functionality now available in the online interface)
Consorsbank
comdirect (according to several threads in their community forum)

Except for promotions, yes.

I’ve been with Flatex before. Don’t know if they had the same offer for ETF investment plans back then (probably not, since it’s been years ago) and didn’t have any major gripe with them. In the end, I didn’t really use the account, so closed it a couple of years ago.

The thing is, I am using the DKB Visa card as an Aktivkunde (no FX fees), so I have a standing order to transfer at least 800 EUR each month to the account.

Since my ETF investment plan executions are typically 400 EUR each or more, and the cost at DKB is 1.50 EUR flat, they don’t bother me. And it’s one less account to manage.

Ok fine, but:
DKB costs 1.5 Euro per execution while buying;
Saving plans at Consors and comdirect are also not free.
Right?

So with Flatex your transaction cost is 5.9 Euro per much rarer sell transaction, with others you already pay much more during the accumulation.

I just edited my previous post.

I’m banking with DKB anyway and while their IT and online banking (still) seem a bit dated, I have had very good experiences with their customer service and trust them more than anyone else.

comdirect don’t even know how to put proper wording in their price lists that fully complies with EU regulation, and Consors was a bit ‘meh’ as well. Flatex…? No idea, didn’t need to use it, I think (it’s not a bank that provides payment accounts/cards).

EDIT: Sorry, I didn’t mean to stray away from the original subject so much, since this is about Flatex, really. If one only wants to have decent and securities account for ETF savings plans in Germany/EU, I’d probably point them to Flatex as well. :slight_smile:

One positive note I remember about Flatex was that I (and they) did have no problems whatsoever in using a non-German reference account. Even years ago, when some other German banks / financial services providers gave me a hard time about it (among them some of the aforementioned).

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