Choosing a broker is an important step when investing. The broker is the intermediary between you and the stock market. In this article, we’re comparing investing through DEGIRO and Bolero, two brokers available to Belgians. We also look at the difficulties of investing through a broker, and see how Curvo solves them. The goal is for you to be able to determine which option works best for you to invest your savings and set you up for success.
Why a broker
For many making their first steps into the world of investing, their bank is the one-stop shop for anything related to finance. Unfortunately, they are likely not your best partner when it comes to investing.
First, they try to sell their expensive actively managed funds to you. In an active fund, the fund managers try to outsmart other investors in search for a higher return. But the European finance regulators found out that the majority of them don't succeed in beating the average. On top of that, the bank charges hefty fees to invest in the fund. Good for the bank, bad for you. You're better off investing through another means.
Through a broker, you gain access to the financial markets, where you can buy stocks, ETFs, bonds and even some more complex products like derivatives. It's more cost-effective than investing in an active fund offered by a bank.
Most banks offer brokerage services. Yet again, it's the most expensive option. Specialised brokers, such as DEGIRO and Bolero, offer a better experience at a cheaper cost.
So let's compare two popular brokers for Belgians: DEGIRO and Bolero. More specifically, we are going to see how they differ on cost, trust, and ease of use.
The founders of DEGIRO were former employees of BinckBank and launched their online trading platform in 2013. It is now part of the German Flatex bank. It has thousands of ETFs and stocks to choose from and it’s one of the brokers on the market that offers the best value.
A first frustration of DEGIRO appears when trying to sign up: they don't have a local degiro.be website. You have to choose either the Netherlands (degiro.nl) or France (degiro.fr) to set up your account.
DEGIRO charges some of the lowest fees on the market. They even have a large selection of free ETFs as part of their “kernselectie” (Dutch for "core selection"). IWDA, a popular ETF offered by iShares, is one of those. Every month, the first transaction of IWDA on the Euronext Amsterdam stock exchange will be free. Subsequent transactions for IWDA that same month will also be free provided:
- the transaction is in the same direction (i.e. buy/sell) as the first transaction
- the value of the transaction is at least €1,000
For ETFs that are not part of the free selection, DEGIRO charges a fee that depends on the stock exchange you buy it on, for instance on Euronext Amsterdam, or XETRA, or Euronext Paris. Also, the fees for accounts opened on degiro.fr tend to be lower than for those opened on degiro.nl.
You can use our broker comparison tool to find out the fee on DEGIRO for different ETFs.
Handling of taxes
DEGIRO provides some comfort to Belgian investors as they handle the Belgian transaction tax (also known as the TOB or “beurstaks” or “taxe boursière”). Every time you buy or sell anything, you have to pay this tax which ranges from 0.12% to 1.32%. DEGIRO makes sure the tax is paid and declared for you.
However, they do not handle the following:
- Tax on dividends (“roerende voorheffing” or “précompte mobilier”). A 30% tax on the dividends you perceive through the shares that you hold. You need to make sure that you calculate and declare them in your yearly tax declaration.
- Tax on capital gains on bond funds (also known as the “Reynders Tax”). There’s a 30% tax on the profits you make when you choose to sell the bonds in your portfolio. Again, DEGIRO pushes the responsibility to you for declaring the right amounts in your tax declaration.
Depending on the makeup of your portfolio, these are important considerations to take in mind when choosing a broker. It's an infrequent but cumbersome administrative task. Not declaring a tax can also be costly for you. We’ve written extensively about taxes Belgian investors should know if you wish to dig deeper into the topic.
Declaration of the DEGIRO account to the Belgian National Bank
As DEGIRO is a foreign broker, you’ll have to declare your foreign account to the Belgian authorities. It’s a simple enough process that you only need to do once, and it takes a couple of minutes.
Issues with the AFM
Throughout its existence, DEGIRO has had numerous run-ins with the AFM, the Dutch regulator for the financial industry. For example, they were fined in 2018 because they did not implement an adequate policy for conducting their business with integrity.
As we’re dealing with our long-term savings, safety and trust is vital.
You can only buy whole shares
A popular investment strategy is euro-cost averaging, where you invest periodically instead of investing large lump sums in one go. You invest at fixed times, for instance every month, regardless of how the markets are performing. Most people are paid monthly, so it makes sense for their investments to follow the same pattern.
Unfortunately you can’t buy fractional shares with DEGIRO. This means you need to buy whole units. Following a euro-cost averaging strategy can then become tedious and expensive.
Let’s take the IWDA ETF as an example again. At the time of writing, it’s sold at €72.70. If you contribute €200 towards your savings, you’re only able to buy 2 whole units for €145.40. The rest of the money is sitting on a cash account not working for you. Due to this, many investors have lots of cash sitting around waiting to be invested.
If you want to learn more on periodic investing, we suggest you read through our article that digs deeper into the topic.
👍 of DEGIRO
- Cheap: they have some of the lowest fees of almost all brokers available to us in Belgium.
- They handle the TOB: this is a large time saver as an investor.
- Large selection of ETFs: they have such a large variety of options available for Belgian investors.
👎 of DEGIRO
- No handling of the dividend tax: you're responsible to declare and pay the tax on dividends.
- No handling of the Reynders tax: you have to declare and pay the Reynders tax yourself.
- Declaration of the foreign account: you have to declare your DEGIRO account to the Belgian National Bank and also on your yearly tax declarations.
- Confusing interface of the app: the app is intimidating to use if you're new to investing as you’ll encounter some technical terminology and features. DEGIRO offers many types of securities: turbos, warrants, stocks, ETFs… And when you place an order, you also have to choose between a market order, a limit order, a stop-loss order, amongst others.
- Issues with the regulator: they've regularly had problems with the Dutch financial authorities (AFM) over the years which doesn’t fill you with confidence.
- No fractional shares: this can be frustrating as you have to purchase whole units of shares. Essentially, we’re leaving money on the side not doing anything.
- Transfer fees: transferring your assets away from DEGIRO to another brokerage costs €10 per position and “external costs” that are unclear.
Launched in 1999, Bolero was one of the first specialised brokers in Belgium. They have a wide range of ETFs and stocks to choose from.
We managed to open up an account with Bolero in less than ten minutes. The first step is to head to bolero.be, choose your language (French or Dutch, there’s no English) and then click on the button to open an account.
Handles all the taxes for you
As Bolero is Belgian, they automatically withhold and declare all relevant taxes for you: the transaction tax (TOB), the dividend tax as well as the Reynders tax.
Owned by KBC
Bolero is owned by Belgium's largest bank, KBC. And as far as know, they've never been in trouble with the FSMA, the Belgian regulator. This provides us with a sense of safety for our assets, especially if we're investing a large chunk of our life savings.
Unfortunately Bolero is one of the most expensive brokers in Belgium. Buying €1,000 worth of IWDA costs €7.50 in fees, and increases as you invest higher amounts. This is a difference with DEGIRO, where it was free. Especially when you invest on a monthly basis through a euro-cost averaging strategy, the costs will have a significant negative impact on your return.
Bolero charges a higher TOB for certain ETFs
Bolero surprised everyone when in July 2021 they increased the Belgian transaction tax of VWCE, a popular ETF among Belgians, to 1.32%. This is much higher than the 0.12% rate that other brokers in Belgium are still charging. They subsequently also raised the TOB tax rate for other ETFs to 1.32%.
It is strange that brokers charge a different tax rate for the same ETF. The reason seems that the law around the Belgian transaction tax is unclear, so brokers interpret it slightly differently. If you want to know the details, feel free to read our resource on the topic.
You can only buy whole shares
Similar to DEGIRO, Bolero does not offer fractional shares. You're forced to buy whole units of shares. Combined with the high fees, it becomes very impractical to invest on a monthly basis when using Bolero. You almost have to resort to consolidating your monthly investments into large and infrequent contributions.
Bolero shows a lot of information on their interface. But it appears very cramped, especially on smaller screens like on mobile. This can be intimidating for new investors, because you may not know what all of this additional information means. You may also not be able to distinguish between important information and less relevant details:
👍 of Bolero
- Handles all Belgian taxes for you: including the dividend tax and the Reynders tax.
- Belgian 🇧🇪: Since it's Belgian, no need to declare your account to the Belgian National Bank.
- Owned by KBC: as it’s one of the largest banks in Belgium, we know that our assets will most likely be safe.
👎 of Bolero
- Price: Bolero is among the most expensive brokers in Belgium. The transaction costs will eat up our returns especially if we’re investing small amounts of money every month or quarter.
- No fractional shares: you have to buy whole shares which means you need to accumulate sufficient savings in order to make it worthwhile for you as an investor.
- Transfer fees: if you wish to transfer your assets away from Bolero to another brokerage, it’s very expensive at €50 per position.
Investing the easier way: Curvo
When you choose a broker, you then have to figure out what to buy, when to buy, understand the tax implications of your decisions, rebalance your investments and make sure they stay in line with your goals and risk tolerance.
We realised the difficulties of investing through brokers like DEGIRO and Bolero. So our approach is different and that's why we created Curvo: we make the right investment decisions for you so you don't have to worry.
The challenges of investing through a broker
There are quite a few challenges when it comes to investing yourself through a broker:
- The allocation of your portfolio is in your hands: figure out how to build the right allocation that meets your long-term goals.
- You need to do your own homework: figuring out how to start and understanding the intricacies of investing in ETFs takes an effort. Yet it's important, because in investing the devil is often in the details.
- It takes time: send money to your broker monthly and then make the purchases.
- Costly for monthly contributions: if you wish to invest on a monthly basis, you’ll have to pay a lot in broker fees. Also, as you buy units and can’t buy fractions, you’ll always be left with cash on your account.
- Learn how to rebalance: if you have multiple funds in your portfolio, how will you rebalance? Quarterly or yearly? How do you decide?
- Keep track of your portfolio: you may have to set up a spreadsheet to stay on top of things!
- Understand taxes: this can be complicated and they also often change.
- Discipline: it requires self-confidence and discipline to stay the course.
- Brokers want you to trade: the majority of brokers make money on you trading so a “passive” approach isn’t in their best interest.
Curvo solves all the complexities of good investing
Brokers push you to trade and to pick individual companies to invest in. Rather than picking individual stocks such as Amazon or Tesla, index funds are a way to buy the whole market, across all sectors and regions of the world. Essentially, you own a small portion of thousands of companies throughout the world. Instead of betting on a particular company, you are placing a bet on the global economy.
Rather than having to pick the right stocks or ETFs among the thousands available through these brokers, with Curvo you invest in a portfolio that is tailored to you and your goals. These portfolios are composed of globally diversified index funds, meaning you earn a piece of the growth of the global economy, and they're best suited to make the most of your savings long term.
We believe that investing is an important tool for our generation to improve our financial well-being and to prepare for our future. We are building Curvo to fulfil that vision, by making good investing easy and accessible to all.
👍 of Curvo
- Diversified portfolio set up for you: the best portfolio for you is built based on your time horizon and financial goals. Simply answer a short questionnaire and you’ll get everything set up for you.
- Automated savings plans: through Curvo’s app you can set up a monthly contribution from €50. That means that money is automatically invested for you in your portfolio. Put everything on autopilot.
- Fractional shares: all the money you send towards your Curvo portfolio is fully invested. No need to leave the cash on the side, everything is invested for you.
- No TOB: significant savings as the Curvo portfolios aren’t liable for the Belgian transaction tax (or "TOB"). This saves you between 0.12 and 1.32% for every time you buy or sell!
- Sustainable investments: Curvo focuses on one guiding principle: we don’t invest in companies that are considered destructive to the planet. This means that sectors like non-renewable energy, vice products, weapons and controversial companies are all excluded.
- Withdraw at any time: there’s no long-term contract or exit fees if you wish to stop investing with Curvo.
- Project yourself into the future: through Curvo you can see how much your portfolio is expected to be worth in the future. You can answer questions like “how will increasing my monthly contribution by €50, €100 or €200 affect my long-term savings?” to give a concrete idea for the “future you”.
- Business model aligned with your goals: brokers want you to trade, yet buy-and-hold works best for most people.
- Partnership with itsme: your data is safe and secure through our partnership with itsme.
👎 of Curvo
- Price: it’s more expensive than investing yourself through for instance DEGIRO. As you pay a yearly fee on your assets, it’s more expensive in the long run than managing the investments yourself.
- You can’t choose what to invest in: Curvo offers you a portfolio of index funds with over 7,500 companies, that's tailored to you. But you can’t select the stocks or particular ETFs that you want to invest in.
- You have to declare your account: As your account is held in the Netherlands, you’ll have to declare your account to the National Bank of Belgium. We provide clear step-by-step instructions to do so. And don’t worry, there’s no extra tax to pay or anything like that.
Comparison of DEGIRO vs Bolero vs Curvo
In this article we highlighted the key differences between DEGIRO and Bolero, two brokers accessible to Belgians. DEGIRO is clearly the most cost-effective way of investing your savings. But cost is not the only factor to take in consideration when you’re putting your savings to work. Although more expensive, Bolero can provide a greater sense of trust and safety for us, Belgians.
We also highlighted the challenges of investing yourself through a broker. We built Curvo to make good investing easy and accessible to all Belgians, and we explained its benefits. Feel free to explore Curvo's app if you wish to learn more.
What you should do now
- Determine if you're more of an active or passive investor. Our comparison can help you.
- Consider if a broker is the right way for you to invest.
- If so, assess if DEGIRO or Bolero suits you better based on the pros and cons we highlighted. You can also compare other brokers with our tool.
- In the other case, discover if Curvo is a fit for you!