How a broker works
In short: a broker’s fee list is mostly eight items: order fee, spread, currency fee, custody or platform fee, settlement fee, savings plan terms, fractional shares and investor compensation. Each is explained below with a small worked example in euros, followed by one year on two fee lists, so you can see which items matter for the way you buy.
A broker is the company through which you buy and sell ETFs and stocks. Its fee list can look long, but these eight terms make up most of it. Click a card for the explanation, or scroll down to read the full definitions in order.
The eight terms at a glance
The eight terms
Order fee
A fixed amount or a percentage that the broker charges each time you place an order to buy or sell.
Some brokers charge nothing for certain funds or for savings plans and earn from other parts of their fee list instead. If you buy small amounts often, a fixed fee per order weighs more than if you buy larger amounts less often. In euros: a fixed €1 fee is 1% of a €100 order and 0.1% of a €1,000 order.
Spread
At any moment a security has a price at which you can buy and a slightly lower price at which you can sell. The gap is the spread.
You pay it indirectly: it is not a line on your statement, but your purchase starts a little below the price you paid. Funds that trade a lot usually have a smaller spread than funds that are rarely traded. In euros: with a spread of 0.10%, buying €1,000 and selling it again at an unchanged price costs about €1.00.
Currency (FX) fee
If your account is in euros and the fund or stock is priced in another currency, the broker converts the amount and often charges a percentage for it.
A fund priced in euros usually leaves nothing to convert at the broker. The assets inside the fund can be in many currencies; that belongs to the fund, not to the broker. In euros: a 0.25% currency fee on a €1,000 purchase is €2.50, and selling back into euros usually costs the same again.
Custody or platform fee
Some brokers charge a yearly or monthly amount for keeping your investments or for using the platform, either flat or as a percentage of what you hold. Others charge nothing, or only above a certain amount or for certain services.
Over many years a small yearly percentage adds up, in the same way a fund’s ongoing costs do. In euros: 0.25% a year on €10,000 is €25 a year; some fee lists cap such a charge, for example at a fixed amount per exchange.
Settlement fee
After an order is executed, the securities and the money still have to change hands. Some brokers add a small fee for that step, separate from the order fee.
On a fee list it appears under different names, such as handling or settlement costs. Check what a quoted fee per order includes. In euros: an order with no commission but a €1 settlement fee still costs €12 a year if you buy once a month.
Savings plan
A savings plan buys for a fixed amount on a set day each month or week. Many brokers price savings plans differently from single orders: some charge nothing per purchase, some limit which funds can be bought this way, and some set a minimum amount.
Because the amount is fixed, you buy fewer units when the price is high and more when it is low. In euros: twelve purchases of €100 cost €12 in order fees at €1 each, and €0 in a savings plan with no fee per purchase.
Investor compensation scheme
If a broker fails, investors can end up waiting for their securities. An investor compensation scheme can pay out up to a set limit in some cases, for example when a broker cannot return what it holds for you. It does not cover losses from price falls.
By law, brokers must keep clients’ securities apart from their own assets; the scheme is the second layer if that fails. Which scheme applies depends on the country where the broker is licensed, so look it up per broker. In the Netherlands the scheme pays up to €20,000 per investor (DNB, checked 19 October 2026); Brokers explained sets out how it fits with the deposit guarantee.
One year on two fee lists, in euros
Which fee list is cheaper depends on how you buy. Take two made-up fee lists built from fee types that appear on the broker comparison. List A charges €1 per order, also for planned buys, and 0.25% to change currency. List B has free savings plans, €0.99 per single order and 0.75% to change currency.
| Your year | List A | List B |
|---|---|---|
| €100 a month into a euro ETF through a plan, plus one €1,000 buy of a US-dollar stock | €15.50 (0.70% of €2,200) | €8.49 (0.39% of €2,200) |
| €100 a month into a US-dollar stock as single orders | €15.00 | €20.88 |
List B wins for a monthly ETF plan; list A wins as soon as most purchases need a currency change. That is why it helps to write down how you expect to buy before you compare fee lists.
The euro amounts above are examples of fee types that appear on real fee lists. The actual fees per broker, with their source and the date we checked them, are on the broker comparison; how that list is put together is explained there too.
This page explains terms. It is not personal advice and it names no broker; the euro amounts are worked examples, not any broker’s prices.