In short: An online broker is a regulated financial intermediary that gives investors access to securities exchanges. The broker executes buy and sell orders for stocks and ETFs, maintains separate legal custody of investment holdings, facilitates recurring savings plans, exchanges foreign currencies, and provides annual tax and portfolio statements.
Think of a broker as a folder. Each task in this article is a sheet you pull out of that folder: what the company does with your money and your investments, and what each task costs along the way.
How does a broker hold your investments (custody)?
When you buy an ETF through a broker, the units are not sent to you. They are held in an account with the broker, kept separate from the broker’s own assets. This holding of your investments is often called custody. The broker keeps your units in that account and makes sure they are there when you want to sell. Some brokers charge a custody fee or an inactivity fee for this. You can see which ones in the broker list.
How does a broker place your orders on an exchange?
Retail investors do not trade on an exchange directly. The broker sends your order to the exchange for you. There are order types to choose from, and the common ones are the market order and the limit order. A market order buys now, at the best available price at that moment. A limit order buys only at the price you set or better; if the price is not reached, the order waits. Every order has costs: transaction costs and the spread.
How do automated ETF savings plans work?
A savings plan invests a fixed amount at fixed moments, for example every month. This is also called regular investing. You set the amount and the moment, and the plan buys for you each time. With small monthly amounts, a fixed fee weighs heavily on every purchase: the fee stays the same, while the amount you invest is small. That is why the cost of a savings plan matters when you start small. Whether a savings plan exists and what it costs differs per broker.
How does foreign currency exchange work with a broker?
When you buy a fund in a currency other than the currency of your account, the broker exchanges the money for you. The account and the fund are priced in different currencies, so money has to be exchanged before the purchase. That exchange has costs, and brokers often charge a percentage of the amount. These are called currency costs. They play a part every time the currency of your purchase differs from the currency of your account.
How do deposits and withdrawals work?
Deposits and withdrawals go through your bank account. When you want to invest, money moves from your bank account to the broker; when you sell, it moves back. The methods that are available and any fees for moving money differ per broker.
What tax and portfolio reports does a broker provide?
The broker gives you statements and transaction overviews, so you can see what happened with your account. You can check your purchases, your sales and the value of your investments. Many brokers also produce an annual overview you can use for your tax return. What to enter in that return is for you or an adviser to decide.
How are your assets protected if a broker fails?
If a broker fails, three layers can protect what you have. They are separate, so your cash and your investments can fall under different rules.
- Your investments are kept apart. Investment firms must keep their clients’ securities and money separate from their own assets, under supervision of the AFM. If the broker goes bankrupt, your ETF units are meant to stay outside its estate (DNB, investor compensation).
- Investor compensation, up to €20,000. If a broker cannot return your securities or money, for example after fraud or bad administration followed by bankruptcy, the investor compensation scheme can pay up to €20,000 per investor, €40,000 for a joint account. It does not cover losses from falling prices (DNB).
- Deposit guarantee for cash, up to €100,000. Cash held at a bank is protected up to €100,000 per person, per bank. Investment products such as shares and ETFs are not deposits and are not covered by it (DNB, deposit guarantee).
These amounts are the Dutch schemes, checked on 19 October 2026. A broker licensed in another EU country, including its Dutch branch, usually falls under that country’s scheme; European rules set at least €20,000 for investor compensation everywhere in the EEA. You can look up a broker’s licence in the AFM registers, and the broker list shows the protection line for each broker as far as we could confirm it.
What does a broker not do, and how do you compare?
Most online brokers only execute your orders. This is often called execution only. The broker places the order you give, but it does not decide which ETF is right for you. Which fund fits your situation is your own choice. Stazora works the same way: we give explanation, not personal advice.
To compare brokers, look at these tasks side by side and see what each costs. How a broker works walks through a fee list with worked euro examples, and the broker list shows the providers, how the list is put together and when we last checked it. We currently receive no compensation from these providers.
This is general information, not tax or investment advice. For your own situation, consult a qualified tax adviser, a financial adviser licensed by the AFM (the Dutch financial markets authority) or the Belastingdienst.