Frankfurt Neo brokers such as Trade Republic, Scalable Capital and Co. have been criticized for months. Again and again they are accused of not acting in the best interests of their customers. But now Trade Republic is defending itself: “We are convinced that we have the best offer for small investors in terms of fees and price quality on the market,” said Christian Hecker, co-founder of the Neobroker, in an interview with Handelsblatt. A new study is now backing this with facts.
With particularly inexpensive securities trading, Neobrokers make it easier for many investors to get started on the stock market. The low fees are also made possible because the brokers receive reimbursements from their trading partners for passing on customer orders – called Payment for Orderflow (PFOF) in technical jargon. There is therefore a fear that orders will go where the highest payment beckons and not where the best prices are.
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