Neobrokers in Germany

A neobroker is a securities broker that lives in a smartphone app. Customers buy shares, ETFs, funds and bonds, and at some providers crypto assets, for a low flat fee per order or a monthly subscription. There are no branches and no personal advice: the customer decides and the app executes. In German the word is simply Neobroker, and most people open their first account for an ETF savings plan (Sparplan) of a few euros a month.

The line to a classic online broker such as comdirect is the price model and the order routing. An online broker lets the customer pick among many exchanges, Xetra included, and charges fees that cover the exchange costs. A neobroker sends most orders to one or two partner venues where a market maker quotes the price. For years that partner paid the broker for the order flow, which kept order fees low.

Trade Republic, based in Berlin, holds a full banking license from the European Central Bank. In a press release on its secondary share sale it reports more than 10 million customers in Europe with €150 billion in assets, 70 percent of them first-time investors. Scalable Capital, based in Munich with offices in Berlin, Vienna and Milan, lists more than one million clients and more than €60 billion in client assets in its company factsheet. Two thirds of those assets sit in ETFs, and most clients are between 27 and 34. Its bank, Scalable Capital Bank GmbH, is a credit institution under section 32 of the German Banking Act (KWG) and is supervised by BaFin.

The yardstick in Frankfurt is flatexDEGIRO, an online broker with 3.5 million customer accounts in 16 countries. It passed €100 billion in customer securities under custody and executes more than 75 million transactions a year on around 50 exchanges. Its CEO Oliver Behrens is also president of Frankfurt Main Finance, the association of the Frankfurt financial center.

The trades from these apps land on a small group of German venues. LS Exchange is an electronic trading system at the Hamburg Stock Exchange, run by BÖAG Börsen AG with Lang & Schwarz TradeCenter handling the technology. gettex belongs to Bayerische Börse in Munich, with Baader Bank as market maker. Both trade on weekdays from 7:30 a.m. to 11 p.m., so an app user can still buy a US stock after dinner.

A neobroker in Germany is a bank or an investment firm licensed and supervised by BaFin. The investor protection rules of MiFID II apply in the app just as at a branch, from cost disclosure to best execution. A neobroker that sells bitcoin or other crypto assets also needs a license under the EU crypto regulation MiCA.

Payment for order flow (PFOF) is the fee a market maker pays a broker for sending it customer orders. The EU banned it in its review of MiFIR, Regulation (EU) 2024/791, and Germany was the one member state that kept a transition period, which ended on June 30. In a supervisory statement with dos and don'ts for neobrokers, BaFin says what is still allowed: a broker may act as market maker itself and carry the trading risk, and issuers may pay distribution fees for primary market products as long as the fee does not depend on the order route. BaFin rules out detours such as routing payments through client accounts or a group-owned trading venue that charges unusually high fees. A broker that sends all orders to one venue has to prove, and regularly review, that the prices are good for the customer.

With PFOF gone, each neobroker earns its money from order fees, subscriptions, interest on cash, card payments or its own market making. Compare the current price list before you choose: the cheapest app for a monthly ETF savings plan is not always the cheapest for an active trader.

Two protections work at a neobroker exactly as at a branch bank. According to BaFin, securities in the depot remain the customer's property: if the institution fails, the customer can claim them or move the depot to another bank. Cash is covered by statutory deposit protection of up to €100,000 per customer and bank, and investor compensation covers 90 percent of claims from securities business, at most €20,000.

The next contest is for retirement savings. The Bundestag passed the Altersvorsorgedepot, a state-subsidized depot for shares, funds and ETFs that replaces Riester contracts. The state adds 50 percent on the first €360 a year and 25 percent on contributions up to €1,800, at most €540 a year. The Deutsches Aktieninstitut counts 14.1 million people in Germany who own shares, equity funds or ETFs, and one in two people under 40 invests through a savings plan.

Neobroker jobs in Germany are mostly in Berlin and Munich. Trade Republic works from Berlin, Scalable Capital employs more than 800 people across its four offices, and flatexDEGIRO has its headquarters in Frankfurt.

Finance Loop is the meeting place for people who work on retail investing in Germany, Austria and Switzerland: product managers from brokers and wealthtechs, bankers, compliance officers and the people who explain investing online. Its events take place in Frankfurt and also in Munich, Berlin and Hamburg.

Finance Loop is a partner of the FinTech Founder & Investor Evening in Frankfurt, presented by Finteda, the law firm Schalast and the wealth management software company Fincite. It is a network partner of Finfluencer Circle, which brings together people who explain investing and money on social media, and a member of Frankfurt Main Finance. For bitcoin, the one-day masterclass Bitcoin for Investors covers portfolio fit, access routes and custody models. All dates are in the calendar above and on the events page.

A German neobroker is an app-only broker for shares, ETFs and funds, licensed as a bank or investment firm and supervised by BaFin. Trade Republic in Berlin and Scalable Capital in Munich are the two largest. They charge little or nothing per order and are known for ETF savings plans from small monthly amounts.

Both work without branches. An online broker such as comdirect or flatex offers many exchanges, Xetra included, and a wider product range at higher order fees. A neobroker has a simpler app, fewer venues, often only LS Exchange or gettex, and lower prices. The legal protection for the depot is the same.

No. The EU ban on payment for order flow applies in Germany since the national transition period ended on June 30. BaFin's supervisory statement lists which business models remain possible, for example a broker that acts as market maker itself, and which constructions it treats as hidden PFOF.

No single app is best for everyone. Compare the license (bank or investment firm), the trading venues, the savings plan list, the price model after the PFOF ban and the interest on cash. Scalable Capital vs Trade Republic is the most searched comparison: both are German banks, and the differences lie in prices, venues and product range. A robo-advisor, explained in the knowledge hub, is the alternative for people who want the portfolio managed for them.