It used to be terrible to invest here in Europe.
Brokerages were expensive. Investment choice was poor.
Investing was only for wealthy people.
Today the situation is seemingly much better.
We’ve got tons of cheap options – not just established online brokerages like Interactive Brokers and Saxo, but lots of neo-brokers” like DEGIRO, Revolut, N26, Trade Republic, Trading212, Scalable Capital and more.
They’re great. I use some of these myself.
But there’s one little-discussed danger you need to be aware of.
Before I explain it, let me be clear:
Your investments with licenced brokerage are very safe.
Assets are held separately from the brokerage’s own money.
Even if the company goes bankrupt, your investments belong to you.
Even in the worst case, you should eventually get them back, even if it takes some time.
But here’s the real practical problem many people run into:
Some of these online brokers have grown super fast.
One major online brokerage skyrocketed to 8 million users in just a few years.
Another fintech which offers investing today has 50+ million users.
The question is: How do you scale up customer support that quickly?
Unfortunately, in many cases, you don’t.
Just go to Trustpilot.com and read the negative reviews for these popular online brokerages.
You’ll see story after story about frozen accounts.
People struggling with chatbots, unable to reach a live person.
Now, any financial company can freeze your account if it looks suspicious.
But when you’re dealing with millions of clients, fraud detection is highly automated.
The algorithm can lock your account for no good reason.
And because of customer support shortages?
It can take weeks or months to resolve the issue.
At the end of the day, you should get your money back if you didn’t do anything wrong.
But it can take time. Stress. And be a major pain.
That’s why I don’t put all my eggs in one basket.
I have four main brokerage accounts where I invest.
Some are bigger, more established players.
Some are newer online brokerages.
This way, if one account gets frozen…
I can still access my other investments while I sort out the problem.
The bottom line:
These new brokerages are fantastic for building wealth.
But a little diversification can save you a lot of headaches.
I help busy Europeans become confident passive investors through a practical, step-by-step training program called The Index Masterclass.
Click here to access my free training for European investors.