Degiro challenges UK pricing model offering commission free ETF trading
Low-cost online European broker, Degiro which launched in the UK last summer is offering partially commission-free trading on more than 700 ETFs for all transactions placed within the first month of account activation. Subsequent trades worth €1,000 or more will also be free of charge. According to Gijs Nagel, a director at Degiro, the firm can compete aggressively on price due to its lean fintech focused model.
Investor appetite for exchange traded funds (ETFs) has exploded in recent years, with assets listed globally in ETFs breaking through the $3 trillion (£2.1 trillion) mark in March. The popularity of ETFs has partly been driven by their very low fees, which are less than 0.5 per cent in many cases. But one area that can add costs for ETF investors is transaction fees, especially as, unlike unit trusts and open-ended investment companies (Oeics), ETFs can be bought and sold throughout the trading day.

However, the UK market could be set for a shake-up with the news that ultra low-cost broker Degiro has launched partially commission-free trading on more than 700 ETFs. Degiro's offer will only apply to the first transaction clients place in a month, but they will be able to purchase as many ETFs as they like within that transaction. Investors will also be able to trade ETFs for free for any transaction above €1,000 (£774.70).

The Dutch broker, which launched in the UK last summer, has already had a big impact on the market through offering the cheapest share dealing rates available.