scalable capital Review
Our take: Scalable Capital is a German-based digital investment platform that combines traditional brokerage services with robo-advisory capabilities. It is surfing on the trend for ETF-based savings plans and we view competition in this space as a good development. Scalable’s broker is basically a wrapper around Baader Bank that executes all trades. While this may be acceptable for small investors, we find that there is a clear conflict of interest in that most of Baader Bank’s trades are executed on Gettex – an exchange where the Bank is the sole market maker.
Our assessment: Scalable scores 3.5 in its category driven by the reliance on PFOF and limited access to other exchanges. The only lit exchange (Xetra) is expensive to trade on. It also lacks sophistication for intermediate and advanced investors. On an absolute basis, the business model also raises questions given the upcoming ban on PFOF in the EU.
- Passive Investors: Scalable Capital offers a platform for ETF investors focused on building long-term portfolios with unlimited free regular savings plan trades. However, the limitation of these trades to the Gettex exchange may affect the effective cost of products for retail investors. Savvy individuals might also be dissatisfied with the lack of tax-efficient wrappers.
- Semi-Active Investors: may find the choice of exchanges very restrictive and the cost of trading on Xetra high. Although the trading interface strikes a balance between functionality and usability, some might consider it too basic compared to traditional brokers.
- Advanced Investors: Advanced traders might find Scalable Capital’s offering somewhat limiting. The platform lacks sophisticated charting tools and advanced order types that experienced traders typically require. Limited direct access to US markets could be a significant drawback for those seeking global diversification. The absence of derivatives, options, and other complex instruments means professional traders may need to look elsewhere or maintain multiple brokerage relationships.
Pros & Cons and suitability
Pros & Cons
- Commission-free ETF and stock trading
- No custody fees
- BaFin regulation
- Limited Stock Exchange Availability
- Time-consuming account opening process
- Strong Reliance on PFOF
- No tax advantaged accounts
Suitability
Suitable
Good Choice of ETFs BUT CAREFUL WITH LARGE TRADES
somewhat Suitable
Limited Choice of currencies and exchanges
SOMEWHAT suitable
Lack of advanced Features and access to Exchanges
Availability
Scalable Capital is Available In Europe. Check if the broker is available in your country
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Broker Snapshot
Why is Scalable Capital a Tier 2 broker?
Scalable Capital is a Tier 2 broker, characterized by its low-cost positioning and an average customer balance of approximately €33k. It manages €20 billion in assets across 600,000 customers, encompassing both its DIY and Robo-Advisor services. Operating for nearly 10 years, Scalable Capital has shown consistent growth, though its profitability remains undisclosed. The company has a strong presence in Germany and is expanding into other European markets. Like most Tier 2 brokers, it is not publicly listed, rated, or affiliated with a bank. It’s main competitors are neobrokers rather than Tier 1 players like IBKR.
Not Publicly Listed, Not affiliated to a bank But with reputable regulators
Scalable Capital is not a publicly listed company, so its financial details are less transparent compared to other brokers reviewed. It is not affiliated with a bank but is regulated by BaFin and the FCA, though it no longer offers retail services in the UK. Shareholders include Tencent and BlackRock.
Company Info
| Characteristic | Scalable Capital |
|---|---|
| Inception Date | 🛈 2014 |
| Headquarters | 🛈 Munich, Germany |
| Key Owner | 🛈 Privately Held, Tencent thought to be largest shareholder |
| Bank Affiliated | ❌ No |
| Listed on Stock Exchange | ❌ No |
| Parent Rating | ❌ No |
| Operating Profit (2023) | 🛈 Not Publicly Disclosed |
Regulation
| Feature | Scalable Capital |
|---|---|
| EU Entity | 🛈 Scalable Capital GmbH |
| UK Entity | 🛈 Scalable Capital Ltd |
| Key Regulators | ✅ BaFin, FCA |
| EU Regulator | BaFin |
| UK Regulator | FCA |
| EU Guarantee | €20,000 |
| UK Guarantee | 🛈 N/A |
Good Offering but reliance on Single Market Maker Exchange
Scalable Capital provides discounted fees for trading on Gettex, making it potentially heavily reliant on external PFOF revenues. The only alternative is Xetra with no other exchanges supported. Multicurrency accounts are not offered.
Features
| Feature | Scalable Capital |
|---|---|
| Key Base Currencies | EUR |
| ETF Availability | ✅ Very High (2,000+) |
| Multicurrency | ❌ EUR only |
| Cash Interest | ❌ No |
| Margin Loans | ❌ No |
| Exchanges | ✅ Xetra and Gettex |
| Security Transfer | ✅ Yes |
| External PFOF Reliance | ⚠️ Medium to High |
Fee Structure
| Feature | Scalable Capital |
|---|---|
| Custody Fees | ✅ None |
| Inactivity Fees | ✅ None |
| ETFs Dealing Fees | ⚠️ None (Gettex only) |
| FX Fees | ⚠️ 0.99% |
| Deposit Fees | ✅ None |
| Withdrawal Fees | ✅ None |
| Security Lending | 🛈 Not Available |
I. Company
Founded in 2014, Scalable Capital is a private company that lacks transparency regarding its profitability, ownership, and primary income streams. While it is regulated by BaFin, a strong authority, the level of investor protection is relatively low, consistent with German regulations. While it had some funding from reputable investors like Tencent or BlackRock, its heavy reliance on PFOF raises concerns about future profitability, given the impending EU ban on the practice.
Business Profile
Scalable Capital, founded in 2014 and headquartered in Munich, Germany, is a modern digital investment platform with a strong presence in multiple EU markets. Its revenue streams include management fees, performance fees, subscription fees, referral fees, and interest income, though the specific contribution of each is not publicly disclosed. Significant part of orders are routed through the Gettex exchange in exchange for Payment for Order Flow (PFOF), but the exact proportion of revenue from PFOF is unspecified. With the EU set to ban PFOF in 2026, this model may face challenges.
The company’s robo-advisor service provides automated investment management tailored to individual risk profiles, using algorithms to build and rebalance ETF-based portfolios. Clients pay a 0.75% annual management fee, which includes portfolio management, account maintenance, and custodial services. This review focuses on the DIY offering rather than the robo-advisor service.
Ownership and Transparency
The company maintains a private ownership structure and therefore doesn’t publish as much information as publicly listed brokers. It has significant backing from notable investors:
- Founded by former Goldman Sachs and TUM professionals.
- Received investment from BlackRock (World’s largest asset manager).
- Backed by Tencent and other institutional investors.
Safety Considerations
The company is not public, nor rated. It is not possible to proxy its default risk. As the firm is private, they have not explicitly stated whether they are profitable. They raised a €60 million series E round in 2023.
Regulation & Investor Compensation Schemes
Scalable Capital is regulated by the German Federal Financial Supervisory Authority (BaFin) and provides investors with a protection amount up to €20,000. Specifically, the scheme covers up to 90% of an investor’s claims, with a maximum limit of €20,000 per investor. This level of protection – while standard among most EU brokers – is considered low. Cash held at Scalable Capital is protected by the German Compensation Scheme up to €100,000, though it is pooled unless held in your name. Scalable Capital GmbH is assigned to the German Compensatory Fund of Securities Trading Companies which can can pay compensation if an institution is no longer able to fulfil its “liabilities from securities transactions” towards its clients for reasons directly related to its financial situation (and the German Federal Financial Supervisory Authority BaFin has determined the case for compensation).
Share & Cash Custodians
Client assets are held with:
- Baader Bank AG (DIY aka Broker Clients)
- ING Germany (Wealth Management Clients)
- Assets segregated from operational funds
Reputation
Scalable Capital has faced reputational challenges, including a 2021 data breach exposing client information, withdrawal from the UK market in early 2021, and technical issues during market volatility in August 2024, causing account access disruptions. These incidents have raised concerns among some clients despite its regulatory standing.
II. Fee structure
Scalable Capital generally provides low explicit trading commissions on the Gettex exchange, but trading on Xetra is comparatively expensive. The platform does not support trading in currencies other than euros. Based on NCA research on PFOF, small trades can be assumed to be executed in line with other exchanges, however trades above €500 may be routed in a way lacking transparency on total execution cost.
Platform fees
Scalable Capital’s Basic plan has no platform fees.
The Prime+ plan costs €4.99 per month and offers benefits such as interest on cash balances, discounts on one-off trade fees, and access to advanced analytics tools not available in the Basic version.
Trading Commisions
- Regular Investing Trades: unlimited and free but always executed on Gettex
- Xetra Trades: €3.99 plus a trading venue fee of 0.01%, minimum €1.50.
- Gettex Trades:
- Basic (Free) Plan: €0.99
- Prime + Plan:
- Prime ETFs & Stock above €250, free;
- Otherwise €0.99 per transaction.
Overall Fee Simulation vs Competitors
Most of our readers have simple Index portfolios. Using our Broker Total cost calculator, you can estimate the total cost of holding ETFs throughout the investment period. For our simulated scenarios, Scalable Capital comes out as very competitive but just if you use the Gettex exchange and this is misleading.
⚠️ SINGLE MARKET MAKER RELIANCE
The below simulation only takes into account direct visible commissions. As a customer you also face less visible costs including spreads. Scalable directs all their broker ETF trades to Baader Bank. This Bank is the sole market maker on Gettex where it executes most of its trades for Scalable and other customers. Bankeronwheels.com sees this as a clear conflict of interest. Single market maker exchanges are opaque and according to numerous NCAs in Europe have worse execution (spreads) as compared to traditional exchanges like Xetra, particularly for trades above €500. While Scalable also offers Xetra as an alternative the commission is much higher (€3.99+€1.5) and users are typically directed to choose Gettex. Read more about our research on this 👉🏻
Fee Simulation For General Accounts
The simulation shows a cost of €0 for both Trading 212 and Scalable Capital. However, Trading 212 applies this cost across all exchanges and transaction types, while Scalable Capital’s €0 cost applies only to regular transactions on the Gettex exchange. Degiro is the most expensive option, with a total cost of €684.
Investor assumptions
| Model Feature | Assumption |
|---|---|
| Investor | European |
| Instrument | ETF |
| Account | International |
| Initial Investment | € 100,000 |
| Monthly | € 1,000 |
| Time Horizon | 20 years |
| Gross Return | 8% |
Total Fees
Currency Exchange fees
0.99% for non-EUR transactions (trading only done in EUR)
Other fees
Deposits and withdrawal are free of charge but there is 0.99% deposit fee on deposits made through instant up to €5,000.
Crypto trades incur a spread surcharge of 0.99% for the “Free” plan and 0.69% for “Prime+”. per trade for both plans.
III. Platform & Features
Scalable Capital provides attractive features for investors, such as a wide selection of ETFs and regular savings plans. However, its business model encourages customers to trade on the Gettex exchange, where PFOF is utilized. Broker trades are executed through Baader Bank AG but provides no details on exchange allocation percentages. Baader Bank – as the only market maker on Gettex – executes most trades through this venue. For us, this is a clear conflict of interest. Cash interest is only available through the paid subscription plan.
Account Opening Process
The digital onboarding process includes:
- Online identity verification;
- Document upload capability;
- Average completion time: 10-15 minutes;
- Immediate account activation upon approval.
account Features
- Large Range of ETFs including Amundi, iShares and Xtrackers;
- Apps for Android and iOS;
- Customer Service: it is available trough mail, phone and chat although it has mixed review indication room for improvement;
- Intuitive Interface including regular, scheduled investment service.
Internalisation and PFOF
Scalable Capital receives Payment for Order Flow (PFOF) when executing trades on the Gettex exchange. Although customers can choose between Xetra and Gettex, Scalable Capital heavily incentivizes the use of Gettex due to its lower fees. Regular savings plans are restricted to Gettex, as outlined in the contractual terms. The broker’s best execution policy states that trades are executed through Baader Bank AG but provides no details on exchange allocation percentages. Baader Bank, the only market maker on Gettex, executes most trades through this venue. For us, this is a clear conflict of interest. The German documentation explicitly favors Gettex for its lower explicit costs, while the English version uses broader language, mentioning only “the cheapest venues.” Scalable Capital’s reliance on PFOF appears significant, which may not benefit investors, especially when trades are above €500.
Cash Interest
A 2.6% interest rate is offered on EUR balances up to €100,000, but it is exclusively available to PRIME members and not included in the free plan. Cash interest is only accessible through the paid subscription.
Advanced Features
Scalable Capital does not offer customers margin loans, CFD’s, options or futures.
Features
| Investment Type | Availability |
|---|---|
| ETFs | ✅ |
| Stocks | ✅ |
| Bonds | ✅ |
| Funds | ✅ |
| Options | ❌ |
| Derivative | ❌ |
| Futures | ❌ |
| CFDs | ❌ |
| Forex | ❌ |
| Crypto | ✅ via ETP only |
| Commodities | ✅ via ETP only |
IV. Taxes
Tax Wrappers
There are no special tax wrappers or tax advantaged accounts available at Scalable capital.
Tax Reporting
There is standardised tax reporting available at Scalable Capital, with the platform providing tax reports specifically for the German tax system. Annual tax statements are provided, however some manual calculations may be required for complex situations or international investors.
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Good Luck and Keep’em* Rolling!
(* Wheels & Dividends)
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