TRADING 212 REVIEW
Our take: Trading 212 is Tier 2 broker offering a diverse selection of products with highly competitive fees. It has established a partnership with Interactive Brokers to facilitate exchange access and custody services. Notably, unlike some competitors, Trading 212 makes securities lending optional, which we appreciate.
Assessment: The overall score for Trading 212 is 3.7, influenced by traits typical of Tier 2 firms such as lower transparency. Investors should be mindful of the investment protection scheme limits, given that the firm is regulated in Cyprus. However, within its specific category, Trading 212 scores a much higher 4.1. That’s because for Tier 2 Brokers our methodology gives more weight to low fees, which is why clients typically go for Tier 2 Brokers.
- Passive Investors – Good user interface combined with a wide range of ETFs and low fees. Those running simple portfolios will find it straightforward to set up and manage accounts and automate investments at low cost.
- Semi-active Investors – With foreign exchanges and low FX fees, investors adding sector tilts to their portfolios have their bases covered. However, the lack of tax wrappers can be a limitation for many.
- Advanced Investors – Trading 212 provides access to payable security lending but doesn’t offer margin loans, bonds, derivatives or US ETFs limiting the possibility to create a more advanced banker portfolio.
This article contains affiliate links. We provide full transparency on how it works.
Pros & Cons and suitability
Pros & Cons
- Cheap and great choice of ETFs
- Beginner Friendly Interface
- Security Lending is Optional
- Cash Remuneration is Very competitive
- Very profitable but mainly due to CFDs
- Incomplete Security Transfer Feature
- Omission of Key Insurance Policy Details
- Tier 2 Regulator in the EU
- No Margin Loans, Bonds or U.S. ETF Access
Suitability
Suitable
Cheap, user-friendly, good ETF coverage
Suitable
good market access, MULTICURRENCY, SECURITY LENDING OPT IN REVENUE.
Somewhat suitable
No Margin loans, BONDS, US ETFs, Derivatives.
Availability Checker
Check if the broker is available in your country
Broker Snapshot
Why Is Trading 212 A Tier 2 Broker?
Trading 212 is a typical Tier 2 Broker given the low-cost positioning and average customer balance of around €1.5k. It administers €4 billion in assets across 2.5 million customers. With nearly 20 years in operation, Trading 212 has remained profitable throughout largely due to its CFD business. It boasts a strong presence in the UK and is expanding into several European markets. As most Tier 2 players, it is not publicly listed, rated, or affiliated with any bank.
Very Profitable, but with a tier 2 regulator in the EU
Trading 212 was established in 2004 in Bulgaria under the original name Avus Capital and was later incorporated in the UK in 2013, where its headquarters remains today. The primary regulator is the Financial Conduct Authority (FCA) for the UK markets and the Cyprus Securities and Exchange Commission (CySEC) for the EU markets. Legacy EU accounts opened before 2021 remain under FCA supervision. Trading 212’s profitability has increased significantly since 2017, following the launch of the real delivery Stocks & ETFs services (Invest). As most Tier 2 brokers, the company is not rated nor listed, which limits the availability of financial reporting information.
Company Info
| Characteristic | Trading 212 |
|---|---|
| Inception Date | 🛈 2004 |
| Headquarters | 🛈 London, UK |
| Key Owner | 🛈 Ivan Ashminov and Borislav Nedialkov (founders) |
| Bank Affiliated | ❌ No |
| Listed on Stock Exchange | ❌ No |
| Parent Rating | ❌ No |
| Net Income | ✅ £41.1 million (UK 2022) |
Regulation
| Feature | Trading 212 |
|---|---|
| EU Entity | 🛈 Trading 212 Markets Ltd (March 2021) |
| UK Entity | 🛈 Trading 212 UK Ltd |
| Key Regulators | ✅ UK, Cyprus, Australia |
| EU Regulator | ⚠️ CySEC (Cyprus) |
| UK Regulator | ✅ FCA |
| EU Guarantee | 🛈 Max. €20K |
| UK Guarantee | 🛈 Max. £85k (EU accounts before 2021) |
Very Competitive Fees, Optional Security Lending But Security Transfer Feature not fully rolled out
Trading 212 features competitive fees, including no trading commissions, and supports multi-currency accounts with 12 main currencies. This setup allows users to trade without incurring FX fees. Withdrawals are always executed in the main account currency. FX fees are competitive, standing at 0.15%. The platform engages in securities lending, but participation is optional. Users who opt in receive a portion of the generated revenue, though this share varies depending on the securities. Security transfer is currently being rolled out, but not fully available yet.
Features
| Feature | Trading 212 |
|---|---|
| Key Base Currencies | 🛈 All Major Currencies |
| ETF Availability | ✅ Very High |
| Multicurrency | ✅ Yes |
| Cash Interest | ✅ Very High |
| Margin Loans | ❌ Not Available |
| Exchanges | ✅ All Major |
| Security Transfer | ⚠️ Not Fully Rolled Out |
| External PFOF Reliance | ✅ None |
Fee Structure
| Feature | Trading 212 |
|---|---|
| Custody Fees | ✅ None |
| Inactivity Fees | ✅ None |
| ETFs Dealing Fees | ✅ None |
| FX Fees | ✅ Low |
| Deposit Fees | ✅ None |
| Withdrawal Fees | ✅ None |
| Security Lending | ✅ Optional and Revenue Share |
By using the link above, you can get up to $1,000 of IBKR Stock for free.
I. Company
Trading 212 is a profitable business with longer track record than most of its competitors, but mainly due to its CFD business. As unlisted entity, its transparency is relatively low. As with all Tier 2 brokers, especially with a regulator based out of Cyprus, Investors should account for their Investment Protection Schemes. UK customers have higher protection levels. Trading 212 EU entity Insurance of up to €1 million per customer omits key policy details and may be viewed as misleading. We do not give any credit to this policy.
Ownership and Transparency
Trading 212 was founded in Bulgaria in 2004 as Avus Capital and incorporated in the UK in 2013, where its headquarters is still located. However, post Brexit, EU customers are now on-boarded via its European branch in Cyprus. Additionally, they have an office in Bulgaria, although it does not engage in commercial operations, it ensures oversight by the local regulator (FSC). Recently, Trading 212 also opened an office in Australia. The company remains private and is owned by its two Bulgarian founders, Ivan Ashminov and Borislav Nedialkov, with Ivan Ashminov currently serving as the CEO. It is not listed or rated; however, it submits yearly reports for both the UK entity and the Group to UK’s Companies House.
From Bankeronwheels.com
Get Wise The Most Relevant Independent Weekly Insights For Individual Investors In Europe & the UK
Liked the quality of our guides? There is more. Every week we release new guides, tools and compile the best insights from all corners of the web related to investing, early retirement & lifestyle along with exclusive articles, and way more. Probably the best newsletter for Individual Investors in Europe and the UK. Try it. Feel free to unsubscribe at any time.
🎁 In the first email, you can download a FREE comprehensive 2-page checklist to construct & monitor your portfolio and clean up your personal finances.
Business Profile
Trading 212 offers accounts to all residents of the EEA and the UK. However, customers from other countries may have to join a waiting list or might not be allowed. The major market is the UK, where about two-thirds of the revenues are generated. Nevertheless, the company is also consistently growing in continental Europe.
In 2017, Trading 212 launched the UK’s first zero commission share trading service, experiencing significant growth, especially during the boom market in late 2020 and 2021. The Gamestop saga led to a temporary halt in accepting new customers for about six months, though since August 2021, applications from the UK and EU are processed immediately.
Due to Brexit, Trading 212 needed an European office European to continue accepting European investors that were previously managed from the UK office. Therefore in 2021 Trading 212 opened an office in Cyprus that since then it is responsible for European accounts. The company stated to us that they chose Cyprus because they had previously an office there. It is common for CFD providers and betting companies to run operations from Cyprus, and we would view core EU jurisdiction with Tier 1 regulator more positively. Accounts of European residents opened before 2021 continue to be assigned to the UK branch and regulated according to the FCA rules.
Safety Considerations
The company is not public, nor rated. It is not possible to proxy its default risk. It remains a very profitable business as compared to its peers. However, it is very likely that it is the CFD platform that ensures its viability rather than the investment part of the business, which mainly derives revenues from FX fees.
Regulation & Investor Compensation Schemes
- EU Clients – Trading 212 is regulated by the Cyprus Securities and Exchange Commission (CySEC) and provides investors with a protection amount of €20,000. This level of protection – while standard among most EU brokers – is considered low. We view this regulator as Tier 2, compared to Western regulators e.g. the UK, Germany or the Netherlands. Learn more about broker bankruptcy protections.
- UK Accounts & EU accounts created before 2021 – are regulated by the FCA and are protected up to £85,000.
- Additional Insurance – On its homepage, Trading 212 also stipulates an insurance for its European customers to increase the regulatory protection. However, the Company refused to disclose the aggregate cap on the insurance (max insured amount for all clients). After an investigation we found it to be very low at €20 Million. We do not give any credit to this insurance. We think that the homepage advertisement of the policy and staff communication omit key aspects of the policy, and that this should be amended as soon as possible.
Share & Cash Custodians
Your cash is held in multiple major EU/UK banks (including JP Morgan and Barclays). For securities, Trading 212 has partnered with Interactive Brokers for custody.
Reputation
One significant issue that impacted Trading 212’s reputation was its decision to temporarily suspend trading in specific stocks in January 2021, during the increase in trading activity associated with the GameStop and AMC stock frenzy. This decision, similar to those made by other trading platforms at the time, initiated debates among investors regarding platform limitations.
The heavy reliance on Contracts for Difference (CFDs) as a major source of revenue has also been scrutinized due to the complexity and the high risk it poses to retail investors.
We do not view positively the omission of key insurance aspects when communicating with investors on online forums.
II. Fee structure
Trading 212 fees are very competitive since there is no custody and dealing charge. Their FX fees are also very low compared to the market average.
Platform fees
There are no annual account fees or inactivity fees.
Trading Commisions
There are no trading commission fees. We checked spreads on a couple of very popular ETFs and they were in line with the market.
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:
- General Accounts (EU/UK) – Trading 212 is competitive
- ISAs (UK only) – Trading 212 is very competitive
Fee Simulation For General Accounts (EU & UK)
In the below simulation, a 20-year accumulation period broker bill comes out at €0 for Trading 212. One of its competitors, Lightyear, has the same cost, €0 . DEGIRO bills is more expensive although still reasonable with its €684. For UK, the simulation returns almost identical results, £0 cost for Trading 212 and Lightyear and £605 for DEGIRO.
Investor assumptions
| Model Feature | Assumption |
|---|---|
| Investor | EU Country / UK |
| Account | General Investment |
| Instrument | UCITS ETF |
| Initial Investment | € 100,000 / £ 100,000 |
| Monthly | € 1,000 / £ 1,000 |
| Time Horizon | 20 years |
| Gross Return | 8% |
Total Fees
Fee Simulation For ISA (UK only)
In our ISA fees simulation Trading 212 has a £0 bill for 20 years. Freetrade is more expensive with a total cost of £1,198. Dodl from AJBell is much more expensive with a total bills of £13,689.
Investor assumptions
| Model Feature | Assumption |
|---|---|
| Investor | UK |
| Account | ISA |
| Instrument | UCITS ETF |
| Initial Investment | £ 100,000 |
| Monthly | £ 1,000 |
| Time Horizon | 20 years |
| Gross Return | 8% |
Total Fees
Currency Exchange fees
FX fees are at 0.15% for all currencies. In addition, proceeds from dividends and other corporate actions are credited in your primary currency and are exempt from them.
In case you choose a CFD account, FX fees are instead averaged at 0.5% but only on the result of the trade, not on the entire volume as in for the Invest account. We do not recommend CFD activity.
Other fees
Deposits and withdrawal are free of charge. Deposits via Cards, Google Pay, Apple Pay & other are free up to £2,000 cumulative. After that, there is a surcharge of 0.7%. Deposits via bank transfer are always free.
III. Platform & Features
Trading 212 is a beginner-friendly platform that allows investment in a wide range of ETFs, along with major European and US exchanges. Trading 212 has partnered up with Interactive Brokers that takes care of the execution of the trades. We like that security lending is optional. Additionally, the cash in your account earns interest at a competitive rate. However, the security transfer functionality has not been fully rolled out. We may incorporate it into our assessment once this process is completed for all customers.
Account Opening Process
Opening an account is a straightforward and require providing personal information as well as filling out a questionnaire about your financial experience. The next step is verify online your documentation: this part of the process is in general fast, although occasionally may require a few days. Customer service can be accessed via email, live chat, customer centre and social media. Customer feedback on the quality of Trading 212’s customer service varies, with some users reporting satisfactory experiences and others experiencing challenges, particularly during times of high demand or market volatility.
Trading 212 Invest account Features
Trading 212 offers several useful features for Long-Term Investors:
- Multicurrency Accounts – May reduce further the cost for foreign transactions. Trading 212 offers accounts in EUR, USD, GBP, CHF and other 8 European currencies.
- Fractional Shares – Making easier to start building a portfolio even with smaller amounts.
- Standing Orders – automated investing is made easier.
- Stock Exchanges: Trading 212 offers access to key stock exchanges, including LSE, NASDAQ, XETRA, EURONEXT or Borsa Italiana.
- Extended Trading Hours 24/5 – allow to trade anytime of the day during the working week.
- Security Lending: Trading 212 engage in Security Lending, however it offers the possibility to opt out. If you don’t, about 50% of revenue are shared with the investor.
- Share Transfer: as 10th April 2024, Trading 212 is rolling out this functionality. The company stated that the process is 40% complete as of the 23rd of April and expected to be fully completed for all users by the end of April 2024.
Internalisation and PFOF
Trading 212 does not use PFOF or internalise orders.
Cash Interest
Cash interests are remunerated at a very competitive rates. They vary by currency, but as of mid April the rates were:
- EUR 4.2%
- USD 5.1%
- GBP 5.2%
- CHF 1.5%
- CAD 3.5%
Advanced Features
Trading 212 caters to an audience who want to build portfolios out of various equity as well as investors that want to experience some advance products. You won’t find the ability to invest in US based ETFs. Trading 212 doesn’t offer any facility for taking on margin loans and has no derivative contracts like futures and options. However, you can access commodity markets, forex and crypto if you have a CFD account.
Total Fees
| Investment Type | Availability |
|---|---|
| ETFs | ✅ |
| Stocks | ✅ |
| Bonds | ❌ |
| Funds | ❌ |
| Options | ❌ |
| Derivative | ❌ |
| Futures | ❌ |
| CFDs | ✅ |
| Forex | ✅ |
| Crypto | ✅ |
| Commodities | ✅ |
IV. Taxes
Tax Wrappers
Trading 212 started offering ISAs accounts for UK resident. No other tax wrapper is currently available.
Tax Reporting
For those clients who invest outside a tax wrapper in a dealing account, Trading 212 will provide an annual tax summary to help with filing.
Good Luck and Keep’em* Rolling!
(* Wheels & Dividends)
Explain It To A Golden Retriever – A Review Of Global ETFs
HSBC Direct Invest Review – Where ETFs Park, Not Trade – High Fees Alert!
IG Review: Good For Traders, But Investors Might Spin Their Wheels!
Barclays Smart Investor Review: Not A Smart Choice.
Weekend Reading – Can you afford to retire early?
Banker’s Paradise: Two Easy Ways To Fool Investors
HELP US
🙋 Wondering why finding honest Investing Guidance is so difficult? That’s because running an independent website like ours is very hard work. If You Found Value In Our Content And Wish To Support Our Mission To Help Others, Consider:
- 📞 setting up a coaching session
- ☕ Treating us to a coffee
- 🐶 Purchasing Our Official Merchandise
- ❤️ Exploring Other ways to support our growth, both financially and non-financially.
DISCLAIMER
All information found here, including any ideas, opinions, views, predictions expressed or implied herein, are for informational, entertainment or educational purposes only and do not constitute financial advice. Consider the appropriateness of the information having regard to your objectives, financial situation and needs, and seek professional advice where appropriate. Read our full terms and conditions.
