EU Broker Fees Glossary (Spreads, FX Markup, Custody & Hidden Costs)

Most investors obsess over “commission-free” and ignore the real leaks: bid-ask spreads, FX markup, platform fees, and execution. This page is the plain-English reference you link from every broker guide.

EU broker fees glossary hero banner showing a grid of fee types charged by European brokers, including trading commissions, currency conversion fees, bid-ask spread, withdrawal and deposit fees, inactivity and maintenance fees, securities lending fees, real-time data fees, and dividend processing fees, illustrated with icons on a desk with coins and charts.

Use this glossary as your “fee decoder.” Then apply it in the pages that matter: cheapest FX, best brokers, and execution rules.

Fast decision

  • If you invest in USD exposure from Europe: FX markup + spread usually matters more than commissions.
  • If you buy UCITS ETFs monthly: execution + spreads + fixed fees decide your real cost.
  • If a broker says “free”: you pay somewhere else (FX, spreads, lending, or behavior).
Cheapest FX guide → Fees really matter → Spreads & limit orders → Compare brokers →

Educational content only. Not personalized investment advice.

TL;DR

  • Spread is a fee (you pay it silently when you buy/sell).
  • FX markup is usually the biggest long-run leak for Europeans buying USD exposure.
  • Fixed fees (custody/platform/inactivity) destroy small accounts and monthly investing.
  • Execution (market vs limit orders, timing, liquidity) often beats “headline commissions.”
  • Securities lending isn’t always bad, but you must know the policy and who keeps the revenue.

QUICK GLOSSARY

Broker fees in Europe: the terms people misunderstand

Use this as a “definition source” when a broker says “commission-free.” Most costs show up as spread, FX markup, or recurring account fees.

Term What it is (plain) Where you feel it
spread Bid/ask gap (you “pay” it when you buy/sell). Worse on illiquid ETFs, open/close, and small listings.
fx-markup Hidden margin in EUR↔USD conversion rate. Every conversion; death-by-1000-cuts on monthly buys.
commission-minimum Minimum fee per trade even if % looks small. Punishes small recurring purchases.
custody-fee Recurring fee for holding assets (or “service”). Silent annual drag, especially on small balances.
securities-landing Broker lends your shares; you get none/some upside. Usually not “a fee,” but a policy worth understanding.
inctivity-fee Fee if you don’t trade / don’t meet activity rules. Hits buy-and-hold investors who barely trade.

Related: Fees really matter · ETF liquidity & spreads · Tracking difference vs TER

Why EU broker fees feel confusing

Brokers split costs into two categories: fees you see (commissions, custody, subscriptions) and fees you feel (spreads, FX markup, bad fills, forced conversions, and “friction” that makes you invest less). Long-term investors should optimize the second category first.

If you only remember one rule: minimize recurring friction + FX leakage, then keep the plan boring.

The fee stack (what can charge you)

EXPLICIT

You see it on a fee page

  • Trading commission
  • Custody / platform fee
  • Inactivity fee
  • Market data subscriptions
  • Deposit/withdrawal fees

IMPLICIT

You pay it in price

  • Bid-ask spread
  • FX markup / conversion spread
  • Bad execution (slippage)
  • Forced conversions
  • Wide spreads on illiquid listings

BEHAVIOR

The “app tax”

  • Overtrading temptation
  • Market orders in thin markets
  • Switching ETFs constantly
  • Holding cash too long

Related: Study: cash drag · Why limit orders matter

Quick calculator: estimate your “silent fees”

1) FX leakage per year

Annual FX cost ≈ (conversion amount) × (FX markup %) × (number of conversions)

Example: €200/month converted with 0.25% FX markup → €200 × 0.0025 × 12 = €6/year (only the conversion friction).

2) Spread cost per trade

Spread cost ≈ trade size × (spread %)

You pay it when you enter (and again when you exit). Illiquid listings can make spreads dominate commissions.

3) Fixed fees (the account-killer)

Annual fixed fees = custody/platform + inactivity + data + subscription tiers

Fixed fees hurt small portfolios and recurring investing far more than percentage-based fees.

If you invest from Europe into USD exposure, start here: Best broker for cheapest FX (Europe → USD).

Glossary (EU broker fee terms)

Term What it means Why it matters How to reduce it
Bid-ask spread The gap between the best buy price (bid) and sell price (ask). It’s a hidden fee paid in price—often larger than commissions on small buys. Trade liquid ETFs, use limit orders, avoid thin hours.
Liquidity How easily you can trade without moving the price. Low liquidity increases spreads and slippage. Prefer major listings and high-volume ETFs.
Slippage Getting a worse fill than expected, often from market orders. Silent performance drag; you won’t see it on a fee table. Use limit orders, avoid open/close spikes.
FX markup The broker’s hidden margin inside the exchange rate. Often the biggest recurring cost for Europeans buying USD exposure. Use brokers with low FX friction; reduce conversions; convert intentionally.
FX conversion fee A stated fee to exchange EUR↔USD (fixed or %). Can stack on top of FX markup. Repeated conversions compound. Fewer conversions; larger batches; avoid forced auto-conversion.
Auto-conversion / forced FX Broker converts for you automatically (often at unfavorable rates). Convenient but can be expensive over time. Prefer multi-currency cash where possible; define an FX rule.
Commission Explicit per-trade fee. Matters most for frequent trading or tiny buys with minimums. Minimize trades; use recurring investing; watch minimum fees.
Minimum commission A floor fee even if the % would be smaller. Destroys small monthly buys if you trade too often. Bundle buys or pick a broker/plan that fits small orders.
Custody fee Fee for holding securities (often % per year or fixed). Compounds as your portfolio grows; hurts “buy-and-hold” permanently. Avoid custody-heavy brokers for long-term investing unless the tradeoff is worth it.
Platform / service fee Recurring account fee or tier fee. Fixed fees are brutal on small accounts. Choose brokers with low fixed overhead for your account size.
Inactivity fee Fee if you don’t trade enough. Penalizes long-term investors who trade rarely. Avoid it, or match the broker to your investing cadence.
Market data fees Subscriptions for live quotes or exchange data. Optional, but can become a recurring leak you don’t need. Use delayed data if acceptable; subscribe only if necessary.
Securities lending Broker lends your shares to short sellers for a fee. Can add counterparty complexity; revenue split varies. Read the policy; opt out if available and you prefer simplicity.
“Commission-free” No explicit commission. Doesn’t mean “free.” Costs can appear as spreads, FX markup, or execution quality. Compare all-in costs for your exact workflow.
Payment for order flow (PFOF) Broker routes orders to be paid for routing. May impact execution quality (depending on structure/regulation). Prefer brokers with strong execution transparency and order controls.
Stamp duty / transaction tax Country-specific tax on certain transactions (e.g., UK shares). Not a broker fee, but hits returns like one. Know instrument-specific taxes; avoid surprises.

If you want the ETF cost layer too: Tracking difference vs TER.

How to use this glossary to compare brokers (5 checks)

  1. List your workflow: deposit currency, ETF currency/listing, monthly vs quarterly buys.
  2. Estimate FX leakage: markup + forced conversions + conversion frequency.
  3. Estimate spread cost: liquidity of the specific UCITS listing you’ll actually buy.
  4. Check fixed fees: custody/platform/inactivity/data tiers (killers for small accounts).
  5. Enforce execution discipline: limit orders when spreads are wide; avoid thin hours.

Apply this directly in: Best broker for UCITS ETFs (Europe) · Best broker for recurring investing (Europe) · Best broker for long-term ETFs (non-US).

FEE STACK

How broker costs actually hit you (3 real flows)

FLOW 1

Monthly buy of a USD asset (from EUR)

  • Deposit (SEPA) → usually free
  • FX markup (main hidden cost)
  • Commission minimum (hurts small buys)
  • Spread (entry + exit)

FLOW 2

Buying a UCITS ETF on the “wrong” listing

  • Same ETF, different exchange/currency
  • Wider spread from low liquidity
  • More slippage if you use market orders
  • Fix: better listing + limit orders

FLOW 3

“Free trading” app broker

  • Commission looks like €0
  • You still pay via spread
  • Often pay via FX markup
  • Behavior cost: overtrading temptation

Educational content only. Not personalized investment advice.

CALCULATOR

Spread Cost Calculator

Turn bid/ask spreads into a real cost for your order. This is the “silent fee” that repeats every time you buy — especially painful for monthly investing and thin UCITS listings.

  • Entry cost: what you lose buying at ask vs mid.
  • Round-trip cost: what you lose buying at ask and selling at bid.
  • Decision: when a limit order matters, and when spreads dominate tiny TER differences.
Open calculator →

Educational content only. Not personalized investment advice.

FAQ

What fees matter most for long-term ETF investors in Europe? +
FX markup, bid-ask spreads, and fixed platform/custody fees usually dominate. Commissions matter mainly when you trade frequently or your broker has minimum fees that punish small buys.
What is FX markup in simple terms? +
It’s the broker’s hidden margin inside the exchange rate. You don’t see it as a “fee,” but you receive a slightly worse EUR↔USD rate than the real market rate.
Is “commission-free” actually free? +
No. The cost often moves to spreads, FX conversion, execution quality, lending revenue, or app-driven overtrading. You compare “all-in cost” for your workflow.
Why do spreads vary so much between UCITS listings? +
Liquidity varies by exchange and listing currency even for the same ETF/ISIN family. Thin listings and off-hours trading typically widen spreads.
When should I use limit orders? +
Use limit orders when spreads look wide, liquidity is thin, or you’re trading near open/close volatility. It’s the simplest way to avoid bad fills.
What is securities lending, and should I care? +
Your broker may lend your shares to others. The risk/benefit depends on the policy, collateral, and who keeps the revenue. Read the broker’s lending disclosure and opt out if you prefer simplicity (when possible).
What’s the fastest way to reduce costs without over-optimizing? +
Reduce FX conversions, buy liquid broad ETFs, avoid fixed fees, and keep the plan boring. Consistency beats micro-optimizations.

Bottom line If you can decode spreads + FX markup + fixed fees, you can ignore most broker marketing and choose a setup you’ll keep for a decade.

Cheapest FX guide → Compare brokers → Broker checklist →

Educational content only. Not personalized investment advice.

Want to sanity-check liquidity and price behavior before you place orders? Use TradingView for charts, watchlists, and alerts — execute at your broker.

Try TradingView Pro →

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Educational content only. Not personalized investment advice.

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