Fresh Banking in Spain - Stock Brokerage Commission Fees
Commission structures bank charge their clients have often a product and or service-oriented component. Product-oriented structures have a lot of fixed fees, real service oriented structures are variable.
In the product-oriented approach banks charge mostly fixed fees, because "the service" is offered like a product you can count. A real service however has no minimum, nor a fixed fee, but a variable fee; the fee depends on the volume of the service. Outsourcing is also based on this principles: companies that contract other companies to source part of their service don't choose a fixed price: if the volume of the service is less than average, the transaction-costs will be scalable in line with this volume, up-side or down-side.
Here are some examples what banks charge their clients:
A Savings bank in the South of Spain is charging in the following way:
A transaction of 15,000 euros would cost about 0,35% to 0,40% of the value (about fifty euros excl. Custody). Many other banks use this structure too.
BBVA, the second largest bank in Spain:
After a simple search on the web, the commission structure is shown in a pdf document. Special about the structure of BBVA is the differentiation between order entry and (transaction) execution: You pay twice, even if your order didn't make it, you get charged anyhow. That isn't a client-oriented approach, but reveals rather how their systems work (the order system is part of the bank, the transaction is executed on the exchange, in Spain likely to be the BME).
The largest private of Spain:
When looking for the same commissions, by searching for "tarifas compra valores," the site responds with ten pages, but the commission structure isn't one of them... (I could not find them on the site)
ING Direct -- the Fresh banking newcomer. they've compared their commissions with other main banks and found a difference of about 100%. Other banks charge twice (2) as much as the online bank. A stock transaction of about 10,000 euros costs sixty euros and ING charges only thirty euros (5 euros fixed plus 0,25%). These sixty euros is more than shown at Unicaja, because the custodian fee isn't calculated. ING Direct doesn't charge this fee.
Then there are a few online banks, like Openbank which is owned by Santander. Openbank uses a combination of fixed and variable fees. These fees are fixed per tranches - twenty euros fixed for transactions between 10,000 and 15,000 euros. Small letters on the site talk about additional commission (percentages isn't mentioned) per transaction that has to be paid to the exchange. This is another example of a product oriented approach: as a private investor, I request a service from my bank and nothing more, I don't want to know what the bank has to pay to the exchange. This doesn't make the process more transparent. Openbank charges a two / thousand custodian fee for every four months.
This is only a first and basic overview of the commission structure Spanish banks charge their clients. There is no site in Spain that makes a comparison of the commissions charged. Rankia.com presents only a quality review. In the netherlands these overviews are quite familiar (inderpender.nl).
A conclusion may be that in Spain private investments isn't really a hot topic as it's in The Netherlands where the fees are lower and more service-oriented.
But new (global) trends will also stop-by in Spain. How long will we've to wait until zero commission brokerage -- like the zecco-formula -- will enter Europe and Spain. The Spanish banks are still laughing at the commission income they receive. But they may not laugh for long.
H.J.B.
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© Hans Bool
