Investing in Switzerland: The best brokers (2024)

It seems like you have done your homework. You wouldn’t be looking at this article if you didn’t! I am going to assume that you have had a close look at your financial situation, you have a grip on your income and expenses and are now ready to place your first investment. First of all: I’m proud of you! You have taken a big step towards your financial freedom. You are taking matters in your own hands, and I applaud you for it! The next step is buying your first stock-ETFs, depending on your chosen strategy. How does that work? Back in the days, people would go to the bank and have (human) brokers place their orders on the stock market. Thankfully today, we don’t need to do that anymore. Online brokers are the magic solution! In this article we will deep dive into how an online broker works, what criteria to look at when choosing your broker and what online brokers I recommend for Swiss investors.

But first things first … 

Table of contents

• The basics of investing with online brokers in Switzerland
  • What is an online broker?
  • Why should I choose an online broker over a regular broker?
  • What broker charges are common?
  • Can brokers be trusted?
  • How is a broker different from a robo advisor?
• The best brokers for investors in Switzerland (2024)
• Last words on the best brokers in Switzerland

The basics of investing with online brokers in Switzerland

Let us look at some of the basics of investing with online brokers in Switzerland. Learn more about what an online broker is, what they do and how you can choose the right broker for you.

What is an online broker?

An online broker is a service or an app that helps you buy or sell stocks, ETFs, bonds and other investments like gold. In exchange for this service, brokers typically charge a fee or commission. The fee is usually a percentage of the amount that you invest or spend with the broker. 

Why should I choose an online broker over a regular broker?

Like many other services out there: The online version is always cheaper. A regular, human broker needs to be paid a salary every month. An online broker is a much more scalable business and therefore much cheaper for us as investors. Of course, human brokers have a lot of knowledge and expertise in selling and buying stocks. But: Studies have shown that even so called “experts” can’t consistently beat the stock market and their fees are too high - which would make any surplus fade away anyway. 

In experiments, monkeys have as much a chance of predicting the stock market than humans (read about it here) - sweet fun fact, no? My advice: Spend the time to acquire your own knowledge and place your own orders without relying on so called “experts”.

What broker charges are common?

Once you get started with investing you will quickly learn that it comes at a cost. And our aim is to keep that cost as low as possible to have the highest yield on our investment! Here are some of the fees that you might encounter:

• Trading fees: Imposed by the broker for buying and selling financial assets for you
• Custody fees: Imposed by financial institutions for holding (aka being the “custodian” of) your assets
• Product fees: Imposed by issuers of financial products; for example, for an ETF’s ongoing fees

Understanding these fees and keeping them in mind is crucial for you to make profitable investment decisions. 

Can brokers be trusted?

That is a tough question to answer. There are and always will be people taking advantage of others in any given industry. Doing your homework and researching the best broker is important to make the right decision and give your hard-earned money to a broker that can be trusted. That is why I am writing this article: To help you with your research and to help you make the best possible decision. Fortunately, most Western countries have regulators in place to minimize risk for investors. The FINMA (Swiss Financial Market Supervisory Authority) in Switzerland oversees financial institutions such as banks or insurance companies to ensure your peace of mind. When choosing a broker,  make sure they are regulated by the FINMA (it will usually say so on their website).

How is a broker different from a robo advisor?

A broker and a robo advisor are two different types of investment services. While the broker offers you a platform to select and then buy and sell financial assets, the robo advisor actively manages your investment for you. A robo advisor is an automated investment manager based on an algorithm. Before getting started with a robo advisor, you will answer questions on your investment goals and risk tolerance. Based on your answers, the robo advisor will go ahead and pick and choose financial assets like stocks and ETFs for you. I’m assuming that you are reading this article, because you want to take matters in your own hand. With the right financial knowledge, you will be able to pick and choose the right stocks and ETFs for you without needing the help of a (pricey) robo advisor. Every party involved (even electronic ones)in your investments  is going to generate cost and thus will slim down your profitability!

The best brokers for investors in Switzerland (2024)

Now that you know all that there is to know about brokers, we will get to the juicy part: What is the best broker for investors in Switzerland? In this comparison, we will look at Degiro, Swissquote, Interactive Brokers and Migros Bank. Some are Swiss platforms (like Swissquote), some aren’t (like Degiro). Some belong to a bank, some are a separate platform (like Interactive Brokers). To make the comparison as easy as possible, I have included a trading example. Find out how fees differ from broker to broker for a CHF 1’000.-  investment into the MSCI World at the Swiss Stock Exchange.  

Last words on the best brokers in Switzerland

I am a fan of keeping it simple. And in my book that means: Pick a trustworthy broker that offers low fees. From all brokers introduced in this article, Degiro walks away as the winner! The Dutch platform not only offers the lowest fees amongst the other brokers, but the absence of stamp tax makes it even more appealing. The only downside is the lack of a yearly Swiss tax report. But thank goodness, the Swiss tax authorities make it easy to report your positions with the ISINs, thus no real pitfall.