Guide · Path 2, Your broker and your first order · Beginner
How to choose a broker: what to check before you open an account
A good broker for beginners is regulated, charges low fees on stocks and ETFs, gives you access to the markets you want and lets you withdraw your money quickly. Check these four things before you send your first dollar, then look at the details: how your money is protected, the app and the tax reports.
Key points
- Only choose a regulated broker and check its name in the regulator's register.
- Compare the total cost: the fee per order, the spread and currency conversion.
- Check that it has the markets you need: US, Europe, your home market, the ETFs you want.
- Make a small test withdrawal before you deposit large amounts.
- A yearly tax report saves you work at tax time, and the W-8BEN form cuts US tax on your dividends.
Check that the broker is regulated
A regulated broker holds a license from a financial authority and must follow strict rules: it keeps your shares separate from the company's own money, discloses the risks and answers to the regulator. Without regulation, you have no protection.
- In the UKFCAthe Financial Conduct Authority
- In the USSEC and FINRAwith SIPC protecting customer accounts
- In the EUCySEC, BaFin, AMF, AFM and othersan EU license is valid across the EU
- Find the exact company nameThe brand on the website can differ from the company that holds the license. You will find it at the bottom of the page, under the legal information.
- Check it in the regulator's registerGo to the regulator's website, such as the FCA register or FINRA BrokerCheck, and search for the company by name or license number.
- Watch out for clonesSome fake websites copy the names of well-known brokers. Use the website address listed in the register, not the one in an ad.
What the broker costs: fees, spread and currency conversion
The fee per order is only part of it. The total cost comes from three things, which you will find in the broker's fee document:
| Cost | What it is | What to look for |
|---|---|---|
| Commission | what you pay on every buy or sell | fixed (for example $1) or a percentage of the amount |
| Spread | the gap between the buying and the selling price | small on large stocks, wider on small ones |
| Currency conversion | the cost of changing your money into dollars, pounds or euros | a percentage of the amount, charged every time you convert |
There may also be inactivity, withdrawal or custody fees. Look for them in the fee document before you open the account.
"Commission-free" doesn't mean free: the broker can earn from the spread or from currency conversion. The details are in the guide to costs.
Check which markets the broker offers
Not every broker offers every exchange. Before you open an account, search the broker's app or website for exactly what you want to buy.
- US stocks (Apple, Microsoft): almost every broker has them.
- UCITS ETFs: the ETFs you can buy as an investor in the EU or UK. US-listed ETFs such as VOO are generally not available to ordinary investors there.
- Your home market: check that the broker gives you access to your local stock exchange if you want local shares.
- Fractional shares: useful if you want to invest small amounts every month.
See how you deposit and withdraw money
A good broker lets you deposit and withdraw money easily, by bank transfer, from and to an account in your own name. Check:
- which currency your account holds (dollars, pounds, euros) and what conversion costs;
- whether there is a minimum deposit;
- how long a withdrawal takes and whether it costs anything;
- that money can only be withdrawn to a bank account in your name.
What happens to your money if the broker goes bust
The stocks and ETFs you buy through a broker belong to you and are held separately from the company's own money. If the broker goes bust, they are not part of its bankruptcy.
If money goes missing because of the broker, for example through fraud, an investor compensation scheme steps in. It covers at least €20,000 per person in the EU, up to £85,000 with the FSCS in the UK and up to $500,000, including up to $250,000 in cash, with SIPC in the US.
Check the app and the tax reports
Finally, check these details, which matter in the long run:
- The app: easy to use on your phone, in a language you understand well.
- The W-8BEN form: if you live outside the US, you fill it out at your broker so the US withholds less tax on your dividends. See the W-8BEN guide.
- The yearly tax report: a document with last year's gains, losses and dividends, which helps you with your tax return.
- A monthly investment plan: some brokers automatically buy the ETF you chose every month.
Here are some regulated brokers you can compare against what you have learned above:
75% din conturile retail pierd bani când tranzacționează CFD-uri cu XTB. Regulated brokers, picked by our team. Some links are affiliate links: if you open an account through them, we may earn a commission at no cost to you. All brokers
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Test yourself
What do you check first at a new broker?
Regulation comes first: without it, nobody protects you if something goes wrong.
A broker says "zero commission." What does that mean?
Commission is only one of the costs. You still pay the spread and currency conversion when the commission is zero.
Your shares fall 30%. Does the investor compensation scheme pay you back?
The scheme steps in when the broker can't return your money, for example after fraud, not when prices fall.
Done. You can move on to the next guide.
Frequently asked questions
What is the best broker for beginners?
There isn't a single one. When you start, what matters is that it is regulated, charges low fees on ETFs, offers fractional shares and has a simple app. Compare a few using the criteria in this guide.
Is my money safe with a broker in another country?
If the broker is regulated, your shares are held separately and an investor compensation scheme applies: at least €20,000 per person in the EU. Check which scheme covers the broker you choose.
Can I have accounts with more than one broker?
Yes. Many investors have one account for their home market and another for international markets. Just keep records, because you report the income from all of them on your tax return.
What documents do I need to open an account?
Usually an ID and proof of address. The broker will also ask about your experience and where your money comes from, because the law requires it.
Our guides are for information only. They are not a recommendation to buy or sell. Sources: FCA, SEC, FINRA, SIPC, ESMA, brokers' fee documents. Last checked: October 22, 2026.