Israel-headquartered multi-asset broker eToro has announced some changes to its fee structure
What changes is eToro making to its fee structure?
eToro is making various changes to its fee structure. Perhaps the most interesting of these is the removal of the flat $5.00 withdrawal fee, that the broker currently charges, when clients move money out of their US dollar accounts at the firm, and into their GBP accounts or vice versa.
However, the firm isn’t giving clients a free lunch entirely, because it will instigate a new set of FX conversion charges that are based on a client’s status at the broker.
The are five tiers of clients, ranging from Bronze to Diamond, and the conversion fees scale down depending on where you sit in that hierarchy.
For example, a Bronze customer will pay a 0.75% FX conversion fee when moving money between their US dollar and sterling accounts, but a Diamond customer could pay as little as 0.15% for a similar conversion, assuming they qualify for the maximum fee discount.
Which tier is my account in?
Your account status at eToro depends on your account balance.
- A basic account is classified as Bronze, however, higher categorisations are available to those who join the eToro club. Those customers with a balance of US $5000.00 or more automatically qualify as club members and as Silver accounts.
- Gold accounts must have a balance of $10,000 or more, Platinum accounts start at $25,000, and Platinum Plus accounts, at balances of $50,000 or greater.
- Diamond accounts require customers to have $250,000 in their accounts
When do these changes take effect?
eToro is planning to roll out the changes in September this year, and until then the existing arrangements will remain in place.
eToro says that the changes are part of their commitment to providing a more transparent and localised investing experience to their customers, across the globe.
If you use eToro and ever transfer money between your USD and GBP accounts, or trade non-GBP assets with GBP funds, then these changes will likely affect you.
How do the new eToro fees compare to those of its rivals?
eToro’s new FX conversion fees are based on a customer’s account balance and status, however, rival firms take a different approach to these charges.
For instance, Hargreaves Lansdown has a sliding scale of charges, for all its customers.
Conversion fees start at 1.00% for transactions of up to £5000, the next £5000 is charged at 0.75% whilst conversions of £20,000 or more incur charges of just 0.25%.
IG Group’s FX conversion rates start at 0.80%, on CFD and Spread Bet accounts. Saxo Markets offers a flat rate of 0.25%, whilst Capital.com applies FX conversion fees of 0.70%.
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