I made some computations in a spreadsheet. It that may interest others or provoke discussion. Suppose we make these assumptions:
- We will add £20k to our account each year.
- We will trade/rebalance 1/4 of our entire account each year and assume the worst case, that all of this will all involve two 0.15% fx fees with Trading 212.
- Revolut Premium account costs £72/year and comes with 0 fee fx and 8 shares trades a month, further trades cost £1.
- Interactive Brokers has $10pm fee which can be used as credit against transaction fees, typically $0.35 to buy <100 shares. Assume we deposit and exchange to USD (say) monthly (with $2 fee each time, and negligible fx cost).
- We will make 150 trades per year.
- We will have 6% gain per year.
- We will withdraw everything (about £115,250) at end of 5 years.
- We ignore fx fees on dividends. It the portfolio is returning 4% then this could amount to a cost of about £30 for dividend distribution and reinvestment over five years.
I now compare to brokers that have multicurrency accounts so that trading avoids fx fees. Columns c-e and g are showing totals over 5 years. Columns b and f are for new money in and final withdrawal. Figures are GBP.
Different assumptions can be made. For instance if we were to completely turn over the entire portfolio each year, with 600 trades then this is the answer
In this case, a Revolut user would do better to have a Metal Account, with unlimited free trades and an annual fee of £120. Doing this column h becomes 0.25%.
What about the buy and hold investor who only rebalances by selling and reallocating 1/10 of his portfolio each year?
I can keep showing tables. Eg. assume 12% growth rather than 6% growth, but that is much the same as the first table.
Things will look better for Trading 212 vs the others if one looks at a period longer than 5 years, trades less, or has less than 100% in other currency stocks.
A person who already pays for a Revolut Premium account for other reasons can deduct £360 (=5 x 72) from the Revolut line in column g.