So, you are new or quite used to investing, and just started your new life in France, let’s dig up all brokers available in France for continuing your trading journey. Let’s also talk about french fiscal oddities and how you can save money by using the right french fiscal rules at the right time.
Disclaimer: As a french, I personnaly used most of the tools I’ll describe in this article. However it’s also possible I haven’t had time to test the extensively, or havn’t had the possibility to try all of them altogether. It’s also possible these brokers have done an update or changed their rules and this article will not reflect that. As I’m always open for remarks and correction and I’ll try to keep this information as accurate as possible, however please keep in mind that this website is published for entertainment purposes, and does not constitute or be used as finantial advice. As all information you can read on the internet, it’s up to you to do your own due diligence regarding tools, actual rules and techniques and decide what you can use and how you can use it.
Also please note that I don’t provide a link to the brokers. I don’t get any comission if you subscribe to any of these so I don’t have any incentive to make you to do anything. This article are only my opinion and should only be taken as such.
What make a good broker?
This is usually the first step when starting an investing journey, and it’s also at the same time both the most important and the least prepared for. That’s why lot of new wannabe investors get lost in all the options given to them, and just give up their goal altogether.
Let’s start by defining what make a great broker for stock trading and see if it fits for you trading strategy. Let’s also check out which fiscal advantages and penalities your broker can offer you.
As you will see later on, each broker can fit into some trading styles and strategies but wont fit for other. I’ll let you check out my article on how to choose your trading strategy or at least know which one exist and which ones arn’t fit for you.
So to my man point: What make a good broker? Well, for me it’s a broker that’ll:
- Execute my trades accurately and in a timely manner
- Hold my funds
- Give me accurate numbers on the orders I am going to pass
- Don’t have exaggerated fees and limitations
- Provide fiscal advantages over my situation
As a French citizen you probably have to pay taxes. As of 2022, taxes are about 30% of your trading income. That can get to a pretty number at the end of the year so every rebate you can have is always good to use.
France is a country member of the European Union (EU), and in europe there exist a taxe incentive to invest in european values. In france this advantage take the form of a special trading account called Plan d’Epargne en Actions (PEA), litterally share saving plans in account. The idea of that whole account is that you pay taxes only when you withdraw (instead of on individual trades) and you get a substantial (around 15%) rebate if you wait 5 years for the first withdraw.
These type of accoun are incredibly popular accross french investors as if you don’t plan to use money for other things for a 5 year period, then you get a pretty nice taxe deduction along with a simple unique number to declare. However, this type of account have limitations: you can credit that account only up to 150 000€, trade only EU values and stocks (almost every stock and ETF that have an official valuation in euros) and if you withdraw before 5 years you have to close all the transactions, close the whole account and pay income taxes on the full amount.
PDT rule in France
Most starting traders in the US face problems with the PDT rule. This rule prevent you from doing more that 5 day-trades in a 4 days window if your account is below 25k USD. I’ll not go into a rant about how this rule doesn’t protect in any way retail traders and why it’s just an useless rule that add just more hoops to jump through as an aspiring trader.
So here is a good news for you. The whole European Union doesn’t have such a rule. So you can day trade or pattern trade as long as you want and with as many money as you want in your account !
As sayd earlier, a PEA is a fiscal advantageous account type that provide taxes deductions when held more than 5 years and have the benefit of beign automatically transmitted to your fiscal report. As a very regulated account, most EU brokers doesn’t offer this type of account. However, traditionnal banks offer them. Also, please note that PEA broker will keep your cash in euros, and provide only values with a quotation in euros.
I’ll just present two PEA providers that I have personnaly tested:
Order prices are inexpensive at Bourse Direct. Both for European stock exchanges such as Euronext Paris, Brussels or Amsterdam as well as for orders abroad. The only disadvantage of ourse Direct on this side is the custody fee of 0.036% per annum while none of their competitors charge these fees. There is also a fee for withdrawing funds, and the interface doesn’t really differenciate stocks available for use inside a PEA and thoses which arn’t available.
I’ve already had problem with transfers taking a long long time to clear with them. Usually a simple message to the support make the problem go away instantly. This is a good point as their support staff is very responsive and have a quick reaction. However it make it seem like the whole process is very “handmade” and thus, error prone.
In addition to providing stock brokerage services, Fortuneo has the advantage of being a bank. If you really don’t want to separate the two, or if you think withdrawals are important and need to be done quickly, Fortuneo may be a good choice even though overall they are more expensive. Fortuneo offers an offer with 0 brokerage fees but a pity only for securities accounts and with an outstanding amount of € 50,000. No withdrawal fees like at Bourse Direct which charges € 6 per withdrawal. Again, this is to be decided according to the use that you will have of it.
The interface of Fortuneo seems a little nicer than that of Bourse Direct and I have never had any feedback about transfers arriving late or to the wrong account. Also their phone support both for the bank part and the trading part is both quick and understanding, and has already provided me with very valuable information.
The only drawback is that the account creation is quite ong if you arn’t already a client. In fact it can take up to 3 weeks to clear. In my case as I was already one of their client, the whole process went through in one week, including me providing some missing documents.
Standard Account brokers
Standard account brokers are unregulated internationnal ones. Usually these account arn’t eligible for any taxes rebate as they operate unregulated and offer all the possibilities of the worldwide market. Your income on these brokers will be subject to the will 30% taxes fee on profits. Please also note that most of these brokers operate internationnaly and will keep your cash in USD. This will incurr a currency exchange fee each and every time you add or withdraw funds from your trading account !
Both fortuneo and Bourse-direct provide internationnal account, however their prices arn’t competitve with standard internationnal accounts.
Etoro is an internationnal broker based in Cyprus. It operate following the rules of the CySEC, the cyprus equivalent of the US SEC which are a little different. This is, by far, one of the most begginner friendly broker I have ever seen. The interface is quite user friendly and most indicators are outright available directly in the web browser. Just make sure to have a somewhat beefy computer if you want to play with multiple charts and indicators just to make sure your web browser dont hang on you at the worst time. The mobile application on the other hand is quite slow and sluggish, and albeit it has received a much appreciated overhaul these last months, I still find it quit slow to swap between views and stocks graphs. Clearly this broker is perfect for slow strategies like swing trading but not for day trading as you’ll always find the quick 5 seconds delay too much for your nerves.
Find one that fit your trading style
Just like any worker who need the right tool for the job, your trading career need the right broker for your job. Please test some and don’t stay locked into the first. If you are a beginner it’s the only wait to grasp what you’ll want your broker to have and what you’ll find useless. Find one that support your trading style and that wont let you down when it matter the most. Also please consider don’t putting all your eggs into only one basket as a technical problem can always happen to even the best of them !
Stay on the edge and happy trading !