What investing really costs: from spread to tax
In short
- Investing costs sit in more places than the order fee, including the spread, fund costs, exchange rates and tax.
- The Dutch regulator AFM counted twelve types of cost and calls their effect on net return large, especially for long term investors.
- In our worked example, 1 percent a year over 30 years eats almost a quarter of the final amount, but it is a calculation and not a forecast.
- Tax is not a broker cost but belongs on the list, and it differs a lot between the Netherlands and Belgium.
You see your broker's order fee on the screen. It is rarely the whole bill. Investing costs money in a handful of places, and some of them never show up as an amount.
In a study of its own, the Dutch regulator AFM counted twelve types of cost, from entry fees and management fees to custody charges and fund mark ups. Here are the six that matter most to an ordinary investor.
1. Transaction fees
What your broker charges to execute an order. In a Belgian comparison, Easyvest lists €0 to €10 per order depending on the broker. Some brokers charge a fixed amount per order, others a percentage of the order size. On small orders a fixed amount weighs heavily, on large orders a percentage does.
2. The spread
The difference between the price you buy at (ask) and the price you sell at (bid). It does not appear on your statement, but you pay it: you buy slightly higher and sell slightly lower than the mid price. On large, busy stocks and ETFs it is often small. On small funds it can get wide.
3. Fund costs: TER and ongoing charges
If you invest in a fund or ETF, you pay a yearly percentage of your assets to the provider. The TER (total expense ratio) is that percentage for running the fund. Easyvest gives a range of 0.05 to 1 percent a year for ETFs. Ongoing charges are a related measure that also includes other fixed fund costs. You are not billed separately: the costs come out of the fund's price.
The AFM wrote earlier that in its calculations fund costs made up more than 80 percent of total costs when an investor held only funds. That report dates from 2012, but it shows where to look first.
4. Exchange rate
If you buy in a currency other than the euro, your money gets converted. Brokers add a margin for that, visible or hidden in the exchange rate. Easyvest points out that bank charges can apply to international investing, including currency conversion, and advises watching for cheap conversion.
5. Custody and subscription fees
The AFM lists custody fees and subscription fees as separate types. Some brokers charge a yearly or monthly amount for keeping your account. Many charge nothing, but check the fee schedule.
6. Tax
Not a broker cost, but a cost.
Netherlands: you pay box 3 on your wealth every year. A Dutch company also withholds 15 percent dividend tax on the dividend it pays out.
Belgium: stock exchange tax (TOB) on every purchase and sale. According to Curvo it is 0.12, 0.35 or 1.32 percent depending on the product, with a cap per transaction of €1,300, €1,600 and €4,000 respectively. On dividends from distributing ETFs, Belgium withholds 30 percent according to Easyvest. Since 1 January 2026 a 10 percent tax on capital gains applies, according to Test Aankoop. I could not verify the exact rules and exemptions, so check those with the Belgian authorities.
Rules change. These are the positions as of October 2026.
The worked example: 1 percent over 30 years
This is a calculation with assumptions. It is not a forecast of what investing returns.
The assumptions: you put in €10,000 once. Gross return is exactly 6 percent every year. Costs are 1 percent of your assets every year. We leave out tax and inflation. A real market does not move this evenly.
Without costs: €10,000 × 1.06 to the power 30. That power is 5.7435. This gives €57,435.
With 1 percent in costs, 5 percent net a year is left: €10,000 × 1.05 to the power 30. That power is 4.3219. This gives €43,219.
The difference is €14,215. That is 24.8 percent of the final amount without costs, caused by a single percentage point.
How do you check this yourself? Type 1.05 into a calculator, raise it to the power 30 with the power key and multiply by 10,000. Do the same with 1.06. Subtract the results.
The effect sits in compounding. Someone who pays 1 percent does not only lose that 1 percent, but also the return that would have been earned on it in later years.
For comparison, the AFM gives its own example with a deposit of €400,000 and a gross return of 6.25 percent: after 20 years, cutting costs from 2.5 to 2.0 percent yields about €87,000 more.
What you can do with this
Ask for the full cost overview before you buy. Compare total yearly costs, not just the order fee. This is an explanation, not advice to choose any particular product.
