Analysis of the new rates of ING Direct’s Orange Broker

ING Direct has just announced that it will introduce new rates in its “Orange Broker” service as of November 12, 2.012. One of the aspects that every investor in the stock market must take care of so as not to damage that profitability that is so difficult to obtain is to keep commissions at bay. Therefore, it is necessary to examine this change in ING's rates.

In this article we will see an analysis of the changes in rates and examine how it affects us as investors, studying which operations this rate change benefits and which ones it harms.

Operations in the Spanish market with the Orange Broker *

ING Orange Broker Comparison of New Rates on the Spanish Stock Market

ING Orange Broker Comparison of New Rates on the Spanish Stock Market

Operations in the European market with the Orange Broker **

ING Orange Broker Comparison of New Rates on the European Stock Exchange

Operations in the American market with the Orange Broker

ING Orange Broker Comparison of New Rates on the American Stock Exchange

ING Orange Broker Comparison of New Rates on the American Stock Exchange

What operations does the ING rate change benefit?

The rate change benefits:

  • Operations in the Spanish market * for an amount greater than € 2.800.
  • Operations in the European market ** of an amount greater than € 4.000.
  • Operations in the American market for an amount greater than $ 4.000.

What operations does the change in rates of the Orange Broker affect?

The change in rates harms:

  • Operations in the Spanish market * for amounts less than € 2.800.
  • Operations in the European market ** for an amount less than € 4.000.
  • Operations in the American market of less than $ 4.000.

The percentage impact is much higher in low-value operations, with an increase of more than 50% in operations of € 500 or $ 500 in foreign markets and a percentage increase in commissions of more than 90% in operations of € 500 in the Spanish market .

ING Direct's absurd reasoning for rate change

The company, in a letter sent to customers, states that the reasons for the rate change are the following:

  • Simplification of rates.
  • Adaptation to the entry into force of Circular 7/2011 CNMV.

The excuse of simplification is not at all convincing, and less if what is intended is to make us believe that it is done for the benefit of the client. What interests me as a client of the Orange Broker is that the commissions are low, not that they are simple. I imagine this will happen to the vast majority of clients as well. Adaptation to Circular 7/2011 CNMV It is not a convincing excuse either, since the adaptation to this circular does not in any way imply this increase in the rates for minor transactions.

Large companies like ING have a great marketing team behind them and they know very well what they are doing with this rate change. I have no doubt that ING's objective with this rate change has been to “covertly” increase the rates for investors who carry out small operations and to try to attract investors who carry out larger operations. When I say that it is a “covert” rise, I mean that ING does it is to mask this rise behind excuses such as simplification and adaptation to new regulations.

Months ago, the Orange Broker introduced the obligation to carry out at least one operation each semester in order to preserve the free custody of securities. It is an acceptable condition, but it was a deterioration in service. With the change of November 12, ING will continue its trend of worsening service, at least with regard to investors with less equity or those seeking greater diversification.

Is the Orange Broker no longer a good option?

Despite all this, for the moment I will continue to be an ING client, since, despite its changes for the worse, the Orange Broker continues to be a good alternative for long-term investment due to the possibility of avoiding custody fees . However, many small equity shareholders may decide to look for better alternatives.

You can find more information on the website of ING Direct rates.

* The first 5 operations of each month.

** In the Helsinki, Brussels and Lisbon stock exchanges the minimum is € 30.