EToro earned more than $ 340 million in commissions

The Israeli brokerage company eToro is actively attracting investors’ attention with flamboyant advertisements and offers for social trading of stocks without commissions. However, the well-known financial publication Financial Times conducted an investigation and found a discrepancy between promises and reality.

The broker ran ads on YouTube and even brought in famous people (such as Alec Baldwin) to promote their services. Despite the stated lack of commission, eToro’s Q1 2021 Financial Results report contains the following information:

In the first quarter of 2021, the company earned 141% more in commissions than in the first quarter of 2020 – $ 347 million.

The company’s management notes that in the first quarter of this year, the number of new customers exceeded 3 million. This was one of the reasons for the sharp increase in profit from commissions. Taking into account the information from the press release, it can be concluded that the broker does not stick to its promises about the lack of interest. So, if an investor uses leverage or wants to switch from trading stocks to trading cryptocurrencies / CFDs, he will be forced to pay a commission.

It is noteworthy that despite high income from commissions, the company’s profit in Q1 2021 declined by about 90%. The broker explains this situation by the costs of the marketing campaign.

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