The commission is zero. The spread is 1.5%. That sentence describes the business model of several of the most popular retail investment apps in Europe, and most users have no idea they are paying it on every deposit, every trade, and every dividend.
How FX conversion works — and where the money goes
When you deposit GBP and buy a EUR-denominated ETF, your broker converts the currency at a rate. The mid-market rate is published live on Reuters and Bloomberg. The rate you receive is something else. The difference is the FX spread, and it is charged on every deposit, every cross-currency trade, and every foreign dividend received.
The spread varies enormously by broker
Freetrade charges 0.45% on non-GBP trades. eToro charges 0.50–1.5% depending on direction. Degiro charges 0.10% within trading hours on select pairs. Interactive Brokers charges a flat $2 with no spread markup — on a €2,000 trade, the effective rate is 0.10% versus Freetrade's 0.45%.
The compounding effect over time
Assume you invest £1,000 per month into an EUR-denominated ETF. At 0.45% FX spread, you lose £4.50 every month — £54 per year. Over 10 years of monthly investing, that drag accumulates to over £700 in forgone compounding. That is more than a year of platform fees on most budget brokers.