Moving from a bank to an investment house is cheap, but leaving one is very expensive

Regulation has made exiting an investment portfolio at a bank relatively cheap and simple, but those who have already moved to an investment house and manage their money there may discover that leaving it is significantly more expensive. In recent years, investment houses have become more significant competitors to banks for retail investors — those who trade on the stock exchange themselves. The trend has strengthened since the pandemic, when an increasing number of Israelis opened independent trading accounts.

Based on stock exchange data, 200,000 retail accounts were opened in 2025, and it is estimated that there are currently close to one million retail investors — about one in every ten citizens in Israel. They are currently responsible for about 12% of trading volumes on the stock exchange. Investment houses usually offer lower buy and sell commissions, dedicated trading systems, and convenient access to trading in Israel and the USA. Regulation has also helped: the Bank of Israel has mandated that banks allow the transfer of a securities portfolio online, thereby removing a significant barrier to switching. Furthermore, according to Bank of Israel rules, to increase competitiveness and increase mobility, it was determined that the maximum cost of transferring an investment portfolio from a bank to stock exchange members that are not banks would be limited to only 5 shekels.

The move of investors from bank trading platforms to investment houses is welcome, as it increases competition and significantly lowers trading activity costs for customers. Costs at a bank are several times higher compared to investment houses, differences that can reach hundreds of shekels per year. However, there is a regulatory loophole, and that is the costs borne by the customer who wants to transfer their investment portfolio from one company to another. Under the assumption that competition will continue to grow in the investment platform industry, the transition from one investment house to another will also become more common. But the costs of moving, as mentioned, are soaring to heights — thousands of shekels for moving a large portfolio.

The gap in mobility costs has become particularly significant in recent years due to the surge in the volume of the public's financial assets. According to Bank of Israel data, the public's financial asset portfolio grew from 4.5 trillion shekels at the end of 2020 to 7.25 trillion shekels in March 2026, a jump of 61%. The tradable component grew even faster: the value of shares held by the public in the country more than doubled, from 614 billion shekels to 1.38 trillion shekels, while the value of shares and tradable securities abroad rose from 772 billion shekels to 1.29 trillion shekels.

A check by Calcalist with all investment houses that provide investment platforms shows that transferring an investment portfolio to competitors will amount to hundreds of shekels, and for large portfolios even thousands of shekels. For example, the company Blink stated that transferring an investment portfolio from it to competitors will result in a commission of 0.1% of the value of each security and no less than 8 dollars per security. That is, for a customer with 20 securities in their portfolio, moving to competitors will cost 160 dollars (almost 500 shekels), a cost that is 100 times higher than the bank.

Other companies also set high exit costs:

1. IBI charges 21 shekels per Israeli security (capped at 150 shekels) and 10 dollars per foreign security.

2. Meitav charges similar commissions but sets a limit of 99 shekels for Israeli securities.

3. Excellence charges 0.1% on Israeli securities (capped at 99 shekels) and 0.1% on foreign securities (minimum 10 dollars).

4. Psagot charges 0.07% of the value of an Israeli security (capped at 70 shekels).

The exception among the investment houses tested is Interactive Israel, which does not charge exit commissions. David Shem Tov, CEO of the Interactive Israel group, told Calcalist: "Transferring an investment portfolio between entities should be a simple process and not a barrier for the investor. There is no reason why transferring an investment portfolio should involve a high cost for the customer."

Despite their growing influence, banks still control a very large part of the market. The Bank of Israel found that 96% of household investments in money market funds at the end of 2024 were held through banks and only 4% through investment houses. The Securities Authority responded: "As of today, stock exchange members are not subject to the Authority's supervision. We promoted the broker-dealer legislation, which was intended to grant the Authority appropriate supervisory powers in the field. The legislative process was not completed in the current Knesset, and the Authority intends to work to complete it as soon as possible."