Best Investment Platforms
Find the best Stocks & Shares ISAs & General Investing Accounts
Updated: 20th November 2020
Investing your money will allow it to grow. Whether you’re investing for retirement, financial freedom or just financial security, an investment pot working for you will greatly help you reach your goals.
The purchasing power of money rapidly shrinks year after year due to the silent assassin known as inflation. Not only does investing allow you to build wealth but it also helps defend your future against this invisible enemy.
Interest from savings will not protect your money in real terms as the miserly interest rate paid by banks is far below inflation. You must invest to protect and build your wealth…
How to invest?
Investing today had never been easier. With the advancement of incredible technology such as the Internet and the mobile phone, and the revolutionary development of the financial services industry, you can now invest in practically anything you can imagine from the comfort of your home.
The most common way to invest is via an investment platform that allows you to do it yourself. A good investment platform will give you wide-ranging access to stocks and shares, funds, ETFs, and bonds. Not all investments are created equal. You will want to build a diversified portfolio that is in line with your attitude to risk and financial goals.
DIY investment platforms are best suited to those who know what they’re doing, and those willing to learn. Making your own investments can be fun but the end goal should be to maximise your wealth. Generally, DIY investing platforms will be cheaper than other ways of investing.
Another popular way to invest is via a robo-investing platform. These will do all the hard work for you and are great for those that either don’t know how to invest or are not inclined to manage their own portfolio.
A robo-advisor will provide a digitised and simplified alternative to what a human financial advisor would traditionally have offered, but crucially for a much lower fee.
You will be asked some fact-finding questions that aim to assess your attitude to risk and financial goals. They will then allocate you to a suitable basket of investments and manage them on your behalf.
While robo-investing platforms are very affordable, they do typically cost more than DIY investing platforms. However, the most important thing when investing is not the fees you pay but what return you get, so a small premium may be worth paying.
What is a Stocks & Shares ISA?
An ISA is a tax-free savings account, which stands for individual savings account (ISA). Everyone in the UK over 18 has an annual £20,000 ISA allowance. The tax year runs from the 6th April to the 5th April the following year.
You can use all of this allowance for a stocks & shares ISA if you want, or you can split it between stocks & shares and any of the other types of ISA: Cash ISAs, Lifetime ISAs and Innovative Finance ISAs (used for P2P Lending). You can only subscribe to one of each ISA type per tax year.
If you do not use all of your ISA allowance before the end of the tax year it will be lost. You cannot carry forward any unused ISA allowance from one year to the next.
Is it really tax-free?
Almost. You do not pay tax on:
- Income (e.g. dividends)
- Capital Gains
However, you will have to pay transactional taxes (if applicable) such as UK stamp duty. UK stamp duty is paid when you purchase most UK stocks – currently 0.5%.
Moreover, when investing in foreign listed securities (e.g. US Stocks), some countries deduct a withholding tax from any dividends or interest paid. Speak to your investment platform for ways this can be minimised. For example, when investing in US stocks you can reduce dividend withholding tax from 30% to 15% when you complete a w8-ben form.
How to choose an investment platform / S&S ISA?
When choosing an investment platform, you want to look into these key points: Cost, Investment Range, Customer Service and Functionality.
You want the cost to be as low as possible, but not at the expense of other features. Each platform has their own unique (and often complicated) fee structure, so you can avoid or reduce painful fees from the start by choosing the correct platform that’s right for you.
Many investment platforms have unfortunately decided to overcomplicate their fees, and unwitting investors may pay over the odds if they’re not careful. We have done the grunt work for you and the comparison table below should highlight the most important fees to aid your selection.
These fees might look small, but over 30 years of investing, fees could erode your total potential pot by as much as half its value due to the effect of compounding.
The fees that matter most will depend on what you invest in and how often you invest.
Arguably, the main fee, often called the platform or admin fee, is one of the most important. These typically come in 2 forms – fixed fee or percentage-based fee. The rule of thumb is that you should opt for a fixed fee platform if you have more money invested; and the less you have invested the more likely a percentage-based fee will be cheaper.
One of the most important decisions when choosing an investment platform is that you need to make sure the platform offers what you want to invest in.
Some platforms have a huge range of funds, ETFs, and both international and UK stocks. These tend to be the more expensive platforms.
On the other hand, other platforms may only offer funds, whilst some platforms only offer stocks and ETFs.
Sooner or later you will need to get in contact with your investment platform. What communication methods do they offer and how helpful and responsive are they?
What services does your investment platform provide? Is there an app for on-the-go investing and portfolio monitoring? Is there a website for carrying out more in-depth analysis on your portfolio? Does the platform offer research articles and investment analysis? Does the platform offer more advanced features like stop losses and limit orders? What about cheaper regular investing services and dividend reinvestment? Will you have the opportunity to get involved in IPOs?
There’s an endless list of possible features that investment platforms could offer. You need to choose a platform that offers the ones that are most important to you.
Our Top Pick Investment Platforms
Fixed Fee Platform
For the wealthier investor – this is a comprehensive platform with a huge investment range. Interactive Investor has a fixed platform fee, so is more suited to those who have tens of thousands of pounds worth of stocks and/or funds but is expensive if your pot is just a grand or two.
It has three different plans to choose from – the cheapest, the ‘Investor’ plan, costs £9.99/month, and gives you one free trade per month worth £7.99. Funds, UK and US shares, and ETF trades cost £7.99 on this plan.
The mid-tier option, the ‘Funds Fan’ plan, costs £13.98/month, and gives you two free fund trades per month. This plan also benefits from reduced fund trading costs at £3.99 per trade.
The ‘Super Investor Plan’, costs £19.99/month, and gives you two free trades per month. This plan also benefits from reduced fund, shares, and ETF trading costs at £3.99 per trade (£4.99 for US shares).
All plans have a free monthly investing service.
Platform Charge: £9.99/month for ‘Investor’ Plan
Regular (monthly) Investing Service: FREE
Fund & ETF dealing: £7.99
Share dealing: £7.99 UK and US
Transfer Out fee: N/A
Range: Access 40,000+ UK and global stocks and 3,000+ funds, plus Investment Trusts and ETFs
The low platform fee of just 0.25% on funds makes this ideal for investors with smaller investment pots; or even large pots when investing in shares, ETFs and investment trusts – with these the fee is capped at £7.50 per quarter.
The enormous investment range will give investors plenty of choice. AJ Bell have also recognised that choice can often be overwhelming, so you can choose from their curated ‘Favourite Funds’ if you wish. Not only that but they also offer ready-made portfolios if you need help in getting started.
Platform Charge: 0.25% on the first £250,000 – capped at £7.50 per quarter for non-fund holdings (see table below for full pricing)
Regular (monthly) Investing Service: £1.50
Fund dealing: £1.50
Share and ETF dealing: £9.95
Transfer Out fee: £25 per holding
Range: Over 2,000 funds, plus UK and global stocks, Investment Trusts, and ETFs
For price conscious investors. Freetrade offers an app-only experience.
Most notably it is possible to invest with zero platform and trading fees, and unlike any of the conventional platforms they offer fractional shares. Some stocks, particularly in the US, have very high share prices putting them out of reach of some investors. Freetrade are breaking down these barriers.
There is a premium version called Freetrade Plus, the notable difference being a slightly higher range of stocks and ETFs, and more advanced order types – though the free version is likely to be good enough for most investors.
For new investors Freetrade are giving away a free stock worth up to £200 when you sign up via Money Unshackled.
Platform Charge: FREE (Freetrade Plus £9.99/month)
ISA Fee: £3 per month (included with Freetrade Plus)
Funds: Not available
Share and ETF dealing: FREE
Transfer Out fee: Free (only cash transfers available)
Range: 3,000 US and UK stocks and ETFs; 3,700 on Freetrade Plus
Trading 212 (Invest & ISA Accounts)
Trading 212 is the price leader when it comes to commission-free investing, with zero account fees (incl ISA), zero trading fees and zero FX fees.
They have a wide range of US stocks and ETFs – not as comprehensive as the traditional platforms but enough to meet the needs of most investors. However, unlike the traditional platforms they also offer fractional shares and ETFs, allowing you to build a diversified portfolio no matter how much money you have.
The standout feature is ‘AutoInvest & Pies’, which allows investors to set the percentage of each holding within a pie. Your deposited funds can then be invested automatically based on this allocation. It can be rebalanced with a single tap.
Investors (especially beginners) need to be careful that they don’t inadvertently sign-up to Trading 212’s CFD account. This is not free and 76% of retailer investors lose money with Trading 212 CFDs.
Moreover, the fact that the Trading 212 Invest/ISA account is free means that they are funding it with profits made elsewhere in the business (likely their CFD business). This might be a concern for some investors.
Platform Charge: FREE
Funds: Not available
Share and ETF dealing: FREE
Transfer Out fee: Free (only cash transfers available)
Range: 10,000+ global stocks & ETFs
Commission-Free App – Trading US Stocks Only
For price conscious investors. Stake offers an app-only experience specialising in US stocks.
Stake has zero platform and trading fees and offers one of the biggest ranges of US stocks available in the UK – with about 3,000 US stocks available.
Stake doesn’t offer an ISA, but the benefit of this is that you will store any uninvested money in US dollars, so you only pay the FX fee of 0.5% when depositing and withdrawing money – potentially saving you a small fortune if you trade frequently when compared to other platforms.
Stake also offer fractional investing, so you can buy any dollar amount of any share.
As well as the above, Stake have a premium version of the app called Stake Black which adds some additional analyst features – though the free version is likely to be good enough for most investors.
For new investors Stake are giving away a free stock worth up to $100 when you sign up via Money Unshackled.
Platform Charge: FREE (Stake Black $9/month)
ISA: Not available
Funds: Not available
US Share dealing: FREE
US listed ETFs: only available for sophisticated investors. They don’t offer London listed ETFs.
Transfer Out fee: withdrawal fee of $2 plus 0.5% FX fee
Range: 3,000 US stocks
Full Price Comparison Table
How to find and analyse stocks?
Here at Money Unshackled we believe that most investors will do best by building a diversified world portfolio using ETFs (or funds) and sticking to this strategy. However, picking stocks is arguably more fun and can give you better returns if you pick wisely.
Picking great stocks is not easy though and you have a better chance if you use a stock screener and research tool like Stockopedia. This tool isn’t free, but you can get a free 14-day trial with this link and it will also give you 25% off your membership fees.
Stockopedia isn’t cheap, so obviously if you only have a small investment pot it will be difficult to get value from it, but for those with larger investment pots it might take your investing skills up another level.
So you know…
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