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Our updated guide to help you find the best online broker

Okay, UK investors, after taking the pain of creating a whopping great comparison guide to the UK’s leading online brokers, we’ve once again returned to the battlefield to fully update it.

Eating a bag of rusty nails water would have been more fun, but it would not have produced a quick and easy overview of all the main execution-only investment services.

Fund supermarkets, platforms, discount brokers, call ’em what you will – we’ve stripped ’em down to their undies for you to eyeball over a cup of tea and your favourite tranquilizers.

Online brokers laid bare in our comparison table

Who’s the best broker?

It’s impossible to say. There are too many subtle differences in the offers. The UK’s brokers occupy more niches than the mammal family, and while I know which one is best for me, I can’t know which one is right for you.

What I have done is laser focus the comparison onto the most important factor in play: Cost.

An execution-only broker is not on this Earth to hold anyone’s hand. Yes, we want their website to work, we’d prefer them to not screw us over, go bust or send us to the seventh circle of call centre hell… These things we take for granted.

So customer service metrics are not included in this table. It’s purely a bare-knuckle contest of brute cost for services rendered.

Why should investors flay costs as if they were the tattooed agents of darkness? Because if – as the FSA predicted – you will see an annual after-inflation return of 2.5% on your portfolio for the next decade, then the last thing you need is to leak another 1% in portfolio management charges.

This makes picking the best value broker a key battleground for all investors.

Using the table

I’ve decided the main UK brokers fall into three main camps. These are:

  • Fixed fee brokers – Charge one price for platform services regardless of the size of your assets. In other words, they might charge you £100 per year whether your portfolio is worth £1,000 or £1 million. Generally, if you’ve got more than £25,000 stashed away then you definitely want to look at this end of the market. Bear in mind that fixed fee doesn’t mean you won’t also be tapped up for dealing monies and a laundry list of other charges.
  • Percentage fee brokers – This is where the wealthy need to be careful. These guys charge a percentage of your assets, say 0.3% per year. For a portfolio of £1,000 that would amount to a fee of £3. On £1 million you’d be paying £3,000. Small investors should generally use percentage fee brokers, but even surprisingly moderate rollers are better off with fixed fees. Many percentage fee brokers use fee caps and tiered charges to limit the damage but the price advantage still favours the fixed fee outfits in most cases.
  • Share dealing platforms – Platforms that suit investors who want to deal solely in shares and ETFs. Sites like X-O and friends fill this brief.

Choosing the right broker needn’t be any more painful than ensuring it offers the investments you want and then running a few numbers on your portfolio.

The final point you need to know is that this table’s vitality relies on crowd-sourcing. I review the whole thing every three months, but it can be permanently up-to-date if you contact us or leave a comment every time you find an inaccuracy, fresh information, or a platform you think should be added.

Thanks to your efforts as much as ours, our broker comparison table has become an invaluable resource for UK investors.

Take it steady,

The Accumulator

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{ 206 comments… add one }
  • 101 Ivan March 22, 2015, 10:13 am

    This website is marvellous and next week I’m going to read Tim Hale. I have a portfolio with a wealth co. ( one of the big ones) fees are high but have started to see a good return at last . I’m not putting any more money their way though, instead DIY’ing my annual ISA. As I’m retiring in 5 years, going for the Vanguard LS 40/60. A question: is there any need to look for another similar product to invest my annual ISA or is there enough diversification in this fund for me not to worry. If I ‘m not sure whether i need to dripfeed and who i do this with.

  • 102 The Accumulator March 22, 2015, 7:54 pm

    Hi Ivan,

    LifeStrategy is an extremely well diversified fund and there isn’t really another product that matches it. The only reason I’d look for another fund is if you want to diversify the risk of something happening to Vanguard.

    They are the biggest fund manager in the world and reputable, so the risk is small but not non-existent.

    See: http://monevator.com/investor-compensation-scheme/

    I’m not sure I’ve understood your question about drip-feeding but I think this might help: http://monevator.com/lump-sum-investing-versus-drip-feeding/

    Broker / platform options here: http://monevator.com/compare-uk-cheapest-online-brokers/

    Non-Vanguard funds-of-funds here: http://monevator.com/passive-fund-of-funds-the-rivals/

  • 103 gadgetmind May 21, 2015, 10:01 am

    A lot of traditional pension funds have a multi-asset approach similar to LifeStrategy. Some even have low fees, and some even use trackers as the core of the investment. For example, Friends Life have “Balanced Index Fund of Funds” that uses active asset allocation on top of (mostly) Blackrock trackers, and there is an “Enhanced” version that uses active funds in some less efficient areas. I’m currently paying 0.4% in fees for holding the latter fund in my company pension, which is very competitive with LifeStrategy held in most SIPPs. I’m a fan of SIPPs but for many people a personal pension will be able to deliver the goods.

  • 104 Robert May 21, 2015, 10:53 am

    Great and fascinating read through the tables rating, although I was a little surprised at the results for TD Direct Investing (the guys my ISA is with). I have a relatively modest portfolio (over £50k), but it costs me only my share or ETF trading rates – I would have thought this would have made it suitable both for ETF but also for Share Only infrequent ones (such as myself)? I think my charges come in at around 3 trades per year (maybe less), and the auto dividend reinivest. Looking through the table I think I need to investigate iWeb!

    Thanks for taking time to put the comprehensive list together!

  • 105 Mathmo May 21, 2015, 12:50 pm

    I have a TD Direct account — I find the regular investing options waaay too restrictive compared with – say – iii.co.uk

  • 106 Robert May 21, 2015, 1:06 pm

    @Mathmo – I know what you mean the regular is restrictive but I dont drip feed I fund and choose what and when to buy…

  • 107 Mathmo May 21, 2015, 3:27 pm

    Yes so do I, although I value the ability to reduce my trading costs by going for monthly buys on lower value rebalancing.

  • 108 passivefan May 21, 2015, 9:03 pm

    I am resident abroad and could not convince a UK-based broker to take me on. So I went for a US broker, and the one I opted for and the others I looked at all seem to be much cheaper than their UK equivalents. No platform fees, no inactivity fees, etc, just dealing fees (around 8 to 12 dollars a go), though I think maybe they have exit fees. Any idea why it is so much more expensive in the UK?

    Fantastic website by the way

  • 109 Nick May 22, 2015, 11:03 am

    @gadgetmind
    Not really the place for a discussion about this, but your comment about Friends Life funds is so close to what I’m trying to puzzle through at the moment. I’ve realised that the “stick a pin in the list” approach that I took to selecting funds in my FL company pension approx 10 years ago perhaps wasn’t the best option… I’m looking to shift my allocation to something more sensible and slowly trying to work out how to pick from the limited selection of funds on offer.

    I rejected the FL balanced fund of funds due to its odd geographic allocation (~30% UK, 15% US, 15% Europe, + others) and its rather vague stated aim. Instead I’m favouring a Blackrock World (Ex-UK) equity index, together with the corresponding UK equity index. Still need to check whether the world index covers emerging markets, and also find something in UK govt bonds.

    However… with the limited set of funds on offer, but the benefit of matched contributions from my employer, and a fixed charge for any of the funds (so there’s no cost advantage of one over the others), I’m not sure whether an over-analytical approach is really worth it.

  • 110 gadgetmind May 22, 2015, 11:32 am

    I agree regards the geographic mix on that fund, but such a “home bias” is very deliberate. As it happens, I did initially “dilute” this by also holding that Blackrock tracker alongside, but I’ve now switched again given the rather high valuations in the US. I will admit to still holding a Blackrock EM tracker, which you might like to consider

    April 2014 to April 2015 my return from my mix on FL was 14.7%, which isn’t to be sniffed at! It’s very close to the 15.5% I achieved in my SIPP.

    BTW, LifeStrategy also has quite a high home bias, or did last time I checked.

  • 111 Lostpupp May 25, 2015, 5:13 pm

    The link to the broker table seems broken to me:

    http://monevator.com/compare-uk-cheapest-online-brokers/

  • 112 The Investor May 25, 2015, 5:53 pm

    @Lostpupp — Thanks, it is being weird at the moment… is it working for you now?

  • 113 Lostpupp May 31, 2015, 10:31 am

    @The Investor – Yes, working now.

  • 114 The Investor May 31, 2015, 10:58 am

    @Lostpupp — Cheers!

  • 115 Ron September 2, 2015, 12:02 pm

    Thanks for the update to the table – an excellent resource.

    For various reasons, I’m looking at moving from having a private bank handling the bulk of my investments to a diy approach.

    I was surprised to find that the FSCS limit for stocks and shares compensation is £50,000.

    I understand the separation that is usually applied to nominee accounts and the protection that this is supposed to give.

    However, in the circulstances that a broker is going bust it’s quite likely this would be a time that the separation might not be all that was expected!

    Should I be looking to limit my investments with any one broker to no more than £50,000?

  • 116 EUGB September 2, 2015, 12:23 pm

    Please note that Vanguard do not provide accumulating ETFs similar to ishares SWDA / IWDA and therefore attract extra dividend distribution taxes in euroland. These can easily add 25% to the TER 🙁

  • 117 The Accumulator September 2, 2015, 8:31 pm

    @ EUGB – could you provide more details, please. I haven’t heard of that problem before.

    @ Ron – it’s a very personal decision. This is my best stab at summing up the situation: http://monevator.com/investor-compensation-scheme/

    Ultimately, I do think it comes down to preference. Are you the sort of person who’s prepared to deal with the hassle factor of multiple accounts in order to sleep better at night?

    Diversification is always good at some level, but I personally wouldn’t set that level at every 50K.

  • 118 EUGB September 2, 2015, 9:13 pm

    Dividend distribution taxes for non-accumulating ETFs occurs when emigrating from the UK to some of the other EU countries (BE, GER, Por ..) where ISAs and SIPPs scheme equivalents do not exist and thus non-equity financial products (typically less than 75% equity) are then subject to extra taxes annually at 25% plus.
    One solution is to invest in accumulating ETFs in the UK and avoid this future problem at a later date (or not emigrate 🙂 )

  • 119 Ron September 2, 2015, 10:30 pm

    Re compensation: Thanks for your thoughts and your very useful earlier post – food for thought!

  • 120 Jas December 5, 2015, 10:50 pm

    Am I right in thinking that buying a fund (which has £0 trading cost) in Selftrade will count as a trade and therefore will waive the quarterly inactivity charge?

  • 121 winker December 7, 2015, 10:35 pm

    I’ve just bought LS100 in Selftrade in an ISA and was going to ask the same question? If anyone can answer that would be mega. Looks like their minimum is 1 unit as i couldn’t buy £100 worth but it let me do £150.

  • 122 Mr Careful February 11, 2016, 5:11 pm

    Does anyone else have trouble with their broker when it comes to them paying dividends in a timely manner ? I have been using alliance trust for a few years, however, they have recently become very erratic paying out the dividends for funds (FTSE companies on their own seem to be fine). It isn’t unusual to have to wait over a month after the payment date from the fund. Doesn’t give me much confidence that if I wasn’t sending them emails asking why they are late paying maybe they wouldn’t pay it at all? Does anyone else have similar experience with any other brokers?

  • 123 Tyro February 11, 2016, 9:37 pm

    @ Mr Careful – a month is really excessive. I’m with 3 different brokers/platforms and only occasionally have to wait more than a day or two after the published ‘payable’ date and then it’s usually on the same etfs (e.g. IDVY always seems to be late, for some reason) and I’ve never had to wait more than a fortnight. Halifax Share Dealing say they are allowed to pay up to 10 working days beyond the published pay date, but whether that’s just an in-house rule or whether it’s some kind of industry-wide requirement I don’t know. If one of my brokers started paying dividends very late (and even more if they did it frequently) I would wonder whether their systems were in meltdown, or whether they were in such financial dire straits that they were clinging on to any money coming in for as long as possible. I’d take either as a big red warning sign ….

  • 124 Mr Careful February 12, 2016, 12:41 am

    @Tyro – Appreciate the response. I’ve used different platforms over the years and never had a problem. Really does seem like it is just Alliance Trust. Whenever I call them to chase a late dividend, they always claim they have only just received it late themselves and then have to “send it off” to get the currency changed to GBP which can take up to another 10 days… Likely storey… I wonder if anyone else has had a problem or noticed this with Alliance Trust ?

  • 125 Mr Careful February 12, 2016, 12:55 am

    As an example… VHYL… Vanguard paid dividend at the end of December 2015…. Alliance Trust paid it to me on Feb 5th 2016… Over 2 months late.

  • 126 weenie February 12, 2016, 12:35 pm

    @Mr Careful – I hold my VHYL with AJBell YouInvest and that dividend was paid into my account on 29th December.

  • 127 Tyro February 12, 2016, 7:07 pm

    @ Mr Careful – HSBC paid my VHYL divi on 31st December.

  • 128 Alan p February 12, 2016, 8:34 pm

    Same as you weenie.. I find you invest pretty good for my Sipp. I use Td direct for my Isa and this is a bit more restrictive / painful…ps td direct maybe selling out to Barclays (yuk) .. Now to the article at hand … I love this website and find this table useful

  • 129 The Investor February 13, 2016, 9:35 am

    @Mr Careful — Those numbers from weenie and Tyro do suggest your platform needs to pull its finger out. As has been said, I’d be concerned what I’m missing…

    @Alan — Cheers!

  • 130 Planting Acorns February 13, 2016, 3:07 pm

    @all… I’m fund only…infact, non-etf fund only…

    Currently small investor, hope to be less so…maybe break the 20k ‘barrier’ in 2/3 years… Why is charlesstanley (who I’m with) cheaper than self trade…self trade looks free as long as you don’t sell? Or am I totally misreading the table?

  • 131 grey gym sock February 14, 2016, 5:33 pm

    selftrade is indeed free, so long as you don’t sell and you do buy at least once every quarter (to avoid the inactivity fee). which is fine, even for a small amount invested, if you definitely will buy every quarter.

    note that they don’t have many funds available for automatic monthly investment, so you may need to make the purchases manually. (though you could still have cash added to your account automatically by direct debit.) and if you’re buying vanguard lifestrategy, the minimum purchase appears to 1 whole unit (which is something like £150).

    1 way to look at it: suppose you stop adding money to your account at some point, because you have other priorities in life. then you’d start paying selftrade £42 a year in inactivity fees. instead of paying charles stanley 0.25% a year. in which case, selftrade would be more expensive if you have less than £16,800 invested.

  • 132 Planting Acorns February 14, 2016, 6:54 pm

    Thanks very much gym sock , something to think about…

  • 133 hosimpson February 14, 2016, 10:07 pm

    A few notes on Halifax Share Dealing SIPP. The fee structure is transparent and not too dear, but there are a few quirks.
    1) Their default method of accepting irregular (i.e. non-direct debit) contributions is a cheque by post. They have a workaround of a bank transfer + scanned contribution form via email, but then you still have to post the form later. Even using this workaround in my experience the time lag between transferring the money to their bank account and the money becoming available for investment is on average 3-4 working days.
    2) The fund appear in your account net, then the 20% tax 6 weeks later. They will not even being the process of recovering the tax until the original contribution form arrives by post (see above). They say the recovery of tax takes up to 6 weeks, but in my experience it’s been 6.5 and once even 8 weeks.
    It’s not a massive problem for me given how I use my SIPP, but it will not suit everyone. You have to be a *passive* investor through and through in order to stomach a 6+ week delay … unless you’re happy to pay their dealing fee twice – once when you invest your net contribution and once again when you invest the tax component several weeks later.

  • 134 Planting Acorns February 15, 2016, 11:14 am

    Hey @ sock….

    Think I’m going to stick Charles Stanley…think it’s worth the extra to set it up on monthly buy and discipline myself to just check once a quarter… Plus I’ve read lots of very poor reviews about self trade…

  • 135 martin February 15, 2016, 11:26 am

    Just to be clear. AFAIK selftrade isn’t free. Its a minimum of £6 a year if using their regular investment to purchase something.

    If you just “bought” funds there would still be an inactivity fee as the funds are “free” to buy and don’t count towards activity.

  • 136 Planting Acorns February 15, 2016, 5:14 pm

    Thanks Martin…makes the decision easier although was veering away from them anyway cheers

  • 137 Baby Boomer in Croydon February 16, 2016, 11:41 pm

    Lets not forget the ways, and there are many. of how our fund managers and no doubt platform managers spend our money.

    How does this increase the value of my investments?

    Press release Quote:

    Ascot Racecourse and Neptune Investment Management are delighted to announce the extension of Neptune Investment Management’s horseracing sponsorship portfolio by backing two races at Ascot; one over hurdles and one on the flat.
    The Neptune Investment Management Novices’ Hurdle, over a distance just short of two- and-a-half miles, will be run on 16th February for £25,000.
    Conditions for the second race are being finalised but it will be a £50,000 event for three- year-olds over a mile-and-a-half, on Saturday 13th July.

  • 138 NearlyThere February 17, 2016, 7:01 pm

    @Mr Careful, Hargreaves Lansdown show VHYL as paid 29th and cleared on 30th December (if I’m reading my statement correctly). Where’s the currency conversion on VHYL? There are Euro and CHF versions, but why would you/they hold them? (The other currency option is called VHYD).

  • 139 Silvan Schumacher February 18, 2016, 9:50 am

    Great overview indeed. However, narrowing the comparison down to the costs is certainly interesting, but neglects other important factors such as:

    – customer service
    – user experience / innovation
    – quality of investment advice

  • 140 The Investor February 18, 2016, 10:01 am

    @Silvan — We can only do so much in a table, as you’ll appreciate, and even costs are murky enough to compare in this sector. 🙂

    To take your other three factors:

      Customer service — Once above the bare minimum of “they get it done” not so important for long-term passive investors with automatic saving and investment plans. They are our main focus here. Can be more important for active traders, I’d agree, but very wide range of possibly subjective reports makes evaluating it properly beyond our current resources. Customer service similarly important when doing something “big” like transferring ISAs, but again feedback from readers suggests this is something of a lottery, although some platforms do seem to me better than others.

      User experience / innovation — Generally bad for long-term investors. The ideal broker’s website would probably look like a GeoCities page from 1997, be horrible to spend time in, and thus minimize trading activity. 🙂

      Quality of investment advice — The least relevant factor. Best to mainly read Monevator or other independent sources instead of platforms who either want to sell you active funds or encourage you to trade. As for wealth managers and the like, who wants to pay 1% a year for a fancy posh bloke to explain how your pension will be better if you give him 1% a year? There’s a role for Independent Financial Advisors, I think, but independent from platforms.

    Just my view, of course, yours may differ. 🙂

  • 141 Mr Careful February 20, 2016, 9:32 am

    Thanks all for feedback on brokers speed of paying dividends fast/slow. Seems like Alliance Trust are the worst I can find who are not paying dividends early. Just to round it off, check out this appalling customer service email reply (I was chasing a dividend payment that was due 19th Jan. 2016 sent my email on 16th and got this reply on 18th)

    “Thank you for your email.

    I have discussed this issue with the Dividends Team today who have advised that as this particular investment pays dividends out in foreign stock it can take some time for the registrars to convert the funds into Sterling. Therefore we cannot credit your account until we have received the funds in Sterling stock.

    Unfortunately we do not have a timescale for this, however I will email you personally once they payment has been received and has been applied to your account. ”

    Appalling. Avoid this lot like the plague

  • 142 Mr Careful February 20, 2016, 9:34 am

    Just for clarity… My email was sent on 16th February, so the dividend was already nearly a month late…

  • 143 grey gym sock February 22, 2016, 6:33 pm

    on whether free purchases of funds with selftrade count as trades to avoid their inactivity fee, there are some new comments under the actual broker table. from that, is suspect they do count, but selftrade are not making it very clear.

    many ETFs, such as VHYL, do pay dividends in dollars, *even* if you buy the version traded in sterling. i.e. the currency they’re traded in is not necessarily the same as the currency they pay dividends in. and other pays dividends in euros. a delay of 1 or 2 days, for your broker to convert the dividend into sterling, is reasonable, but not for several weeks.

  • 144 Davethehedgehog March 6, 2016, 8:33 am
  • 145 James May 3, 2016, 5:01 pm

    Great work, but this table really needs to include FX charges. This is particularly true for ETFs where they could be in another currency, or the declared dividends could be in another currency.

    These charges can be huge and any investor should pay particular attention to them when selecting the right platform.

  • 146 Naeclue May 4, 2016, 12:20 pm

    @Mr Careful, to put it bluntly, you broker is lying to you. Mistakes are one thing and acceptable if promptly rectified without loss to you, but being lied to is totally unacceptable. I would suggest you either confront them and put in a formal complaint and demand a free transfer to another broker, or just change brokers. Sometimes brokers offer to cover some or all of the transfer costs. You might find this link helpful if you want to go down the formal complaint route:

    http://www.fca.org.uk/consumers/complaints-and-compensation/how-to-complain

    @NearlyThere “Where’s the currency conversion on VHYL?” The currency conversion is from US dollars (in this case) to pounds in your account. Your broker will levy a foreign exchange fee to do this, which you may need to look into the small print to find. Buying the sterling denominated version of VHYL, or any other ETF, does not alter the currency that dividends are paid in.

    @James, I agree with you that FX charges are something to be considered, but The Accumulator cannot include everything and for fund only investors, the charges are irrelevant. Definitely worth looking into for ETF investors.

    Another set of charges worth considering are SIPP drawdown charges for those in or close to drawdown. These can significantly alter the calculations. I am with Hargreaves Lansdown, who are far from the cheapest in the table, but they levy no drawdown charges at all. I really appreciate this as it means I can take whatever income I want, whenever I want to without having to consider the costs. HLs charges are very reasonable provided you avoid funds, trade infrequently and just invest in ETFs and gilts, as I do. I would add that the service is excellent as well.

  • 147 James May 4, 2016, 1:10 pm

    @Naeclue Interesting comments but am I right in thinking that you will be paying for FX charges on any dividends with HL and this is up to 1.5%. Presumably you have costed it and this charge doesn’t outweigh the other benefits for you?

  • 148 Naeclue May 4, 2016, 3:07 pm

    @James, HL’s 1.5% FX fee is annoying, but they cap their standing charge at £200. I had a look at YouInvest who only charge 0.5% FX fee, but their standing charges are higher for people in drawdown. I hold some iShares ETFs which are accumulating instead of dividend paying and that reduces the fees a bit. YouInvest may work out cheaper for me over all, but not sufficiently so at the moment to make me move.

    I have been with HL for years and so far my experience with them is that charges have been reduced over time, such as for buying gilts and scrapping drawdown fees, rather than increasing as with other brokers. I cannot remember how long the standing fee has been capped at £200. Certainly a long time.

    Sometimes it is better to stick to the devil you know, especially when you hear stories like those from Mr Careful. I would not want my SIPP to be looked after by whoever he is with.

  • 149 LegalBeagle May 4, 2016, 3:46 pm

    I’m with Charles Stanley but approaching the point where it may make sense to switch to a fixed fee provider. However, my reading of the table is that there is a dealing fee for funds each time units are acquired. This means that drip feeing in money every month becomes very expensive. Is that right? Currently no charge with CS for me to do this.

  • 150 The Accumulator May 4, 2016, 6:08 pm

    @ Naeclue & James – great points both. I’m painfully aware that the table is extremely complicated already (many people just can’t deal with it) and I’m very reluctant to put in any more columns for that reason. I think what I’ll do is reference these issues in the copy that accompanies the table so that people are made aware and can investigate further if they’ve got the energy left to do so!

    @ Legal – yes, that’s the trade off for the flat rate fee. Solutions are: use regular investing schemes so you only pay £1.50 a pop. Use fewer funds e.g. Vanguard Life Strategy. Invest quarterly or on a more ad hoc basis when you’ve got a bigger sum together.

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