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Two ways to help you find the best online broker or investment platform

Painting: Two friends compare their investments.

Working out the best online broker or platform1 to use in your investing can be frustrating.

Just when you have got your head around shares versus funds, corporate bonds versus James Bond, and you’re finally ready to start investing, you discover dozens of different brokers to choose from.

All have their own similar-but-different fee structures.

We have long kept track of the different broker platforms and what they charge via our fee comparison table.

But comparing the charges levied by say Hargreaves Lansdown with those of Interactive Investor can be fiddly work.

Details matter. Some brokers charge lower fees for trading but sting you with high withdrawals fees. Others offer cheap trading, but make additional annual charges for each different kind of account you open with them – once for an ISA and again for a SIPP. There may be entry and exit fees, too.

You also need to compare fixed annual platform fees – for instance £15 a quarter – with the alternative method of levying a percentage fee – say 0.25% year – on your investment pot. Which is more cost effective for you?

What’s more, the winner of this equation will probably change as your nest egg grows! You’ll need to run the numbers every few years to keep your costs as low as possible.

Get tooled up to compare investing platforms

If you find all this fun then you’re in the right place. We’re investing nutters around here.

But most people frankly do not.

Out in the wider world, people use interactive tools to compare things like insurance products and energy bills.

Well, that is now possible with investing platforms, too.

We’re hosting an interactive comparison tool created by our partners at Broker Compare. We hope it will help casual investors get their money onto a suitable investment platform with a lot less hassle.

In fact anyone who wants to hone in fast on the best potential brokers will find it a quick way to generate a shortlist of candidates.

True, if you want to work out precisely what you’ll pay – in your specific situation – you’ll always need to do the sums for yourself.

There are just so many quirks out there, and any tool needs to make a few assumptions. Only you know exactly how you plan to invest and why.

But for many people, getting a good idea of the best platform to use quickly is the most important thing.

They’d rather know approximately what they’re going to be charged than laboriously figure out the exact costs from a dozen or more competitors.

Compare the brokers and save hundreds of pounds

Monevator regulars love to debate the minutia of different platforms with all the passionate enthusiasm of trainspotters arguing about the best non-standard railway gauges found in the wilder mountainous regions of Europe.

And long may that continue. (You’re among friends here.)

But the average person has little idea of their broker’s fees – or how what they’re paying compares to the competition.

For these people, five minutes with a comparison tool could be a quick way to save hundreds or thousands of pounds.

So what are you waiting for?

Note that just as with the price comparison websites we all use to compare energy bills or mortgages, Monevator may receive a payment from a broker that you visit or sign-up with via the table or tool. This does not affect the fees you pay – it’s made by the company to us for introducing you to their business.

Happy hunting – and let’s save some money!

  1. We tend to use the words ‘broker’ and ‘platform’ interchangeably. A broker is a stock broker – a person or company who trades and holds investments on your behalf. The platform is their website that lets you see and adjust your investments. []

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{ 14 comments… add one }
  • 1 vanguardfan November 13, 2017, 5:10 pm

    Yes, I like it! (Once I had tried it out on my PC – the interactive bits don’t work on an iPad, which is a shame, as I tend to do most ‘shopping’ and browsing on the iPad).
    I noticed the description of iWeb talked about a 0.25% capped fee, which isn’t correct. Doubtless one or two other glitches to be ironed out.
    But otherwise, its really easy to generate a shortlist, and to play around with the key variables. Fantastic accompaniment to the broker table.
    Also, is it really true that Hargreaves Lansdown don’t charge anything for a trading account invested all in ETFs, apart from trading and exit fees? That was the main revelation for me, and if true might even get me to dip a toe in the water. Otherwise, my broker choices are all still reasonably cost-effective, which is reassuring.

  • 2 The Rhino November 13, 2017, 5:47 pm

    That is true about HL. No holding fee for shares, ETFs, ITs in a taxable account. They attempted to charge for ITs post RDR but quickly backed down

  • 3 FI Piper November 13, 2017, 6:19 pm

    One thing I’d love to see getting a more attention in the broker comparison table (and in this new fancy tool) is the somewhat criminal FX charges (usually a percentage of the transaction) levied by brokers. It really is a significant cost factor. It applies to dividends you get on most Vanguard ETFs (many of which pay their dividends in USD, even if you bought the GBP denominated one), and it also applies if your a bit more of an active trader for overseas (i.e US) stocks. As a consumer I can access FX services at the interbank rate (i.e 0% charge) from the likes of Revolut (but limited to about 5k a month) or at 0.5% from the likes of transferwise.

    How then do brokers get away with charging 1-1.5% on FX? Interactive investor is about 1% and iWeb charge 1.5%. Which, assuming you buy and sell your US share – eats up to 3% of your transaction cost.

  • 4 tony bage November 13, 2017, 7:14 pm

    Entered mine and yes iWeb came up, which i have BUT the tools is returning incorrect figures for fees.

  • 5 The Rhino November 13, 2017, 7:17 pm

    @FIP that’s interesting. Is it the base currency of the etf you have to look for on the fact sheet? i.e vuke gbp but vhyl usd? Do you get hit up on the initial purchase, the dividends and the eventual sale?

  • 6 FI Piper November 14, 2017, 9:59 am

    @Rhino – so taking VHYL as an example – the base currency is USD, and assuming you bought the following SEDOL: B9FH310 (VHYL.L on Reuters), which is its GBP denominated variant quoted on the LSE.

    Your purchase and sale of the ETF are fine as that transaction is in GBP – so no FX fees necessary there.

    However it’s the dividends of VHYL that are paid in USD. Assuming you hold in an ISA, your broker (interactive investor in my case) will automatically convert those USD to GBP (with FX conversion Fees non-transparent from the customers point of view).

    I had to do a bit of digging and several emails to Interactive Investor before I realised what happening, and they confirmed they were charging 1% on the conversion (USD -> GBP) process. They also told me that the dividends cant be left in dollars as ISA funds must be stored as GBP.

    It’s certainly not a transparent fee and the average Joe is unlikely to spot it.

    It also means its uncompetitive to hold US individual shares in this ISA. At 2% for purchase and sale, it eats into your gain significantly, and is a large transaction cost. Depending on your holding period and expected gain, its a deal breaker.

    More competitive providers such as Degiro charge no fees on FX, and you actually get the interbank rate. Thus I think its something that should get a bit more attention on comparison tools and tables.

  • 7 The Rhino November 14, 2017, 11:34 am

    Good digging.

    I could prob live with losing ~1% on dividends but on purchase or sale that is definitely more problematic.

    It is fascinating. The devil is always in the detail. Why would have guessed that’s how it works?

    I had a go with the comparison tool. I think it’s good. Quick and effective method of understanding the huge difference in costs between the platforms. The input UI could be improved for sure. It could be re-jigged to make it more intuitive. Drop me an email if you want to know how that could be done. But all the work must be in the back end and that seems really good bar the odd typo and such like.

    The trick will be keeping it up to date as the landscape constantly changes.

  • 8 Naeclue November 14, 2017, 12:04 pm

    Interesting! Agree about FX fees making a large difference. Another one to watch out for those in SIPP drawdown is that Hargreaves Lansdown do not charge extra for this. Many other brokers have drawdown fees and when added in these make Hargreaves Lansdown much more competitive.

  • 9 Fremantle November 14, 2017, 2:50 pm

    Great tool, but should include options for cost of moving, e.g. Bestinvest have significant costs for in specie transfer. It gives you the future cost of exiting, but the choice to transfer is now and it the uncertainty of future cost structures reduces the value of this info. In fact, I’d go so far as suggesting that exit fees be listed for comparison, but not prorated over the the proposed life of the investment product as there are many factors that would impact the cost of exiting.

    Perhaps add a comparison table showing the total cost for staying with your current provider versus moving (including any exit and transfer fees/rebates).

    Please take the above as constructive criticism and I hope you get to see an income stream from Monevators using the service. But I suppose you can’t cover all scenarios. Help with exit and transfer fees would be good to know though.

    My SIPP is with Bestinvest and my situation recommends Charles Stanley, which could be convenient as I have an ISA and JISA with them, but with ten holdings and £25 a pop transfer fee plus exit fee of £125+VAT soon adds up to £400 up front costs. Even cashing out costs £75+VAT to transfer, not to mention the potential cost of being out of the market and then the ETF dealing fees of re-entering.

    This wipes out any benefit of transferring, especially if faff factor is considered.

  • 10 James November 18, 2017, 9:43 am

    Hi. Wow that tool was really interesting. I still just find the HL charging structure strange. When I plugged in my numbers II (who I’m with) came out £10k over 40 years, but HL was £160k! But if you drop using funds HL comes down to £15k. Have they ever explained why they do this? It’s crazy.

  • 11 Mr Optimistic November 18, 2017, 9:46 am

    @FIP. That’s interesting. Are you saying that all ETFs with a USD or non GBP base currency are subject to this fx conversion on all dividends? Sounds right and not something I had thought about. Case for non distributing shares/funds then ?

  • 12 FI Piper November 18, 2017, 4:56 pm

    Yes, in an ISA as you can’t have any kind of multi curreny account – your broker will always convert non-GBP dividends to GBP (and depending on the broker, take a slice under the banner of “FX Fees”, which they will claim to have no control over. Which, sounds like BS to me. I’m a lowly retail customer and I have plenty of excellent options for (cheaper than 1%/free) FX. To think that a broker (Interactive Investor I’m looking at you) cant get a better deal than me is bewildering.

    Non distributing funds in an ISA brings its own set of pros and cons… (mostly cons I’d think) not least of which if you want to spend any money from it at some point in the future, you’ll have to sell something! Plus you dont get to decide where your dividends get reinvested.

  • 13 Mr Optimistic November 18, 2017, 5:05 pm

    Thanks. Wonder how it will be handled in the SIPP I am about to transfer into, as cash balance in GBP same must apply. I shall enquire. Thanks again.

  • 14 Ric November 19, 2017, 1:55 pm

    Thank you for this tool, very useful.

    It did not work on my Android Device. Also I initially had a problem on my Linux/Firefox but in the end I found this was in fact a data issue; I had put 50 for “Years you will hold the account for” as I intend to hold the account forever. As a result the “Update Results” button failed to work. Returning the value to the default 10 made it all worked fine.

    I’m currently moving one of my accounts from TDW (expensive but used fro historical reasons, and now taken over by II) and had already identified IGG as my next best broker to use. The tool confirmed this choice 🙂

    I notice http://www.x-o.co.uk is missing from the broker list. They are basic but cheap, and so might be worth including as an option. I like to limit my exposure to any one broker, so need several cheap brokers. The more bargain brokers included the better! So far I use IWeb, X-O, and I’m soon to move another portfolio from TDW to IGG. I’ll be looking for a forth provider soon, to reduce my risk from any single broker.

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