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.
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 FCA 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
@ Mr Optimistic – Unrestricted means the platform doesn’t limit your product choice in the way that, say, Vanguard and HSBC does. I see I haven’t updated the notes underneath the table so I need to do that. Also, Unrestricted may not be the best choice of words as every platform has its limitations somewhere along the line. Any feedback on this would be great. I need a word that alerts people to platforms that limit your choice to:
a) their products only e.g. Vanguard
b) a quite limited list of products e.g. HSBC, Fidelity / Freetrade / Trading 212 ETFs.
Yes, ii are unrestricted but they currently don’t get the nod in terms of ‘best buy’ platform so I don’t mention it. Same with all other platforms that don’t fit my ‘best buy’ criteria.
@ Snowman and Algernond – thank you for the tip offs!
@ Merlotman – you can do better! Especially if you trade a fair bit. But I’m sure you have bigger fish to fry given your cost base.
@ Andy and Ken – HL don’t support two-factor authentication which is surprising.
@ Ince – take a look at Vanguard and Cavendish and others near the top of the percentage fee table.
@TA. Thanks for that. For a sipp portfolio above £50k ii still looks ok compared to say iweb.
Disappointed to discover Fidelity don’t offer a stop loss on SIPP investments. I assume the same in other accounts.