Attention UK investors! Remember our massive broker comparison table? Well, we’ve rolled up our sleeves and updated it again to help you find the best online broker for you.
Cleaning up a mass spillage of Smarties with chopsticks would be less tedious. But it would not have produced a quick and easy overview of all the main execution-only investment services.
Investment platforms, stock brokers, call them what you will… we’ve stripped them back to basics for you to eyeball over a cup of cocoa and a handful of your favourite stimulants.
What’s changed with this update?
Disclosure: Links to platforms may be affiliate links, where we may earn a commission. This article is not personal financial advice. When investing, your capital is at risk and you may get back less than invested. With commission-free brokers other fees may apply. See terms and fees. Past performance doesn’t guarantee future results.
UK platform behemoth Hargreaves Lansdown has remixed its fee schedule for the first time in years. It seems even the mightiest are not immune to downward price pressure on investing charges!
Whether Hargreaves Lansdown is now any more competitive or not depends on how you use its services. The headline platform charge was cut along with trading costs for ETFs, shares, investment trusts, and gilts. But fee caps rose along with trading costs for funds.
The Hargreaves Lansdown price changes go into effect on 1 March.
Meanwhile, Freetrade has fully ditched SIPP charges for its Basic plan customers. This Basic plan looks pretty good so it could be worth a nosey.
IG scrapped its standing charge as well, and so joins Freetrade among the swelling ranks of UK brokers who don’t sting you for platform fees or trading commissions – just so long as you can avoid the lure of its more exotic temptations.
If zero fees make you queasy then Interactive Investor looks very competitive for flat-rate SIPPs now it has cleaned up what was one of the most bewildering fee schedules in the industry.
Meanwhile Scottish Widows (formerly iWeb) is keenly priced for GIAs and stocks and shares ISAs, so long as you trade as rarely as a camel drinks water.
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 we 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 websites 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.
On that basis we’ve updated our ‘Good for’ column as below.
Commission-free brokers
- InvestEngine, Freetrade, Lightyear, Prosper, Trading 212, and IG
These are commission-free brokers. It’s always worth looking at a commission-free broker’s ‘How we make money’ page because – rest assured – they will be earning a buck, one way or another.
Just search that topic on their websites.
If you find commission-free brokers unsettling, then stay under the FSCS £85,000 investor compensation limit or use a broker that charges fees directly. You’ll find some very competitive offers in our table.
Prefer paying directly?
ISAs and GIAs
- Scottish Widows
SIPPs
- Vanguard up to around £60K portfolio value
- Interactive Investor £60K – £100K
- Fidelity and AJ Bell £100K+ (ETFs only, not funds)
The best choice for you depends on how often you trade and the value of your accounts, plus your personal priorities around customer service, family accounts, flexible ISAs, multi-currency accounts, and so on.
Our ‘Good for’ choices are purely cost-based. We assume 12 buy and four sell trades per year. Buy trades use a broker’s regular investing scheme when available.
Using the full table
We divide the major UK brokers into four camps:
- Flat-fee brokers – these 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 a large portfolio then you definitely want to look here. 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 this would amount to a fee of £3 – but on £1 million you’d be paying £3,000. Small investors should generally use percentage-fee brokers. However even surprisingly moderate rollers are better off with fixed fees. Many percentage-fee brokers offer fee caps and tiered charges to limit the damage.
- Commission-free brokers – these upstarts apparently don’t charge you at all. Their marketing departments have it easy, simply pointing to £0 account charges and trading fees costing diddly squat. So why don’t these firms go bankrupt? Because they make up the difference using other methods. Revenue streams can include higher spreads, no interest on cash, and cross-selling more profitable services.
- Trading platforms – brokerages that suit active investors who want to deal mostly in shares and more exotic securities besides. Think of noob-unfriendly sites like Interactive Brokers, Degiro, and friends.
Our table looks complex. But choosing the right broker needn’t be any more painful than checking it offers the investments you want and running a few numbers on your portfolio.
Help us find the best online broker for all of you
Our table’s ongoing vitality relies on crowd-sourcing.
We review the whole thing roughly every three months. But it can be kept 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 looking to find the best online broker.
Take it steady,
The Accumulator
