Attention UK investors! Remember our massive broker comparison [1] table? Well, we’ve rolled up our sleeves and updated it again to help you find the best online broker for you.
Cutting the lawn with nail scissors would have been 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 ’em what you will… we’ve stripped ’em down to their undies for you to eyeball over a cup of tea and your favourite tranquillisers.
[2]
What’s changed with this update?
Zero-fee platform Lightyear is in. It’s getting good reviews on Trustpilot.
Chip has made the cut too. Have a shufty if you want an app that smites analysis paralysis by offering you simply ‘the best of three’ funds.
Meanwhile table stalwarts X-O and Sharedeal Active are out. They’ve been hoovered up by Interactive Investor in its seemingly relentless quest for flat-fee broker dominance.
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.
Disclosure: Links to platforms may be affiliate links, where we may earn a small commission. It doesn’t affect the price you pay nor how we judge the brokers. This article and the comparison table are not personal financial advice. Your capital is at risk when you invest.
Beginners
- InvestEngine [3] for ETFs. (Alternatively: Lightyear and Trading 212 [4])
- Prosper for funds (also has a sprinkle of ETFs)
These are zero-fee brokers [5]. It’s always worth looking at a zero-fee 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 zero-fee brokers make you feel queasy then stay under the FSCS £85,000 investor compensation limit [6] or use a broker that charges fees directly. You’ll find some very competitive offers in our table.
Beginners who prefer direct fees
Established investors with portfolios worth £85,000+ / prefer to pay direct fees
- Freetrade [9] for ETFs. (Alternatively: Halifax/iWeb. SIPPs: Interactive Investor [10], Fidelity [8], AJ Bell [11])
- Lloyds for funds. (Alternatively: Vanguard. iWeb if you hardly ever trade. SIPPs: Interactive Investor [10]. N.B. Lloyds, iWeb and Halifax are the same firm for FSCS protection purposes.)
The best choice for you depends on how often you trade, 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.
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.
- Zero-fee brokers – these fresh 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 [5]. 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 [12], Degiro, and friends.
Our table [1] looks complex. But choosing the right broker [13] needn’t be any more painful than checking it offers the investments you want and running a few numbers [14] 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 [15] 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 [1] table has become an invaluable resource for UK investors looking to find the best online broker.
Take it steady,
The Accumulator