Compare Best Investment Platforms 2021
Choosing the right investment platform for your savings can be daunting. Today’s investor in 2021 has a lot of options to choose from.
What the right platform is for you will depend on your requirements.
What is an investment platform?
If you want a wide range of food options when you shop – typically you will go to a supermarket.
The online “investment platform” is your supermarket. It’s where you can hold your ISAs, Self Invested Personal Pensions (SIPPs) and other investments in one convenient place allowing you secure online access 24/7.
Why do you need one?
You don’t have to use a platform to manage your investments: you could be old-school and contact fund managers or a stock broker directly to buy and sell investments. This often involves lots of paperwork and waiting for the postman to send you paper statements which for some people may be perfectly adequate.
You will typically need to deal with a real person to make anything happen which can make this way of operating cumbersome and more expensive. With advances in technology investors now have significant choice in how their money can be managed online.
A plethora of online investment platforms have sprung up because it’s easier and cheaper to manage your investments this way:
- You can hold all your tax efficient investments such as ISAs and SIPPs in one place: including lifetime ISAs, right to buy ISAs and junior ISAs
- Plus any other fund holdings or shares that you’re trading outside of a tax-free environment, from a general trading account
One place to go, one password, one tax statement…
How do you choose an investment platform?
The services offered by the different types of platforms vary widely, and so do the costs.
And this isn’t a chop-and-change decision that you’ll revisit every year or so it is important to select the right provider for you:
Amongst the most popular platforms…
- Annual platform charges range from zero to 0.45% of portfolio value – AJ Bell up to 0.25% pa, Fidelity up to 0.35% pa and Hargreaves Lansdown up to 0.45% pa
- Fixed fee platforms – Interactive Investor offer a fixed monthly fee platform at £9.99 pm so for larger portfolios you may save money in the longer run
- For share trading platforms charge from zero or £1 per transaction to £12.50 per transaction – depending on the size of your portfolio and how frequently you’re trading
Top 10 criteria you’ll want to consider:
1. Do you already have an idea of the investments you want to invest in?
If you are looking to trade shares only then a platform that offers low cost dealing fees may be a priority. A number of platforms offer advanced research trading tools to entice you to them.
Or you may want buy foreign shares (not all platforms cater to this) or trade in ETFs (exchange-traded funds – usually tracking an index).
If you are more interested in collective funds then this again may determine who you go with. Charging structured for funds held on the platform will vary. Over time the impact of such charges can be significant.
2. Do you want to manage your own ISA investments, or have someone else do it for you?
Your answer to this will depend on:
- How confident are you about investing?
- Will you enjoy getting underneath the bonnet?
- Do you have enough time to be an active manager?
- Would you mistrust someone else making these decisions on your behalf – or have more confidence in their market knowledge than your own?
You can choose from:
Do it with me platforms and Do it for me platforms
Many platforms offer both. Catering for first time investors through suggested fund options or strategies through to experienced investors where the focus is on providing advanced tools to allow independent decisions.
You get a range of active investment management, from advice and assistance to completely hands-free:
Platforms that do both:
See below 4 of the largest platforms in the market:
Invest From
Any lump sum or £25 per month
Fund Choice
2,500+ Funds
Annual Platform Fee
From £4.99 pm per account
ISA & SIPP Options
Pay no account fee for 6 months when you open an ii ISA. No minimum deposit required. Offer ends 31st December.
Capital at risk. Terms & trading fees apply. New customers only
Why we like it: Interactive Investor charge an account fee of £4.99 pm. For share dealing – Competitive charges of £3.99 per UK & US deal online. With this flat fee structure unlike other platforms which charge a annual fund based value % fee – over time particularly for larger fund holdings ii’s fee structure can provide cost savings. Capital at risk.
Important information: The value of investments can go down as well as up so you may get back less than you invested. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser. Tax treatment depends on individual circumstances and all tax rules may change in the future.
Pay no account fee for 6 months when you open an ii ISA. No minimum deposit required. Offer ends 31st December. Capital at risk. Terms & trading fees apply. New customers only
Why we like it: Interactive Investor charge an account fee of £4.99 pm. For share dealing – Competitive charges of £3.99 per UK & US deal online. With this flat fee structure unlike other platforms which charge a annual fund based value % fee – over time particularly for larger fund holdings ii’s fee structure can provide cost savings. Capital at risk.There are no tables for this criteria
Invest From
£25 per month
Fund Choice
2,500+ Funds
Annual Platform Fee
From 0% to 0.45%
ISA & SIPP Options
Why we like it: For share dealing – Costs a maximum of £11.95 per UK deal online. For Funds – annual service charge costs from 0.45% on value of funds invested up to £250,000. This drops to 0.25% on the value between £250,000 and £1m. This drops to 0.1% on the value between £1m and £2m. On the value over £2m there is no charge. Other charges may apply. Capital at risk.
Important information: The value of investments can go down as well as up so you may get back less than you invested. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser. Tax treatment depends on individual circumstances and all tax rules may change in the future.
Invest From
£25 per month
Fund Choice
4,000+ Funds
Annual Platform Fee
From 0% to 0.35%
ISA & SIPP Options
Why we like it: For share dealing – Low cost share dealing simple charge of £10.00 for each deal placed online. For Funds – One low-cost service fee of 0.35% which drops to 0.20% if you hold investments of £250,000+. The same service fee is charged across all of your investments. So, if you hold £300,000 – the fee would be 0.20% across the full amount, and not 0.35% on the first £249,999 and then 0.20% a year on the remaining £50,001. For Great service – from investment guidance on website through to UK-based phones team. PathFinder, Select 50, Investment Finder – investing tools for beginners to advanced investors. Capital at risk.
Important information: The value of investments can go down as well as up so you may get back less than you invested. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser. Tax treatment depends on individual circumstances and all tax rules may change in the future.
Do it for me platforms
With do it for me platforms you get an expert to do the investing for you – typically you choose how cautious or adventurous you want to be and the timescales you want to work to:
Invest From
£25 per month
Fund Choice
Funds selected for you based on risk profile
Annual Platform Fee
0.68%
ISA & Pension Options
Why we like it: For investors who want a expert plan put together for them based on timescales and investment risk profile Moneyfarm (backed by Allianz Global Investors) with over 40,000 investors across Europe offers a select range of asset classes, geographies and currency exposures to minimize risk and maximise growth. There is a focus on keeping costs low and quality high. Moneyfarm use ETFs to build their portfolios. typically your portfolio will contain 7 to 15 funds based on your risk profile and goals.
Invest From:
£50 per month
Investment Options:
Funds selected for you based on risk profile
Admin Charges:
0.6% annual fee on balances under £100,000, 0.3% annual fee on the portion over £100,000
Transfer In Existing Pensions:
Good news – Wealthify’s Personal Pension fees have reduced! Pension balances up to £100,000 continue to be charged at 0.6% per annum, but any amount thereafter will now be charged just half the usual fee (0.3% per annum). Charged monthly
Why we like it: For investors who want an expert plan put together for them based on timescales and investment risk profile Wealthify (part of the Aviva group)
offer a tech savvy low cost option. Your money is invested in a range of funds including shares, bonds, property and commodities using mainly low cost passive
investments such as mutual funds. Wealthify also offer an ethical investment option.
With investments, your capital is at risk. The tax treatment of your investment will depend on your individual circumstances and may change in the future
Funds selected for you based on risk profile
Good news – Wealthify’s Personal Pension fees have reduced! Pension balances up to £100,000 continue to be charged at 0.6% per annum, but any amount thereafter will now be charged just half the usual fee (0.3% per annum). Charged monthly
Why we like it: For investors who want an expert plan put together for them based on timescales and investment risk profile Wealthify (part of the Aviva group) offer a tech savvy low cost option. Your money is invested in a range of funds including shares, bonds, property and commodities using mainly low cost passive investments such as mutual funds. Wealthify also offer an ethical investment option.
With investments, your capital is at risk. The tax treatment of your investment will depend on your individual circumstances and may change in the future
3. Do you want to invest just in shares, funds, or shares and funds?
Check what’s on offer, if you want to have the flexibility: some platforms don’t offer both.
How To Buy Shares Using An Investment Platform
- Select a share platform – See below our 3 top platform picks
- Open your share account – To do this you will need your bank details and national insurance number
- Fund your account – You will need to fund your a/c with a debit or credit card or bank transfer
- Search for the ETF using the stock code – Type in the stock code into the search box
- Check out the latest info and price for the selected ETF – Some platforms offer free research and analysis
- Buy the ETF – Nice and easy!
Our view: The next generation of online trading platform means you can buy shares in as little as 10 minutes! See our 3 top picks for buying shares only below:
Buy the FTSE 100 via an ETF Fund
Capital is at risk.
- 0% commission on stocks
- Free account
- Inactivity fee after 12 months
Buy the FTSE 100 via an ETF Fund
Capital is at risk.
- 1 free trade per month
- Fixed fee platform – £9.99 pm
- No inactivity fees
Buy the FTSE 100 via an ETF Fund
Capital is at risk.
- £2.95 per trade
- Low cost platform
- No inactivity fees
4. Do you want your platform to be independent or fund-owning?
Do you want to be able to invest in independent funds, or are you happy investing via a fund manager such as Legal & General that offers just its own funds?
Legal & General Funds ISA
Capital is at risk.
- Invest from £20 pm
- No platform fees
- Large range of index tracker funds
- Invest up to £20,000 tax free for 2020-21
5. Do you have a self-invested pension?
You may want to look for a platform that can manage your self invested personal pension or SIPP as well: not all of them can.
6. Do you want to do a lot of trading?
Active investors will want to look for a platform that offers the best research, and the lowest fees for volume trades in funds, and stocks and shares.
7. How easy to use is this platform: what kind of tools and customer service does it offer?
These are often the criteria that count most highly with users, so do some research and read the reviews.
- Many investors are prepared to pay a bit more in fees for a platform that offers really useful apps and services.
8. How much are you investing?
You will want to look at the fee structures, and the thresholds for reduced fee charges.
- Platforms that charge flat-rate fees work better for large investors with £50K or more in their portfolios.
9. How has this platform performed?
This is a key consideration if you’re looking at having your investment managed by the platform, rather than going DIY.
You’ll want to look at the kind of returns that its investors have been getting: read the reviews and compare the results of the platforms you’re considering.
10. And finally… how much will it cost?
If you’ve worked through the other decision criteria first, you’ll understand that you shouldn’t choose solely on cost.
Some of the more expensive platforms are highly rated by their clients for usability and client support, or show consistently good returns.
Hargreaves Lansdown and Bestinvest, for example, charge tiered account management fees which are higher than others, but they’re rated highly by investors for ease of use and good customer support.
- Choosing active management of your investments isn’t always cheaper than DIY: there are some price advantages to trading in scale.
- There has been a push to get platforms away from commission-based charges towards “clean pricing” annual fees.
- You need to be looking at annual administration charges, dealing fees, and any other costs, including exit charges.
In independent research carried carried out by Lang Cat the impact of flat fees was looked at compared to providers who charge based on % value of portfolio. The survey was based over 30 years in an ISA account where the investments were split 50/50 between shares and funds and where there was a 5% annual return on the portfolio.
Undecided on your options?
When it comes to making investment decisions using the services of a qualified independent investment adviser may be worth considering.
Most IFAs will offer a free no obligation initial discussion. A good adviser based on what you are looking to achieve will put together a plan for your situation. Part of this plan may be helping you to decide what investment platform is suited to your situation.
We have partnered with an organisation Unbiased UK who will help you find a qualified adviser in your area. Find an investment adviser »
If you’ve decided to switch platforms…
DON’T withdraw your money from your ISA, and then pay it into your new account. It all has to stay quarantined within an ISA “wrapper” to hold onto the tax advantages.
- Instruct the platform you’ve chosen to move your funds over for you. (Get them working for their fees from Day One…) That way you’ll preserve their tax-free status.
No news, feature article or comment should be seen as a personal recommendation to invest. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular plan. If you are at all unsure of the suitability of a particular product, both in respect of its objectives and its risk profile, you should seek independent financial advice.
Tax treatment of ISAs depends on your individual circumstances and is based on current law which may be subject to change in the future. ISA transfer charges may apply, please check with your provider.
Tags