Our guide to the best investment platforms for beginners

Published by Edmund Greaves on 10 May 2016.
Last updated on 30 May 2018

Investment platforms

Fail to pick the right platform and you could see your investment savings eaten away by admin fees, trading charges and exit penalties

Before you dive in and start picking funds, you first need to choose your investment platform. This may seem a minor decision, but making the wrong choice could cost you hundreds of pounds a year in fees and ultimately eat into the return on your investments.

To help get you started, here’s Moneywise’s guide to picking the right platform, whether you plan to invest in funds for the long term or trade stocks and shares on a more frequent basis.

What is a platform?

A platform is an online service that helps investors do five things:

  • Choose which funds to invest in
  • Buy funds
  • Hold funds
  • Monitor the funds’ performance
  • Sell funds

There is no single best platform as each offers different levels of fees and charges based on the size of your portfolio and the number of times you want to trade your holdings.

Each interface also varies. Some platforms are designed for total beginners, while others offer vast amounts of in-depth information.

What charges will I pay?

If you’re not used to investing, the choice of platforms can seem overwhelming. A good way to start your search is to think about what type of investor you’ll be. Will you be trading funds (buying or selling) on a weekly or monthly basis, or are you happy to sit back and make changes less often, perhaps once or twice a year?

Pricing structures vary widely across the market, so this is not a decision to be taken lightly. Some providers have no ongoing fund-dealing charges, while others charge up to £10 each time you make a trade.

“Many platforms offer bonuses and freebies to entice you”

Most platforms charge an ongoing admin fee, which is a percentage of your total investment, although some will charge a flat fee on a monthly or annual basis.

Analysis for Moneywise (see table below) compiled by the platform comparison site The Lang Cat (Langcatfinancial.co.uk) shows how different providers are competitive in different areas of the market.

For example, someone making a £25,000 lump sum investment would pay £113 a year in fees to use Hargreaves Lansdown, compared to £45 with iWeb.

Interactive Investor (Moneywise’s parent company) charges a flat fee of £90 a year, which is uncompetitive for people with a £5,000 lump sum, but attractive to investors with more money.

If you’re investing £5,000, meanwhile, the cheapest options are Cavendish Online, Charles Stanley Direct, and Close Brothers’ AM Self Directed Service, which cost £13 a year.

In addition, platforms usually charge an exit fee if you switch your Isa to another provider. This is typically around £25 per investment fund, but some, such as Fidelity, do not have any exit charges.

“A Stocks & Shares Isa is a way of dipping your toes in investing”

Many investment platforms also offer bonuses and freebies to entice you to sign up, and this can be a useful way to make some extra cash. But ensure you don’t lose out in the long run by picking an account that charges higher ongoing fees just because it pays a sign-up bonus.

See the table below for the annual charges for a Stocks and Shares Isa on the main platforms – the colours indicate cost, with green being the cheapest, moving up through yellow, orange and then red, which is most expensive.

What else should I consider?

It’s not just price you need to consider when picking an investment platform. Some platforms, such as Hargreaves Lansdown, offer a raft of information on the basics of investing and have lists of recommended funds. Others, such as AJ Bell Youinvest and Interactive Investor, have much more detailed notes on each recommended fund, so may be more suited to experienced investors.

Technology also plays its part, with some platforms offering smartphone apps and others simply offering users website access.

Remember that you can only open and subscribe to one Stocks and Shares Isa in each tax year, but you can hold multiple Isas from tax years gone by. If you don’t keep your investments in an Isa wrapper, you can open as many investment accounts as you like at any time.

If you do have multiple holdings, it might make both financial and practical sense to keep them in one place, as some platforms may charge a lower fee, depending on the size of your investments. But this isn’t always the case, so check with your preferred provider first.

Stocks and Shares Isa annual fee by portfolio size

Portfolio size £5,000 £25,000 £75,000 £100,000
AJ Bell Youinvest £19 £69 £194 £256
Alliance Trust Savings £120 £120 £120 £120
Aviva Consumer Platform £20 £100 £288 £375
Barclays £60 £62 £162 £212
Bestinvest £20 £100 £300 £400
Cavendish Online £13 £63 £188 £250
Charles Stanley Direct £13 £63 £188 £250
Close Brothers A.M. Self Directed Service £13 £63 £188 £250
Clubfinance £80 £80 £80 £80
Fidelity Personal Investing £45 £88 £263 £350
Halifax Share Dealing £63 £63 £63 £63
Hargreaves Lansdown £23 £113 £338 £450
Interactive Investor £90 £90 £90 £90
iWeb £45 £45 £45 £45
Saga Investment Services £20 £100 £300 £400
Santander £18 £88 £225 £275
Selftrade £39 £99 £236 £299
Strawberry £40 £98 £248 £310
The Share Centre £88 £88 £88 £184
Trustnet Direct £60 £103 £228 £240
Willis Owen £20 £100 £275 £350

Source: The Lang Cat, May 2018. Assumes four deals a year within an Isa, no investment growth. Figures rounded up to the nearest £1. Additional fees, eg fund fees, may apply

Moneywise’s platform picks

To help you pick your perfect platform, Moneywise asked Rodolfo Crespo, associate research director at platform research firm Platforum, and Holly Mackay, founder and chief executive of platform comparison site Boring Money, for their expert views on four investment profiles: smaller portfolios, larger portfolios, holding shares and funds, and regular investors.

Moneywise then analysed this research to compile our top picks based on price, quality of service, information and help available, and the user-friendliness of the website and app.

Best for smaller portfolios: Hargreaves Lansdown

While not the cheapest option out there for smaller sums, Hargreaves Lansdown wins for its quality customer service and breadth of information for those looking to invest with smaller amounts.

Ms Mackay explains: “It’s relatively expensive, with a platform fee of 0.45%, but for smaller portfolios it can be argued that the fees are still good value and worth the excellent service.

“For a beginner, the ability to speak to someone in less than 10 seconds is very reassuring.

“It’s also about as safe as an investment platform can get, given it’s a FTSE 100 company and the biggest investment platform in the UK with over one million users. In addition, the general user experience behind the scenes is great and the mobile app is very good.”

Best for larger portfolios and frequent traders: Interactive Investor

Interactive Investor wins for its competitive fees once your portfolio grows to a larger size. A flat £90 fee is equivalent to 0.12% a year once you’ve invested over £75,000, and that represents great value for an investor with a larger pot. This fee is also returned as trading credit too, so shouldn’t necessarily be considered a sunk cost.

Ms Mackay says: “The £90 flat platform fee makes it very attractive for those with larger portfolios.

The £90 fee also gives you the equivalent amount in trading credits, which is worth nine trades at Interactive Investor’s standard rate of £10 per trade.

“It’s not the most beginner-friendly platform, with a lot of jargon aimed at the more experienced investor. However, the app is a lot cleaner and easier to use.”

Mr Crespo believes the platform is improving its offering for novices: “Interactive Investor has recently improved the guidance it offers to beginners with the launch of its Rated Investments list.”

Best for holding shares and funds: Charles Stanley Direct

If you’re looking to hold a mixture of both funds and individual shares, our pick is Charles Stanley Direct, thanks to its flat 0.25% fee and good customer service ratings.

Ms Mackay explains: “It is rated highly by its customers, who give it an 81% recommend score on our website.

“In terms of cost, Charles Stanley Direct has a fixed platform fee of 0.25% for funds, with no fund dealing charges, which is one of the cheapest options available.

“For shares, it has a trading fee of £11.50 and a platform fee of 0.25%, which is waived for any month where you make one or more chargeable trades.

“It also has solid customer service and a decent app which is continually improving.”

Best for regular investments: Fidelity Personal Investing

Regular investing is an increasingly popular option for investors getting started from scratch, or who want to build upon a small lump sum.

Mr Crespo explains: “Setting up an ongoing regular contribution into a Stocks & Shares Isa is a popular way of dipping your toes into the waters of investing. We would recommend looking for a platform which charges no transaction fees for contributions going into funds. In addition, some platforms offer reduced transaction fees for regular investment plans investing into shares, ETFs (exchange traded funds) and investment trusts.

“Fidelity Personal Investing, Hargreaves Lansdown and Selftrade offer the best of both worlds, with no trading fees for funds and a £1.50 fee for other investments. However, with the best-in-class guidance for beginners, Fidelity Personal Investing would be my top pick.”

As with our other three top platforms, Fidelity also has an app. However, Fidelity’s app is only available on iOS, although it plans to launch an Android version shortly this year. Charles Stanley Direct, Hargreaves Lansdown and Interactive Investor have both iOS and Android versions.

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