The proliferation of do-it-yourself investing and online trading platforms has significantly reduced the cost and complexity of participating in the stock market. These platforms provide access to a wide range of investments, often coupled with customer service and research tools, offering a modern alternative to traditional stockbrokers and financial advisors.

Many of these platforms, including those reviewed by This is Money, offer tax-efficient accounts such as stocks and shares Isas and self-invested personal pensions (Sipps). General investment accounts are also available for those investing outside of tax wrappers. The choice of platform depends on an investor's specific needs, including fees, investment types, and required support.

Several platforms have adjusted their fee structures in response to increased competition and government initiatives to encourage investment. These changes generally benefit investors by driving down costs. The best platform for an individual hinges on factors like how much they are willing to pay in fees, the types of investments they wish to make, and the level of customer service and research support they require.

While low or zero account fees can be attractive, they may not always be the best choice for every investor. Platforms like Trading 212 and Prosper offer no account fees, but may provide less sophisticated customer service and investment analysis compared to platforms such as Hargreaves Lansdown and Interactive Investor.

Key Considerations When Choosing a Platform

When selecting an investment platform, potential investors are advised to consider several key questions:

  • Cost-Effectiveness: Evaluating whether the cheapest option aligns with their need for support, or if paying more for enhanced research and customer service is preferable.
  • Ancillary Fees: Understanding all charges, including dealing fees, dividend reinvestment, and regular investing costs, to determine the true cost of investing.
  • Account Types: Verifying that the platform offers the desired account types, such as Isas or Sipps, as charging structures can vary.
  • Investment Range: Ensuring the platform supports the desired asset classes, whether individual shares, funds, exchange-traded funds (ETFs), or investment trusts.
  • Tools and Research: Assessing the availability and quality of tools and research resources offered, which can aid in investment selection.

Platform Reviews and Features

Platforms are evaluated based on cost and quality. Some platforms that stand out for service and competitive pricing include:

  • AJ Bell: Offers competitive fees with a capped monthly charge for shares, trusts, and ETFs, and free regular monthly investing. It provides access to a broad range of investments.
  • Bestinvest: Known for free financial coaching sessions and useful information. It charges an annual account fee, with reduced rates for ready-made portfolios, but fund dealing is free.
  • Charles Stanley Direct: Features a straightforward 0.3% account fee with a minimum and maximum charge. It offers free financial coaching and provides trading credits annually.
  • Etoro: Notable for its social trading features and commission-free investing for stocks. It offers a stocks and shares Isa in partnership with Moneyfarm, but includes foreign exchange fees.
  • Fidelity: Provides a wide investment choice and competitive foreign exchange fees, with a single account fee applied to the total value of investments up to £1 million. It offers extensive market commentary and guides.
  • Hargreaves Lansdown: Highly regarded for customer service and investment research, offering a Wealth Shortlist for DIY investors. While not the cheapest, it provides significant support and tools.
  • Interactive Investor: Operates on a flat monthly subscription fee model, which can be cost-effective for larger portfolios. It offers a competitive cost for buying and selling UK investments.
  • InvestEngine: Caters to low-cost ETF investing with no account fees. It allows investment in both Isas and Sipps, though its investment options are limited to ETFs.
  • Prosper: A newer platform offering refunds on fees for a selection of funds, potentially leading to zero-cost investing in certain ETFs. It also includes a cash savings platform.
  • Trading 212: Features no account or dealing fees, with competitive foreign exchange rates and a range of tools for investment selection. It offers a broad selection of investments, including stocks from the UK, US, and Europe.

Other platforms worth considering include Freetrade, which has reduced its fees and offers zero account fees for basic services, and Scottish Widows Share Dealing, formerly iWeb, which offers low costs with a fee per trade for UK or fund transactions.

Vanguard, a well-known option for low-cost investing, primarily allows investment in its own funds. Recent fee changes have introduced monthly charges for smaller portfolios.

Investment Account Types and Taxes

Choosing the right account wrapper is crucial for maximizing long-term wealth through tax efficiency. Key account types include:

  • Stocks and Shares Isa: Offers a £20,000 annual allowance for tax-free investing, with generally easy access to funds.
  • Self-Invested Personal Pension (Sipp): Provides tax relief on contributions, with access restricted until retirement age. Contributions are subject to an annual allowance.
  • General Investment Account: Lacks tax efficiency, meaning investment returns are subject to tax. This account is typically used after maximizing Isa and pension allowances.

Investments held in a general investment account are subject to capital gains tax (CGT) on profits when sold, dividend tax on dividends received, and income tax on interest from bonds and gilts. Allowances and tax rates for these taxes have been subject to adjustments.