If you’re a U.K. resident, you’re likely fully aware that you have myriad options regarding your investments, even if you’re just getting started with trading or investing. Your ISA, SIPP and other investments are in good hands with any number of U.K.-based brokers. Whether you’re a forex trader or just looking to employ a long-term retirement investment strategy, you’ll be comforted to know that you have options.
Quick look – Best online brokerages
- Best overall – Barclays Smart Investor
- Best for low cost – Frequent Trader (Clubfinance)
- Best for frequent trading – Interactive Investor
- Best for beginners – Hargreaves Lansdown
Each individual is looking for different tools and resources in a broker. Once you know what you’re looking for, the breakdown below can serve as a helpful guide for finding what you’re looking for based on trading type, skill level and financial situation.
What to look for in a firm
There are a number of factors to consider when choosing your first broker.
- Consider what type of trading you will be doing. Day traders will be looking for different tools and information than long-term retirement investors will be. Some traders will be looking for research to provide trading ideas for them, while others will be using the platform just to execute trades.
- Consider commissions and fees and how they may impact your overall returns. Look for potentially hidden or unexpected fees in particular.
- Consider whether or not you will need banking or advisory services. Some brokers offer these services, and others do not. Finally, read reviews by other customers and look for patterns of complaints about customer service or any other problems with the service.
Here are a few other considerations:
- Trading tools
- Asset classes
- Banking services
- Positive customer reviews
Fees aren't the only consideration
It’s always a good idea to keep costs as low as possible. But new and inexperienced traders can end up costing themselves much more in the long run by choosing a discount broker and attempting to trade stocks and other assets without any guidance or help. Doing this can lead to some costly mistakes.
Sure, it may cost a little more to pay for a full-service broker, but the resources you gain from those extra fees can help protect you as you learn the ropes of trading and/or investing.
Best for beginners
- Great for investors with smaller investment amounts
- Customer service is excellent
- Offers excellent educational resources for new investors
If you’re a beginner, don’t let the scary finance-laden financial world jargon bother you. While Hargreaves Lansdown may possibly be one of your more expensive fund platforms (charging 0.45 percent) it’s a good choice for beginners who have smaller amounts to invest.
Here’s a more thorough breakdown: Investors pay a 0.45 percent fee on their total fund investments up to £250,000; 0.25 percent to £1m, 0.1 percent to £2m and £0 above that. Shares and investment trusts also incur a 0.45 percent charge on the entire holding, capped at £45.
- Fund dealing is free.
- Share, investment trust, corporate bond and ETF dealing is £11.95 per trade. (If you trade more than 10 times per month share-dealing costs are even less.)
- Regular monthly share and some investment trust investing is £1.50, dividend reinvesting is 1 percent, with a £1 minimum charge and £10 maximum.
In addition, the firm’s website is easy to use and offers helpful information for new investors, and the firm is renowned for its excellent customer service.
Best for SIPP plans
If you know you’re not going to have a large pension, then Bestinvest might be a good option for you. It has a tiered annual management charge of 0.30 percent for £0-£250,000, 0.20 percent for £250,000-£1 million and no charge over £1 million.
Overall, it’s £7.50 to trade shares and free for funds; to buy and/or sell funds, it’s free.
For a full list of charges, see Bestinvest SIPP charges.
Best for frequent traders
For frequent traders, it’s hard to deny Interactive Investor’s draw. Its flat £90 yearly platform charge (including two free trades per quarter) makes it very appealing for investors with £50,000 or more. Additional trades cost £10, but trade more than 10 times in a month and you’ll pay just £6 for those extra trades.
Interactive Investor also offers other benefits, too. Interactive Investors’ educational content is excellent, with both videos and website information.
Best for forex
- Flexible account deposit options
- Client information remains safe
- Website is informational and educational
Requiring an affordable initial investment of $100, forex brokers looking for a less expensive, stable location to trade need look no further than Markets.com. In addition to various safeguards, the broker implements substantive firewalls and other technology to ensure the safety of sensitive client information.
In addition, through Markets.com’s Web Trader platform, 55 forex pairs can be found as well as just over 2,000 CFDs. MetaTrader4 (MT4) software is also offered.
Best for CFDs and spread betting
- Largest CFD dealer with the largest number of financial spread betting accounts
- Low cost
- Trading platforms and tools are excellent
The U.K.’s IG Group is a global online trading company. Its core of offerings includes spread betting; however, the firm offers a wide variety of financial products, including commodities, cryptocurrencies, CFDs and forex.
Due to its size and client numbers, IG Group offers some of the lowest fees in the U.K. Check out a complete list of fees.
IG Group also offers excellent trading platforms, tools and more. You do need a balance of £5,000 to access its Virtual Private Servers for free, otherwise, access costs £50 per month.
Best for low-cost trading
- Share dealing is cheap through Frequent Trader
- No annual administration fee
- More active traders pay no quarterly fee
U.K. shares can be traded online for £4.95 a trade through Frequent Trader. There is no platform charge or annual fee if you trade more than twice per quarter. This rate also includes limit orders, stop losses, debt securities and ETFs. There is no minimum account balance.
The platform is fairly basic, but for traders looking to watch out for the bottom dollar will be in good hands with Frequent Trader.
Best for customer service
- The website is filled with information to suit you, no matter your investing or trading level
- App and portfolios available for easy investing
- Customer service is excellent
Hargreaves Lansdown’s website claims 18.0 seconds’ average call time answer from June-August 2017 and claims to be the #1 investment platform in the U.K. for private investors.
It’s for good reason, as customer service from Hargreaves includes a free initial consultation for new investors. Hargreaves’ advisory helpdesk will listen to your financial needs in order to understand where you’ll need assistance whilst offering you options to meet those needs.
- Excellent for most traders’ and investors’ needs
- Thorough research and education
- One of the better technical analysis and charting platforms available
Barclays is a household name in the U.K. The company offers clients a wide range of investment options, including funds, equities, corporate bonds, ETFs and much more. There are over 2,000 funds from which to choose.
Barclays offers a discount for volume, tiered fee structure. It also offers the MarketMaster account, which is a flexible trading account that can hold more than just shares. The cost of trading in the MarketMaster trading account is as low as £5.95 if more than 20 trades are placed a month. This fee increases to £11.95 if only one to nine trades are made a month. The company charges £8.95 if 10 to 19 deals are made per month. The MarketMaster platform also offers excellent technical analysis.
As for getting questions answered, the firm offers an “Ask a Question” section. It’s easy to find answers here without having to email or call.
Opening hours and customer service are excellent, with telephone assistance Monday – Thursday: 7:30 a.m. – 7:00 p.m.; Friday: 7:30 a.m. – 6:00 p.m.; and Saturday: 9:30 a.m. – 12:30 p.m. The helpdesk is closed on Sundays.