How to buy stocks and shares in the UK – Review of the best investing platforms for new and experienced investors. 19


This post will help to give an idea of what I think are the best online investing platforms for the situations listed below:

  • New Investor
  • Long terms buy and hold investor in an ISA
  • Investor wanting to make use of Capital Gains Allowance (non-Isa Account)
  • Day trader.

 

Best Platform for new investors: Hargreaves Lansdown.

One of the biggest dilemmas new investors who want to buy stocks and shares online face is they don’t know where to start looking. With so many stock brokers or online platforms around these days, it may be difficult for them to chose which one to use.

Click to enlarge and make more clearer. HL gives great research.

Click to enlarge and make more clearer. HL gives great research.

When you are a new investor who has never bought a stock or share in your life, it best to go with a platform that offers the best user friendliness and the easiest platform to navigate, regardless of price, and in this case its undoubtedly Hargreaves Lansdown.

Hargreaves Lansdown is the country’s biggest fund platform, looking after more than £50 billion for do-it-yourself investors. It is is the UK’s number 1 ‘investment supermarket’ for private investors. They have helped investors save time, tax and money on their investments for more than 30 years.

The Hargreaves Lansdown platform aims to help people make more of their investments by giving them the tools and information to make informed decisions. They have and award-winning website and apps that give you access to your investments anytime. They also have a specialist helpdesks which aims to simplify your financial life by making it easy and straight-forward to manage your investments and pensions.

The Hargreaves Lansdwn platform gives investors the flexibility to choose from one of the widest range of investments which includes more than 2,500 funds, UK, US, Canadian and European shares, Exchange Traded Funds, investment trusts, bonds and gilts. This gives you the freedom to choose and switch between those investments you believe will give you the best returns.

Having personally used Hargreaves Lansdwon, i can say that it is good, reliable and very easy to use. Here’s the rub though. It imposes a rather expensive annual fee of 0.45% for assets under management. So, for every £10,000 you have invested using Hargreaves Lansdown, it will cost you £45 a year. And if you are holding investment funds, expect to add about £75 a year in fund management charges.

Click picture to enlarge. It is easy to trade shares using Hargreaves Lansdown

Click picture to enlarge. It is easy to trade shares using Hargreaves Lansdown

The trading fees are also on the high side as it is £11.95 per trade (although buying into funds are free). But if you are a new investor, this fee is worth it due to the ease with which any novice investor can use this website.

Advantages of Hargreaves Lansdown are :

  • Hargreaves Lansdown has probably the widest selection of tradable stocks of any UK online investing platform.
  • Extremely user friendly interface which is suitable for an investor at any level.
  • Free to buy into funds ( you also get a discount for buying funds with HL; lower annual fund charge).
  • Offers free investment guides and tools.
  • Great Customer service – I have personally used the help desk mentioned above by calling in and sending a secure message via the platform and I have to admit that they are extremely helpful.
  • Great range of stocks

Disadvanatges of Hargreaves Lansdown are:

  • Price – They charge £11.95 per trade and also charge a fee of 0.45% for Assets under management.

See the price list here “ http://www.hl.co.uk/shares/share-dealing/dealing-charges

 

Best Platform for Buy and Hold Investors (ISA)- Youinvest

For buy and hold investors, one of the biggest aspects is cost. You need a platform that charges a relatively low trading fee and one that charges low fees for assets under management. AJ Bell Youinvest does just that.

The research feature on Youinvest. Click on picture to enlarge.

The research feature on Youinvest. Click on picture to enlarge.

AJ Bell is a leading online investment platforms and stockbroker services. They have more than 111,500 customers and assets under administration exceed £26.1 billion. There unique selling point is that they provide award-winning investment products, backed up with excellent service and online functionality at a low cost.

Youinvest covers the majority of stock exchanges and also offers an ISA and Pensions accounts which is great for any long term investor

Although the user interface can be better, the fact that it charges no fee for assets under management is a no brainer for any serious long term investor

Advantages of Youinvest are:

  • Low fee – This is crucial for longterm buy and hold investors and the cost savings could lead to higher compounded returns in the future.

    Youinvest platform. click to enlarge.

    Youinvest platform. click to enlarge.

The list of charges can be found here “ https://www.youinvest.co.uk/charges-and-rates/isa

Disadvantages of YouInvest are:

  • Not that most user friendly interface.
  • No automatic dividend reinvestment.
  • Charges a fee of £4.95 to buy into funds.

 

 

Best Platform to make use of your CG allowance – Degiro but Freetrade when it launches.

In UK, you can buy and sell shares using three accounts a dealing account, an ISA or a SIPP (pension). Whilst an ISA and SIPP offer great tax advantages, dealing accounts should not be neglected. This is because every resident in the UK gets a Capital Gains allowance of £11,1000. This means that you can make profits on shares of £11,100 a year before you have to pay tax. To find out more about Capital gains, read:

Using the DeGiro platform

Using the DeGiro platform. Click picture to enlarge and make clearer

Whilst Degiro does not have an ISA or a SIPP Account, it does have a dealing account which is the lowest cost of any found in the UK. But Freetrade will be the cheapest platform once launched.

Read my review of Degiro here.

Advantages of using Degiro over other platforms:

  • Low fees – it has a cost structure that no other platform can compete with.
  • Investing in fractions – Degiro will soon provide the unique opportunity to invest in fractions of products. You could for example, buy 0.100 of a share in Google. If you were to do this for the entire NASDAQ, your portfolio would contain the equivalent of 0.100 of the Index. Ideal for investors with smaller portfolios who would like to spread their investments effectively.
  • User friendly web trader.

    Buying stocks is easy with degiro. Click picture to enlarge if not clear.

    Buying stocks is easy with degiro. Click picture to enlarge if not clear.

  • No Hidden costs – It’s free to open an investment account with DEGIRO and once you do, you’ll have immediate access to unheard-of low fees. DEGIRO’s pricing structure is simple and transparent with no hidden costs, so you know exactly what you are paying for and when, avoiding any unpleasant surprises.

Disadvantages of using Degiro:  

  • No analysis tools as you might expect from a discount broker.
  • No trade confirmations – When orders are executed there is not such thing as trade confirmations in your mail. Everything is just on the platform itself.
  • To deposit money, you can not do a simple debit card payment but you have to instead do a transfer from your bank to theirs.
  • No ISA  or SIPP – Degiro does not at present allow you to open an account with an ISA wrapper

 

Best platform for investors who don’t want to pick their own stocks – Nutmeg

 

If you want to benefit from the wealth created in the stock market but have no interest in stocks, then Nutmeg might be just the platform for you. Nutmeg is a fully automated wealth manager that buys into exchange traded funds or indexes (e.g FTSE 100, S&P500) on your behalf and you don’t have to do any work at all. Apart from buying into the various indexes for you, Nutmeg tailors the whole portfolio for you depending on your risk preference. So say you don’t like risk, Nutmeg can make a portfolio for you that hold more bonds than equities (stocks). And the best news is all this is done for the low price of 1% of your assets under management.    nutmeg

Nutmeg is the best platform if you want to make money from stock market with no effort 

Read my review of Nutmeg investments to see if thesis the right platform for you.

 

Advanatges of Nutmeg?

  • Low cost and easy to use – best for financial Investors looking for an easy investing approach, the best bang for their bucks and the best time savings.This group may be intimidated by starting an investment program, and may not want to invest all their time to figure it out. This group may be young millennials skeptical of high-priced financial advice, or busy older professionals who need to get started on their retirement savings.
  • No effort required – best for long-term passive investors with some financial knowledge. The so called “Planners and Forgetters.” These types of investors understand how to be patient with their money. They understand the concepts behind portfolio diversification and how fees impact long-term returns.

Disadvantge of Nutmeg?

  • Cant pick your own stocks – not good for people who think they can beat the market, or want to trade individual stocks. As Nutmeg will look after your portfolio for there is nothing for you to do investing wise. Thus if you think you can consistently beat the market, than this service is not for you.

 

Best platform for new day traders – Etoro

If you are new to day trading, the most important thing is for you to learn off someone else to see how they make money. With Etoro you get the benefit of learning from thousands of traders – heck you can even copy other traders so that you can piggy back off their hot streak.

In essence, Etoro takes a social networking approach to trading and investing.Through the power of social trading, Etoro links traders from all over the world into one big network and encourages traders to use each other’s skills to trade smarter together.

Read my review of Etoro here to see if it will benefit you

Advantages of using Etoro:

  • Harnessing the power of the crowd – As you can see other peoples research ad analysis, you can make more informed decisions about the trades you are going to make. You can also bounce ideas off fellow trades to ensure you use each other’s skills to trade smarter together.
  • Easy to use platform – the interface is easy to use and easily navigable. Buying and selling assets is very easy and the platform offers good analytical tools to assist you in making trades.

Disadvantages of using Etoro:

  • The stocks you can trade are limited. There are currently just under 40 stocks you are able to trade using etoro. (But they have been increasing this amount steadily).

 

Best platform for experienced day traders – IG

If you are an experienced day trader and want to make a living from it, you want to use a platform that offers the best spreads.

IG is the World-leading provider of contracts for difference (CFDs) and financial spread betting, and hold a market-leading position in many countries, including the UK, Australia, Singapore and France.

The vast majority of their clients are not City traders but are professional men and women who are interested in the financial markets

They pride themselves on high standard of customer service – providing 24-hour telephone support (speaking to real people), as well as a comprehensive range of education, training tools, trading tips and market commentaries online.

Their technology combines superior features with high-speed execution, designed to meet the needs of the most demanding trader and provide an outstanding experience on all devices.

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