Most people know that investing is one of the best ways to put your money to work and grow your wealth over time. But, finding an investment platform that’s worthy of your trust and offers plenty of options for beginner and advanced investors alike can be difficult.
To make the process easier, this guide will highlight three of the best UK investment platforms for 2020. We’ll walk you through what features allow each of them to stand out, plus explain what you should be looking for when choosing the right online broker for you. By the end, you’ll have the information you need to choose an investment platform and start putting your money to work.
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Best UK Investment Platforms in 2020
The number of online brokerages has exploded in recent years. That means you have more choice than ever before and the competition between brokers is more fierce than ever when it comes to choosing an investment platform. So, without further ado, here are our top picks for the best UK platforms for investing your money.
1. eToro - Best Social Investment Platform
In our view, eToro is head and shoulders above the rest of the online brokerage pack for UK investors. To start with, the variety of assets this platform enables you to invest in is simply enormous. eToro allows trading in stocks from across the world’s major exchanges, including the London, New York, and Tokyo stock exchanges. Unlike for many other online brokers, when you buy stocks through eToro they’re held in your name. That’s important because it means you’re eligible to collect dividends. If diversifying your portfolio across companies from different geographic regions isn’t enough, you also have the option to invest in cryptocurrencies or to trade commodities and forex through contracts for differences (CFDs).
The other major thing that stands out to us about eToro is the platform’s rich social trading features. You can follow any of hundreds of other investors using this investment platform and see what stocks or other assets they’re holding in their portfolios at any given time. If you like their strategy, you can set aside a portion of your own account to automatically copy their positions. This automated copy trading lets you try out a variety of different strategies at once and can help beginner investors succeed quickly.
The only thing we don’t love about eToro is that it’s very light on research tools. The platform does have built-in technical charts, but they’re not equipped with very many indicators or technical studies. You also won’t find real-time market news or detailed company fundamentals when investing with eToro.
- Assets: Stocks, ETFs, Cryptocurrencies, Forex CFDs, Commodities CFDs
- Demo Account: Yes
- Trade Commissions: No
- Research Tools: Basic charts
- Minimum deposit: £150
- Own Stocks Outright: You can collect dividends
- CFD Trading: Speculate on forex and commodities
- Copy Trading: Mimic successful traders’ portfolios
- Minimal Research Tools: Only basic technical charts, no news
2. Plus500 - Access commission-free trades at competitive spreads
Trade commissions have largely fallen by the wayside, but that hasn’t stopped many brokerages from charging an arm and a leg for trades through high spreads. Plus500 is widely renowned for having some of the most competitive spreads on the market. This online investment platform offers generally lower spreads although variable spreads on CFD trades on stock, option, commodity, forex, and cryptocurrency.
To some extent, prices at Plus500 are able to remain competitive by keeping overheads low. You won’t find many research tools available through this investment platform, for example. The technical charts are bare-bones, with few technical studies. While you can set trade alerts, Plus500 doesn’t have a vast amount of financial data or market news to offer stock traders.
For the majority of investors, none of this will be a problem. There are plenty of other free research platforms available, and the money you save with Plus500 can be put towards other tools for improving your investment strategy.
One important thing to note about Plus500 is that all assets are traded with CFDs. That’s a huge plus if you want to trade with leverage, as this platform allows you to take on trades at margins of up to 300:1. If you’re planning to invest in stocks, you’ll want to be aware that you’re not eligible for dividends when trading shares and stock CFDs.
- Assets: Stocks, ETFs, Options, Cryptocurrencies, Forex, Commodities (all as CFDs)
- Demo Account: Yes
- Trade Commissions: No
- Research Tools: Basic charts
- Minimum deposit: £100
- Low variable spreads: Buy and sell without breaking the bank
- Leveraged Trades: Buy on margins up to 300:1
- Good for experienced trader: features sophisticated features and analytical tools
- Few Research Tools: Only very basic charts available
- No Dividends: You’re not eligible for dividends when trading stock CFDs
3. Investous - Best Technical Investment Platform
For investors who want to get into the weeds on the assets they’re trading, Investous is the online broker of choice. This investment platform includes its own proprietary technical charting software, which does a pretty good job of helping you analyse trades. If you want even more technical analysis power, Investous comes with access to MetaTrader 4. With that software, you can create your own custom indicators and program an automated trading strategy to take the work out of your investments. Investous also offers trading signals, which synthesises market sentiment data to help you decide whether an asset is poised to rise or fall in price.
Like the other investment platforms we reviewed, Investous offers a wide range of assets to trade. You can buy and sell stocks, ETFs, cryptocurrencies, forex, and commodities, all through CFDs. Keep in mind that, as for Plus500, you’re not eligible to collect dividends when you hold stock CFDs as opposed to actual shares. But, you can trade with leverage; Investous offers margins of up to 500:1 on some asset classes.
One thing we don’t love about Investous is that it’s somewhat pricey. This shouldn’t be too surprising given the wealth of research tools this investment platform includes. But, you’ll need to watch out for high spreads of 0.25% or more, which can eat up your profits on low-margin trades. Investous also has a relatively high minimum account balance requirement. You’ll need at least £200 to get started investing with this platform.
- Assets: Stocks, ETFs, Cryptocurrencies, Forex, Commodities (all as CFDs)
- Demo Account: Yes
- Trade Commissions: No
- Research Tools: Advanced Charts, MetaTrader 4, Trading Signals
- Minimum deposit: £200
- Advanced Charting Tools: Includes access to MetaTrader 4
- Trading Signals: Analyse market sentiment before you buy
- High Leverage: Open positions on 500:1 margin
- Expensive Spreads: Often 0.25% or higher
- High Account Minimum: Requires £200 to start investing
What Should You Look for in an Investment Platform?
Now that you know more about our three favourite UK investment platforms, it’s time to think about what you really need out of your broker. Brokers vary quite a bit in what tools and features they offer, and these differences can have a major impact on your investing success. So, let’s take a look at the most important factors you should consider when choosing an investment platform.
A good place to start when deciding which investment platform is best for your needs is to look at what asset classes each platform offers. Almost every online broker includes stock trading, but not every broker gives you access to major exchanges around the world. That’s important, since growth prospects for companies listed on the London Stock Exchange may be very different from those for companies listed on the Tokyo or Hong Kong exchanges.
In addition, there’s a whole world of investing beyond the stock market. Forex trading and commodities trading are potential ways that you can differentiate your portfolio so you’re not relying entirely on corporate growth to drive gains over time. At the same time, an increasingly large number of brokerages are now offering cryptocurrency investing in a handful of the most popular digital currencies.
On top of thinking about what assets are available, it’s also important to consider how your broker will allow you to trade them. Some investment platforms, like eToro, allow you to directly own stocks and cryptocurrencies. This is good for long-term investors since you’re eligible for dividends if they’re paid out and there are no fees associated with simply holding your assets for months or years.
If you trade with CFDs, you don’t actually own the underlying asset, instead, you’re only speculating on the price. This is generally good for forex and commodities, since taking ownership of foreign currency or barrels of crude oil comes with quite a few headaches. CFD trading can also be good for stock traders since you can trade with leverage when using CFDs, and thus free up money for additional positions. But, if you’re holding stocks for the long term, you may find yourself paying monthly fees to automatically roll over your contracts from month to month.
Technical Research Tools
Another factor to consider when choosing an investment platform is whether they offer tools to help you research assets and develop a profitable trading strategy. Most brokers include some form of technical charts, which form the basis of stock, currency, and commodity price analysis. But, the quality and depth of these charts can vary widely.
In general, charts that offer more technical studies, the ability to create custom indicators, and backtesting features are better for analysing assets. Some brokers, including Investous, give all clients access to MetaTrader 4, which is the gold standard software for technical analysis. Of course, beginner investors might not always be thrilled about having more complex tools at their disposal. In that case, you might be better off choosing an investment platform that focuses just on the essentials.
If you trade based on fundamental rather than technical indicators, it’s just as important to have access to the data you need to draw conclusions about your investments. Corporate financial data and filings are included for free at many brokerages, but you may have more difficulty finding detailed currency and commodity reports. Be sure to check what different brokers offer in this respect before committing to an investment platform.
While not essential, social trading features can also contribute to your decision to opt for one investment platform over another. Social trading is particularly useful for entry-level investors since interacting with other investors gives you a chance to learn the ropes. For example, you can quickly pick up on successful trading strategies through copy trading or find out why other traders do or do not like a particular asset by reading through discussion boards.
In that sense, social trading features can also contribute to your research. Discussion boards offer an easy way to gauge investor sentiment around a company or asset. Meanwhile, following other traders’ positions can help you pick up on unique technical combinations that you can then integrate into your own trading strategy.
No discussion of investment platforms is complete without talking about fees. Thankfully, flat trade commissions have largely disappeared from online brokerages. If you do find an investment platform that’s still charging a flat fee every time you make a trade, it’s probably a good idea to steer clear.
That said, investment platforms still make money every time you trade through the spread. This is the difference between what you pay for an asset and what the seller receives for selling it. Spreads can vary widely between brokers, so it’s worth taking a close look at what’s being charged for different types of assets. For example, spreads at Plus500 are often less than 0.1%, while spreads at Investous are often 0.25% or more.
In addition, you’ll want to look carefully at what other fees your investment platform might charge you. Most brokers don’t have a monthly subscription fee for data, but you do have to place at least one trade every month or two to avoid inactivity fees. Some brokers also charge deposit or withdrawal fees, which can add up over time. If you’re trading CFDs, watch out for fees associated with holding leveraged positions overnight or with rolling over contracts from one month to the next.
Finding the best investment platform is an important part of succeeding as an investor. The right platform ensures that you have the tools you need to trade profitably and to diversify your portfolio. Top brokers are also trustworthy and won’t slowly drain your account balance with hidden fees.
In our view, eToro, Plus500, and Investous are three of the best UK investment platforms for 2020. With our guide to choosing the best investment service, you can easily find the one that’s right for you.
How much do brokerages charge through the spread?
The amount that brokerages charge using spreads varies widely between platforms and across asset classes. We’ve seen spreads that are well under 0.1% on stocks and bonds at low-cost brokerages like Plus500. We’ve also seen spreads that are as high as 0.5% on some lesser traded commodities like oranges.
Will my brokerage roll over my CFD contracts automatically?
CFD contracts come with an end date, which is usually the end of the month that the contract was issued during. But, you typically don’t have to worry too much about this end date. Most investment platforms that offer CFD trading will automatically roll over your open contracts into contracts for the next month at no cost and without any action on your part.
Do any UK investment platforms offer mobile apps?
Many UK investment platforms, including all three of the brokers we recommended, offer mobile apps. You can access most of the same features, including MetaTrader 4 charting tools when using the Investous mobile app.
What can I do if the investment platform I want doesn’t offer research tools?
If your preferred investment platform doesn’t offer the research tools you need, don’t worry. There is a huge number of third-party stock, commodity, and forex research platforms that you can turn to for help. Some of these are free, while others require a licence or subscription to use.