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Best UK Stock Brokers Comparison in 2020

Are you looking to start your investment journey but don't know where to find the best UK stockbrokers of 2020? We've done the hard work for you.
Kane Pepi
Author: Kane Pepi
Last Updated: February 13, 2020
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Are you looking to start your investment journey by finding the best UK stock brokers of 2020? If so, you’ve certainly come to the right place. Take note, the online stocks and shares arena can often feel like the Wild West, not least because the industry is now home to hundreds of platforms.

The key is finding a stock broker platform that is right for you. This might be a broker that lists thousands of shares across multiple markets, or a platform that offers super-low trading fees. Either way, we’ve got you covered.

Within our guide on the Best UK Stock Brokers of 2020, we’ll start by explaining what a stock broker actually is and how they work. After that, we’ll then list the best UK brokers currently active in the market. We’ll also give you some handy tips on the factors you need to look out for prior to joining a new platform.

 

Table of Contents

     

    Best UK Stock Brokers 2020 – Best Brokers Compared

    Who are the best stock brokers in 2020 and who wins the UK stock broker comparison?

    If you’re a newbie investor, then we would suggest using one of the following online stock brokers, most of which also offer investing apps to facilitate your trading experience.

    1. eToro – Best Share Dealing Platform for Beginners

    Although eToro was only launched in 2006, it is now one of the most popular online stock brokers in the UK – with millions of traders under its belt. The platform lists thousands of stocks and shares across heaps of markets. This includes the London Stock Exchange, NASDAQ, and the New York Stock Exchange. You can also buy and sell shares from less popular markets such as those found in Scandinavia, Spain, and Canada.

    eToro is also popular because of its industry-leading fee structure. In fact, the platform doesn’t charge any fees at all other than the spread. This is ideal if you are just looking to start out with small amounts, as you won’t get crippled with per-trade fees. eToro also permits deposits and withdrawals via multiple channels, including debit/credit cards, e-wallets, and a bank transfer.

    Pros
    • Supports multiple payment methods including e-wallets
    • No trading fees other than the spread
    • Fast registration and KYC process
    • Thousands of shares to choose from
    • Perfect for beginners
    Cons
    • Spreads can be high on less popular stock exchanges
    • Customer support does not operate 7 days per week

    2. DEGIRO – Best for Diversification and Low Fees

    DEGIRO is an excellent option if you are looking for access to a highly extensive number of asset classes. Firstly, the platform hosts tens of thousands of stocks and shares. This covers major markets in the UK and US, as well as emerging markets that are often difficult to access.

    DEGIRO is also strong outside of the stocks department. This includes mutual funds, bonds, futures, and indices. Although the broker does not accept debit/credit cards or e-wallets, you can easily deposit funds with a UK bank account. We also like the educational tools available at DEGIRO. This covers heaps of useful guides and explainers on key trading terms, which is ideal if you’re still a trading newbie.

    Pros
    • Access to global stock exchanges
    • One of the few UK platforms to offer corporate bonds
    • Super-low trading fees
    • Simple to deposit funds via a UK bank account
    • Strong regulatory standing
    Cons
    • Platform could be more user-friendly

    3. Robinhood – Best for Commission-Free Trading

    robinhood logo stock brokers

    In a similar nature to eToro, Robinhood is also known for its fee-free trading. Although the platform is based in the US, it recently entered the UK market. As such, you can now benefit from a stockbroker platform that charges no fees at all. Once again, you need to keep an eye out for spread.

    Robinhood is also heavily regulated in the UK, with a license from the Financial Conduct Authority. You will also benefit from the protections offered by the SIPC. This is a US-based insurance scheme that covers up to $500,000 in security holdings, and $250,000 in cash balances. This will, of course, be the Pound Sterling equivalent.

    Pros
    • Zero-free stock trading
    • 5,000+ stocks listed
    • Access to ETFs and bonds
    Cons
    •  Spreads are often higher than traditional brokers

    4. IG

    ig stock brokers

    There are literally hundreds of brokers offering their services in the world, typically the most impressive ones are even publicly traded companies and that is the exact same case of IG.

    With a market capitalization in the billions, this is a firm that has been offering securities trading since the 70s. If you are interested in trading with a local regulated institution in the UK, IG might be the overall best option currently available in 2020.

    The main and only complaint that is commonly heard when it comes to this firm is the high compliance review in order to open an account. If you are opening the account directly from the UK you won’t have to deal with much trouble, other citizenships and nationalities might open a case for discussion.

    Another aspect to mention is that while the firm is strong in terms of Stock, CFD Trading, it lacks in other markets. If you are interested in an active management of bonds or commodities you might be positioned better with another broker.

    Pros
    • Amazing charting package
    • Impressive educational library
    • Cheap trading cost
    Cons
    • Limited research and educational tools
    • No tax-advantaged account options
    • Restrictive account opening

    Best Mobile Stock Broker

    If you’re the type of trader that likes to buy and sell assets on the move, we would suggest checking out our top pick for the best mobile stock broker of 2020.

    1. Interactive Brokers – Best Mobile Trading Platform

    Interactive Brokers is an established trading platform with an excellent reputation in the UK market. The platform makes our list for its outstanding mobile trading department. It allows you to access virtually every feature available on the main desktop platform, such as depositing and withdrawing funds, buying and selling shares, and checking your portfolio.

    Interactive Brokers is also a strong choice for those of you that seek access to thousands of financial instruments. On top of offering stocks and shares, you can also trade forex, mutual funds, and even cryptocurrencies. We also like the super-competitive fee-structure employed by the broker. In fact, you can buy blue-chip stocks for around 4p per trade. Finally, Interactive Brokers is known for offering one of the best customer service departments in the stocks space.

    Pros
    • Heavily regulated in the UK and has a great reputation
    • Tens of thousands of shares to choose from
    • Buy and sell shares at super-low fees
    • Other asset classes supported
    • Excellent research tools
    Cons
    • Some traders might find the trading arena a bit intimidating

    Best CFD Stock Broker

    CFDs allow you to perform a range of trades that traditional stocks do not allow. Crucially, they give you the ability to go short on a company, meaning that you will make a profit if the price of the stock goes down. Here's our top pick for the best CFD stock broker in the UK.

    1. Plus 500 – Thousands of CFDs Listed

    If you’re keen to explore the benefits of CFD trading, look no further than Plus 500. You can trade virtually every asset class imaginable at the platform without paying any commissions. This covers thousands of stocks and shares, forex, indices, and ETFs. Just remember, you will never own the underlying asset as you are instead purchasing CFDs.

    However, this allows you to go short on stocks, subsequently allowing you to make gains even when the markets are down. In terms of the platform’s regulatory standing, Plus 500 holds multiple licenses. This includes the FCA, as well as regulators in Australia. The company is also listed on the London Stock Exchange, which illustrates just how big the platform has become in the UK space.

    Pros
    • Holds multiple licenses and is listed on the London Stock Exchange
    • Huge list of tradable assets
    • Allows you to go short
    • User-friendly trading platform
    • Trade via your desktop or mobile device
    Cons
    • Some traders might find the trading arena a bit intimidating

    Best Stock Brokers for Reputation

    If your main concern is choosing a UK stock broker with an impeccable reputation, you'll likely need to stick with an established platform. Although such brokers provide a first-grade service with heaps of trading and research tools, you will likely encounter higher fees. Nevertheless, here's our list of the best UK stock brokers for reputation.

    1. Hargreaves Lansdown – Great for Research Tools

    Hargreaves Lansdown is an industry leader in the UK stock broker space. It offers a highly extensive offering of UK and US-based stocks, as well as mutual funds, bonds, and indices. You can also invest in IPOs. One of the stand-out features offered by the platform is that of its research tools. This includes regularly updated stock market analysis on blue-chip companies.

    The main draw-back to using an established powerhouse like Hargreaves Lansdown is its fees. You will need to pay £11.95 per trade, so if you’re only investing small amounts, the broker might not be for you. On the flip-side, the stock broker only charges 0.45% per year to invest in mutual funds.

    Pros
    • Very good reputation in the UK brokerage space
    • Highly extensive list of UK and foreign markets
    • Great educational and research tools
    Cons
    • Fees are much higher than other online brokers

    2. Saxo Capital – Great for Experienced Investors

    If you’re an experienced investor and you’re prepared to deposit at least £1,500, Saxo Capital is well worth a look. The platform was first launched in 1992 and now holds an excellent reputation in the space. On top of stocks and shares, Saxo Capital also facilitates options, bonds, and indices.

    You’ll also be treated to a plethora of advanced trading tools to facilitate your technical analysis endeavours. If you’ve got an appetite for margin trading, Saxo Capital also permits leverage.

    Pros
    • Great for experienced traders
    • Lots of advanced trading tools – including leverage
    • Massive collection of assets listed
    Cons
    • Not suitable for beginners

    Note: While we have covered the ins and outs of what you need to look out for when choosing a new stock broker, the most important thing is that the platform is regulated. In the UK, platforms need to hold a license from the FCA to offer brokerage services.

    How We Rank Online Stock Brokers

    With hundreds of UK-based stock brokers now active in the market, knowing which platform to go with is not easy. As such, we have a very strict criteria in place to ensure that platforms meet our super-high standards. If they don't, they simply don't make our list.

    Below we have listed the main metrics that we look for when reviewing a new broker.

    ? Fees and commissions

    ? Number of stocks and shares to invest in

    ? Offers and promotions

    ? Research and analytics tools

    ? Trading platforms

    ? User-friendliness and customer support

    ? Number of markets offered to the trader

    What is a Stock Broker? Stockbroker Definition

    In its most basic form, a stock broker is simply a third-party between you and a publically listed company. In other words, a stock broker allows you to buy and sell shares with ease. In a time not so long ago, you would be required to call your stock broker up over the telephone and place a manual trade.

    The vast majority of brokers would also be required to physically buy and sell shares on the trading floor. This is what may newbie investors picture when they think of the traditional stock trading arena.

    However, fast forward to 2020 and things are a lot different. The industry is now dominated by cutting-edge technologies, meaning that you can buy shares at the click of a button. Not only does this include a desktop computer, but mobile trading is also a thing.

    When it comes to actually buying a stock, all you need to do is open an account with an online broker, deposit some funds, and choose the company that you wish to back. Once you have decided how much you want to invest, the stock broker platform will typically execute the trade instantly. In terms of selling your shares, the process is exactly the same but in reverse.

    How do online stock brokers work?

    Below we have outlined a more in-depth overview of how stock broker platforms work.

    ✔️ Once you have found a stock broker platform that meets your needs, you will need to open an account. If you're an everyday retail trader, you should be able to do this in a matter of minutes. You'll need to provide the broker with some information about your identity, such as your full name, home address, date of birth, national insurance number, and contact details. You will also need to answer some questions about your experience in trading. 

    ✔️ You will then need to go through a KYC (Know Your Customer) process. This is to ensure that the stock broker complies with UK and EU laws on anti-money laundering. You simply need to upload a clear copy of your government-issued ID, which can be either a passport or driver's license. Most platforms can verify the document automatically.

    ✔️ Once your account is verified, you will then need to make a deposit. Most online stock brokers allow you to deposit funds with a local bank account. The best brokers will also support debit/credit cards and e-wallets like PayPal, Neteller, and Skrill. 

    ✔️ Now that you've funded your account, you are ready to buy some stocks and shares. You will need to search for the company that you wish to back, and then decide how much you want to invest. There is no longer a need to purchase whole shares, as stock brokers can split the difference with other investors on the platform. 

    ✔️ Once you have purchased your shares, you will then be entitled to dividends (if applicable). You can sell your shares at any given time. If you try to sell them outside of standard trading hours, you will need to wait until the market reopens in the morning.

    How do Stock Broker Fees Work?

    ? Stockbrokers are in the business of making money, so you will need to pay a trading fee when you buy and sell shares. Some brokers will charge you every time you trade, meaning you'll pay a flat fee at both ends of the transaction. This is beneficial if you are planning to trade large volumes.

    ? If you are trading small amounts, then you are best off choosing a broker that charges fees on a percentage basis. For example, if the broker charges 0.5% per trade, and you purchase £300 worth of shares, you will pay £1.50 per trade. Once again, you'll need to pay this when you buy and sell your shares.

    ? A number of new-age platforms operating in the market now allow you to purchase shares on a commission-free basis. While most of these are in the form of CFDs (contract-for-difference), brokers like eToro allow you to own the share outright. This means that the only fee you will end up paying is the spread.

    ? You also need to make considerations regarding deposit and withdrawal fees. While most UK stock brokers allow you to fund your account for free, this isn't always the case. As such, check to see whether certain payment methods attract a fee, and whether there is a minimum withdrawal amount in place. 

    What Types of UK Stock Broker Accounts are There?

    If you're just an everyday trader that is looking to buy shares in the traditional sense, you'll just need to open a standard cash account. This means that you can only buy stocks to an amount equal or less to what you have in your account. This is the most sensible option if you are just starting out.

    If you have a slightly higher appetite for risk, then you might consider opening a margin account. This will allow you to trade with leverage, meaning that you can trade with more money than you actually have in your account. Take note, margin trading is especially risky. If your trade is liquidated because the trade went against you, you'll lose your entire stake.

    A CFD account is ideal if you are looking to place more sophisticated trades. For example, CFDs allow you to go short on a stock, meaning that you are speculating on the asset going down in value. CFDs are also easier to trade, as you will never have any concerns regarding liquidity. Finally, CFD platforms are often fee-free, as the underlying asset does not actually exist.

    A Stocks and Shares ISA account allows you to invest in stocks as you normally would. The key difference is that you can protect some of your profits from tax. In fact, the 2019/20 tax year permits up to £20,000 in capital gains before capital gains tax is due, so it's well worth opening an ISA account at your respective stock broker.

    Factors to Consider When Choosing an Online Stock Broker 

    • Account minimum – Most UK stock brokers will require you to make a minimum deposit. The specific amount will vary depending on the platform. While some will allow you to get started from just £10, others will require £100 or more
    • Fees or commissions – It is crucial that you are aware of the fee structure at your chosen stock broker. This should include deposit and withdrawal fees, trading fees, and funding fees. Most brokers are upfront about what they charge, while others aren’t.
    • Availability of stock analysis tools – You should also assess what research tools the platform provides. At a minimum, this should include fundamental analysis on certain stocks, and technical indicators for those of you that like reading charts.
    • Customer service and support – A fully-fledged customer support department is crucial in the online stock space. Stick with platforms that offer 24/7 customer service across multiple channels. This should include telephone support, email, and live chat.

    Conclusion

    If you've read our guide on the Best UK Stock Brokers of 2020, you'll know first-hand just how difficult it is to find a suitable platform. While some of our readers look for brokers with the cheapest fees, others prefer to stick with established platforms with decades of experience. Either way, you are now armed with the required knowledge to go and find a suitable UK stock broker.

    Ultimately, you need to ensure that the broker is in receipt of the required regulatory licenses, and that it does not have any hidden fees. Moreover, it's also important that the broker puts the customer experience at the heart of everything, and that trades are executed in good faith.

    FAQs

    What is a stock broker platform?

    A stock broker platform is an online trading arena that allows you to buy and sell shares at the click of a button. Everything at an online broker is automated via cutting-edge technologies, so there is no longer a requirement to speak with somebody over to phone to trade!

    Do I need to choose my own investments?

    You will be required to choose your investments when using an online stock broker. Platforms will not be able to give you any advice unless they are legally qualified to do so. If you do want somebody to manage investments on your behalf, you will need to go with a mutual fund.

    What is the minimum deposit required at a stock broker?

    This will depend on the broker in question. While some brokers require a minimum deposit of £100 or more, others allow you to get started with just £10.

    Are UK stock brokers regulated?

    All stock brokers operating in the UK must be regulated by the FCA. This ensures that the platform operates within the law, and that it utilizes segregated bank accounts for client funds.

    Should I trade with leverage if I am confident about an investment?

    Leverage allows you to trade with more money than you have in your stock broker account. While this can amplify your profits, it can also amplify your losses. As such, you should only trade with leverage if you are an experienced investor and you know how to set up sensible stop losses.

    What if I need to cash my stock investments out quickly?

    You can sell your investments at any given time during standard market hours. The specific hours will depend on the stock market the shares are listed on. If you try to sell the shares outside of standard trading hours, you will need to wait until the markets reopen.

    Will I receive dividends at an online stock broker?

    Stock brokers are legally required to distribute dividend payments as soon as they receive them from the respective institution. Don't forget, if you're trading CFDs, you won't be entitled to dividends as you do not own the underlying asset.

    UK Trading - A-Z Directory

    Kane Pepi

    Kane holds academic qualifications in the finance and financial investigation fields. With a passion for all-things finance, he currently writes for a number of online publications.