Are you looking to dabble into the stock market, but are unsure of the best UK stock broker? If so, you’ve certainly come to the right place. There’s a new wave of zero and low fee platforms such as Robinhood and Freetrade, competing against older institutions such as IG and Hargreaves Lansdown. Then there’s the likes of eToro which sit somewhere in the middle by offering a slick, beginner-friendly interface with a comprehensive list of blue chip stocks to boot.
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, 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
eToro - Invest in shares with 0% commission
- 0% commission on stocks
- No markup, ticketing fees, management fees
- Fractional shares available
- Easy to use platform
Best UK Stock Brokers
Who are top online brokers for 2020? We cast our eye on these six FCA regulated platforms.
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 – Safest Stock Broker 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. Among its most coveted offerings are tech stocks such as Netflix, Amazon and Apple, and big British blue-chip stocks such as British Airways, BT and Tesco. The coronavirus pandemic has seen it add a host of pharmaceutical stocks to its platform.
eToro is also popular because of its industry-leading fee structure. Long (BUY), non-leveraged stock purchases do not incur any commission or spread. This means you can buy a physical, underlying stock asset and you won't get crippled with trading fees. These orders incur small conversion and withdrawal fees instead.
Leveraged positions (the max leverage for UK customers is 5x) and short selling orders (a great option if you feel a stock is going to lose value) incur standard overnight and weekend fees.
eToro permits deposits and withdrawals via multiple channels, including debit/credit cards, e-wallets, and a bank transfer. It allows you to deposit up to £2,000 without submitting id. Its most novel feature is it's copy trading functionality, which allows you to mirror the trades of successful stock investors on the platform.
- Pay zero commission and stamp duty
- FCA regulated and very respected in the UK
- Option to copy successful stock traders
- Copy trading involves higher spreads
- Customer support does not operate 7 days per week
2. Capital.com - Trade on a highly advanced and AI-Powered platform
Founded in 2016, Capital.com has gone on to create a highly advanced and highly intuitive stock trading platform that’s specially designed for the confident trader. Traders have access to over 2000 financial instruments traded in the form of CFDs. Among the variety of instruments that can be traded are local and international stock and shares available with leverage up to 1:200.
Capital.com trading platform has three key selling points: First is its highly advanced, feature-rich, and AI-powered trading platform. It features not just a wide range of tradable securities from multiple markets but also a wide array of technical indicators, risk management tools, and an intuitive interface with advanced charting tools. Plus it can also be customized.
Secondly, Capital.com is authorized and regulated by the FCA in the UK and CySEC in Cyprus. Lastly, it employs high-quality security standards in keeping user accounts safe in addition to maintaining client funds in segregated bank accounts.
To activate a Capital.com stock trading account, you need a minimum initial deposit of £100. Trading stocks is commission-free and you get to enjoy market-leading spreads.
- Follow market data and prices for different products in real-time while enjoying fast order execution speeds
- Trade a highly advanced and AI-powered proprietary trading platform
- You also get to monitor your portfolio and trade on the move via the broker’s mobile trading app
- Capital.com accounts can’t be hosted on the conventional MT4/MT5 trading platforms
- The maximum leverage for non-professional traders is 1:30
3. FXCM – Trade with one of the most reputable online brokerages in the UK
FXCM, also referred to as Forex Capital Market, is an established share and stock CFD broker. Founded in 1999, the CFD brokerage has over the years undergone significant adjustments that have seen it come off as one of the most reputable brokerages in the UK. FXCM is, for instance, the major shareholder of Jefferies Financial Group – a Fintech company that’s listed and publicly traded on the New York Stock Exchange (NYSE).
On the broker’s platform, you get to trade a wide range of securities, including the stock and share CFDs, drawn from all the major money markets in the world. Among its unique features include the fact that it is highly regulated by FCA in the UK, ASIC in Australian, and South Africa’s FSB.
Additionally, the many years FXCM has been in operation has allowed the broker to improve on its trading platforms and come up with one of the most advanced trading platforms. Here traders get access to highly sophisticated trading, market analysis, and risk management tools.
To activate an account here, you will need a minimum initial deposit of £50. The broker doesn’t charge deposit/withdraw fees, and it’s trading fees are variable but highly competitive.
- Supports a wide range of trading platforms including MT4/MT5, Ninjatrader, Zulutrader, and Trading Station
- Access up to four types of stock trading accounts with highly competitive spreads
- Interact with the brokers easy to use the platform and the host of both trading, research and market research tools
- One may consider the number of securities supported by the trader to be rather limited
- There is no guarantee you will qualify for the maximum leverage when trading stock CFDs
4. Plus500 – Trade the widest range of Share/stock CFDs from international markets
Plus500 is a well-reputed online stock brokerage with its headquarters in London. It is a pure CFD brokerage specializing in a variety of financial assets, including shares and stocks from different local and international exchange markets (such as the U.S, Germany, and entire Europe).
Established in 2008, the online brokerage has come up with one of the most sophisticated trading platforms. It integrates highly advanced technical indicators, customizable charts, and trade/market analysis tools. More importantly, Plus500 doesn’t charge trade commissions and maintains variable but highly competitive stock CFD spreads.
And all these have positioned Plus500 as the perfect choice for the experienced stock CFD traders.
To start trading share/stock CFDs with Plus500, however, you first need to create an account with the broker, complete the KYC and AML verification processes, and fund it with a minimum of £100 if depositing via debit/credit card and £500 when making a bank transfer.
- Plus500LTD UK is authorized and regulated by the FCA in the UK and seven other top-tier financial regulatory agencies across the world.
- Plus500 supports several popular payment processors for deposits/withdrawals - including PayPal.
- Plus500 enjoys a global reputation especially since its parent company - GAIN Capital - is listed with the London Stock Exchange (LSE).
- The online broker features 2000+ CFDs, allowing for portfolio diversification.
- The account registration and identity verification is straightforward and takes less than a day.
- The broker is biased towards experienced stock CFD traders.
- Charges inactivity fee of £10 per quarter after three months of inactivity
- Plus500 pays little attention to trader education and training.
5. IG - Best for most regulated online brokerage
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.
- Amazing charting package
- Impressive educational library
- Cheap trading cost
- Limited research and educational tools
- No tax-advantaged account options
6. Robinhood - Best for Commission-Free Trading
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.
- Zero-free stock trading
- 5,000+ stocks listed
- Access to ETFs and bonds
- Spreads are often higher than traditional brokers
- No mutual funds or bonds.
7. 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.
- Access to global stock exchanges
- Strong regulatory standing
- Simple to deposit funds via a UK bank account
- Platform could be more user-friendly
How We Compare 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? 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.
i) 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.
ii) 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. Note: at eToro you can deposit up to £2,000 without submitting KYC.
iii) 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.
iv) 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. The platforms on this page allow you to buy the physical underlying stock, or trade them using leverage (which of course, means paying a spread).
v) 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 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. Etoro requires a minimum deposit of £200, Plus500 is a bit lower at £100.
- 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.
Stock Brokers Near Me
By leveraging technology, popular online stock brokerages have managed to bridge the gap between the service providers and their clientele. Over the past few years, leading brands like eToro, FXCM, and Capital.com have established a global online presence and expanded ways through which clients can get in touch with their customer support teams. Through emails, social media messaging, telephone, and live chat correspondence, anyone with a phone now has near-instant access to their favourite brokerage.
Others, like Barclays and Saxo, have a broad online and high street presence. In addition to addressing different customer queries and offering trade assistance via email, live chats, social media, and even over-the-phone, they also have physical offices that you can walk into looking for stock trading assistance.
The establishment of an online global presence and opening up the banking halls to offering stock trading assistance is an appreciation of the consistent rise in the number of people who are directing their investments towards stocks.
Conclusion – The Safest Stock Broker
Our top broker for buying stocks is eToro due to its favourable fee structure (0% commission and stamp duty on purchasing the underlying asset), beginner-friendly platform and FCA regulated license. It also gives traders the option to trade stocks with leverage and to copy the moves of successful stock investors. There’s a vast array of blue-chip, tech, pharmaceutical and LSE stocks to buy.
If you’re looking for more flexibility with order execution, then IG and De Giro are worthy platforms. Meanwhile, Plus500 has built a strong reputation as a stock CFD website.
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. eToro does just that.
eToro - Invest in shares with 0% commission
- 0% commission on stocks
- No markup, ticketing fees, management fees
- Fractional shares available
- Easy to use platform
What is a stockbroker platform?
A stockbroker 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 the phone to trade!
Do I need to choose my own investments?
You will be required to choose your investments when using an online stockbroker. 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 stockbroker?
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 stockbrokers regulated?
All stockbrokers 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?
Stockbrokers 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.