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Online Investment Platforms

The basics of online investment platforms

In a nutshell

  • Decently priced one-stop shops

  • Hold shares, funds, ISAs and pensions here

  • All-in fees of about 1.2% a year including funds

What is an online investment platform?

Think of a platform a bit like an online supermarket or a department store. It's one online account where you can hold your shares, funds, ISAs and even a pension under a single roof. This one-stop shop makes the boring admin of your investments so much easier – one password, one account, one tax statement... you get the point!

These days they are more user-friendly than ever. Even the least confident can still have a walk through some decision trees and pointers which will guide you into a mixed bag of investments. If you really feel unsure then look at a 'robo adviser' alternative which will do it all for you, although these guys typically are less established brands.

Is an online investment platform right for me?

Of females in their 30s, only 30% identify as feeling confident enough to pick their own investments, which is where online investment platforms can prove especially handy!

Most platforms will let you buy funds, shares, and/or exchange traded funds. And you can also decide whether to put these investments in a trading account, an ISA, or a DIY pension - referred to as a 'SIPP'.

The other benefit of most investment platforms is that these days they have helpful tips and pointers for those of us who don't have the foggiest where to start or what to pick.

Most will have fund shortlists and research analysts will have compiled their top picks. If this is still more choice than you want, many offer ready-made portfolios - a sort of Blue Peter, here's-one-I-made-earlier.

The rather packed chart above gives you an at-a-glance list of what each provider is offering.

The benefits of online investment platforms

  • One of the easiest ways to access the stock market

  • Ready-made investment choices allow you to benefit from diversification

  • All-in costs should be less than about 1.2% a year

  • Keep your Junior ISAs, ISAs, and pensions all in one place

What you need to know about online investment platforms

A simpler way to buy and hold investments

In the old days, people used to use either a stockbroker (to buy shares), go to a fund manager to buy funds or an ISA, and/or use an adviser to get a pension. This took a lot of time, was often managed on the phone or via snail mail, and it could mean people had several different accounts for different bits of their savings and investment affairs. Which is all deeply... well, Boring.

Cue the advent of the online investment platform. These things started about 20 years ago in Australia and the US, and first hit the UK back in about 2002. Now you can go to one single online source for most of your investment needs and it makes life a lot easier. They’re also decently priced and not mired in the opaque, murky charging structures of the past. Direct debits also allow for regular saving with minimal willpower and effort.

If you hold an ISA, a Junior ISA, shares, funds, or a SIPP then we really recommend you think about moving it all onto a single platform.

(Just a word of warning: If this means changing ISA providers, don’t sell up, take it out, and expect to pay it all back in again. You have to keep this stuff in the quarantined ISA environment for tax purposes. Get your new platform to do all the work. Ask them to transfer your ISAs over for you – make them earn it! Keep an eye out for any exit charges or transfer fees though.)

What about the costs?

Most platforms will charge you between 0.3% and 0.45% for the annual administration of your investments – that’s their fee for all the paperwork, account opening, buying, selling, sending you statements, giving you online access and taking your calls.

Expect to also pay about 0.65% – 0.85% for any funds you hold there – this is the fund manager fee and goes to the maths nerds who manage your basket of investments. If you choose ‘passive investments’, it will be nearer 0.1% - 0.25%. As a rule of thumb expect to pay around 1% – 1.3% all in. That’s £10 – £13 a year on every £1,000. If you hold a SIPP there as well, look out for any extra charges too – this could bump fees up by another £100 odd quid a year.

For a clearer view of what platforms are charging, take a look at the fees calculator part of Compare tables.

Help me choose!

Our will show you who we rate and why, as well as what their customers think. We also segment the providers according to who is the most helpful for less experienced and less confident investors. Take a look our Compare tables.