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Online Investment Platforms

19/09/2018

The Basics

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.

 

 

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

 

Is It Right For Me?

Good if you ...

  • Want an easy life
  • Want to consolidate everything
  • Want online access 24/7

Not Good if you ...

  • Want to deal direct with dinosaurs
  • Like only getting paper statements
  • Want to avoid admin fees of 0.25% - 0.45% p.a.

People like you ...

Of females in their 30's, only

30%

identify as feeling confident enough to pick their own investment

The Numbers

The Benefits

• 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 in one place

The Detail


A simpler way to buy and hold investments

In the old days, people used to use either a stockbroker (to buy shares, obvs) or 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 Boring.
Cue the advent of the 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 can mean regular saving with minimal willpower and effort.


If you hold an ISA, a Junior ISA, shares, funds or a SIPP (self invested personal pension) 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.)


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’ (which we explain in our Funds Guide) 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 (a DIY pension) there as well, look out for any extra £ charges too – this could bump fees up by another £100 odd quid a year.


Help me choose

 

Our Best Buys page on the Boring Money website will show you who we rate and why. We also segment the providers according to who is the most helpful for less experienced and less confident investors.

www.boringmoney.co.uk/best-buys

 

In our recent Consumer Investment Awards co-hosted with The Telegraph, AJ Bell Youinvest took the prize for the Best Online Investment provider as voted by consumers.

 

In our recent Consumer Investment Awards co-hosted with The Telegraph, The Share Centre took the prize for the Best Customer Service as voted by consumers.

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