How to choose the best and cheapest investment platform and DIY investing ISA
In this article we provide a definitive guide to investment platform comparison including the:
- Cheapest investment platform for £50,000 investment
- Best all-round investment platform
- Best investment platform for beginners (someone else manages your money)
Investment platforms explained
- An investment platform is a website or smartphone app where you can buy and sell investments, such as funds, investment trusts, ETFs, stocks and shares
- They allow you to invest in these assets either directly or via products such as Stocks and Shares ISAs, Junior ISAs, Junior SIPPs, Lifetime ISAs or a Self Invested Personal Pension (SIPP)
- As such investment platforms are also known by other names such as fund platforms, online brokers, fund supermarkets, SIPP providers or ISA providers. For the rest of this article, we will call them investment platforms for ease
- Investment platforms are ideal for DIY investors who want to make their own investment decisions (although some offer discretionary management - see best investment platform for beginners) and keep investment costs to a minimum. The cheapest & best investment platform will depend on how much you have to invest and the types of investments you plan to hold
- Over recent years more investment platform providers have entered the market providing the DIY investor with a wealth of investment choice and services whilst driving down the costs involved with investing
- DIY investors can now enjoy a whole range of tools together with up-to-the-minute research, often available on their smartphones, to help improve their investment returns. This article sets out the cheapest investment platforms and the best investment platforms (as they are not necessarily the same)
- DIY investing is no longer the preserve of the wealthy as investments can be made for as little as £1 per month, thanks to the competition between investment platform providers
Investment platform providers
- There are currently around 20 investment platform providers in the UK.
- Some investment platform providers offer only a limited range of investments which you can hold through them while others offer a wider range of investment products
- When you compare investment platform providers it is advisable to choose one that allows investment in shares and/or funds both directly and via a Stocks and Shares ISA, Junior ISA (JISA) or Self Invested Personal Pension (SIPP)
- Even if you are looking to invest via a SIPP you shouldn't just focus on finding the cheapest SIPP provider as you may want to take out a Stocks and Shares ISA in the future. If you hold them both on the same platform it can reduce costs and make administration easier
- Therefore selecting the best investment platform with a broad range of investments available will provide you with flexibility going forward
- Investment platforms are very different in the charges they levy to manage your investment portfolio so make sure you read the information on charges (including SIPP charges) in this article so you can choose the most cost-effective investment platform.
Best investment platform providers
Deciding on the best investment platform provider for you will depend on your personal circumstances and your investment goals. Some are best for those wanting a helping hand, as they offer good tools and guidance, while other investment platform providers may be better for monthly savers, for example.
We have compared over 20 investment platforms to produce a list of the best and cheapest fund platforms.
Best all-round investment platform
Interactive Investor* - (for a combination of cost, investment choice, customer service and useful online tools)
Best investment platform for beginners (someone else manages your money)
Wealthify, Nutmeg - (Leading robo-advice investment platforms that will run your money fee-free for a year. Terms and conditions apply. Check out our review for more information) or Moneyfarm* (Moneyfarm is one of the leading robo-advice propositions and will run your money free of charge for up to one year if you open a Stocks and Shares ISA*)
Best investment platform for monthly savers
Best investment platform for low dealing charges
Best investment platform for tools and research
Hargreaves Lansdown*, Fidelity*
Best investment platform for passive investors
Interactive Investor* - (low annual fee of £60, £144 or £240 depending on the plan you choose), Vanguard Investor (although unlike Interactive Investor you can only pick Vanguard funds)
Best investment platform for £50,000 investment
To find the best investment platform provider for a portfolio of £50k I have only selected investment platforms that provide the following:
- Tools
- Research
- Model portfolios
- Available on smartphone
- No fund switching fees
In making the final choice I did not want to be influenced by cost alone as you should also assess each investment platform provider on the 5 criteria listed above to make sure you choose the best fit for your needs. For the benefit of this research, I have also assumed that the investment is in a maximum of 10 funds with a maximum of 10 annual trades invested over 10 years.
The research narrowed the choice down to the following 4 investment platforms which I list together with the individual net annual cost.
- Interactive Investor* (monthly fee equating to 0.12%, 0.28% or 0.45% depending on which one you choose)
- Charles Stanley* (0.35%)
- Fidelity* (0.35%)
- Hargreaves Lansdown* (0.45%)
Cheapest investment platform for £50,000 investment
If you are only interested in keeping costs low, rather than tools and research, you simply need to compare the charges of each investment platform. However, the cheapest investment fund platform depends on the size of your proposed investment and/or existing portfolio as well as the type of investments you want to hold. No one fund platform will be the cheapest for everyone. Therefore you need to compare the charges of every investment platform provider taking the aforementioned factors into account.
Cheapest investment platform for £50,000 invested in funds
If you plan to invest in funds (as most investors do then you can do this easily using our heatmaps. Our ISA and SIPP comparison heatmaps compare over 20 different investment providers to find the cheapest investment platform for you. Simply decide which heatmap is relevant to you (Stocks and Shares ISA or SIPP) below and then focus on the £50,000 column to find out the investment platform provider with the lowest charges. The heatmaps are colour-coded from red (meaning expensive) to green (meaning cheap). If you plan on adding to your existing portfolio then make sure that you check how your chosen investment platform's charges compare at higher portfolio sizes.
Cheapest investment platform for £50,000 investment in shares, ETFs or investment trusts (assumes a maximum of 6 annual trades made up of 6 buys and 6 sells)
| Platform | Year 1 cost |
| X-O | £75 |
| IG | £96 |
| Interactive Investor* | £108 |
| iWeb | £160 |
Best way to invest £50,000 short term
Investing in funds or shares is a medium to long term investment (in excess of 5 years). Stock markets can be very volatile and investing for the short term is not advised as your investment could reduce in value due to circumstances beyond your control.
If you are looking to invest for the short term then accounts offered by bank and building societies are probably your best option. Click on this link for more information and a useful comparison table - Best savings accounts in the UK.
If you want to invest for the long term and don't know which funds to pick then our 80-20 Investor service will be of interest. Also read how I run my own £50,000 portfolio live on 80-20 Investor.
If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following links can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Wealthify, Hargreaves Lansdown, Bestinvest, Interactive Investor, AJ Bell, Moneyfarm, Fidelity, Charles Stanley
