Best value broker/platform

23rd Feb '20 by MattFranks80

29 comments 1590 reads

Hello, I am a new member, and new to equities, although I’m a fairly experienced buy and hold fund/IT investor.

I currently use Hargreaves Lansdown for my IT/etf based ISA, and have recently switched to Vanguard for my index fund SIPP.

I have opened general trading accounts with Trading 212 and Freetrade, but find their list of equities limited.

Can anyone recommend a broker that has low commissions please? I plan on making two small trades of approximately £150-200 per month, until I have a portfolio of approx 25 holdings in a years time.

Thanks in advance

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About the Author

MattFranks80

Premium Member

29 comments

jonesj

24th Feb '20

Paying £5 or £10 on a £150 trade is too high a loss. !Many years ago when I started out, I set a much higher minimum trade size and was prepared to be patient in building a portfolio. So after 6 months, I still only had about 2 stocks.

You could try buying one stock every 4-6 months. In time, you will be diversified and you will also have more time to research the picks. Patience is a virtue in this game.

Lion Tamer

24th Feb '20

I second the above suggestions, but would add this link as worth a look:

https://monevator.com/compare-...

Also whichever comparison site/s you use, check several of the top ranked brokers as the results are highly dependent on the assumptions for your trading pattern. For example about a year ago I moved one of my ISA accounts from II to AJ Bell for a massive drop in fees, as it was a large but infrequently traded ISA account containing only ETFs. However for you II is probably the better of those two.

Overall I would typically recommend IWeb and XO over AJ Bell due to the fees (based on my set of trading assumptions). I run several mixed share & ETF, ISA & SIPP accounts with IWeb & XO and have had no problems. My managing my wife's investments I can open two accounts with each, benefiting from extra portions of FSCS cover.

FSCS cover may not impact you for a few years, but it is worth having multiple broker accounts once you reach a certain size. Its your choice, but maybe at about £100K to £150K. This is more than the £85K FSCS cover limit, but it is unlikely a broker crash would result in a total wipe out. Losses are usually only for losses in the nominee account arising from any historical accountancy errors, rounding errors, etc.

Last "sucking eggs" comment, use ISAs rather than unsheltered accounts. It saves many hours in paper work and one day you'll be pleased for the tax advantages once your portfolio is larger.

Best of luck

Jeremy Rea

24th Feb '20

Yes, there was an issue with IWeb charging full US with holdings tax on Somero Enterprises Inc (LON:SOM) dividends, regardless of whether you held them in a SIPP (where they should be exempt) or an ISA/dealing account and also whether you had filled in a W8BEN to allow you to avoid some of the (double) tax.
Credit where credit is due, IWeb did send me a cheque* for the tax I was out a few months after the issue cropped up. They said several others had been affected as well and after reviewing their policies and procedures they agreed they were not as clear as should be and thus refunded me.

*Accounts that could be credited were, those that could not be credited, I was posted a cheque.

I am unaware of any other issues with tax on overseas companies with other brokers, but the issue above was resolved semi-satisfactorily.

Terry Dickens

24th Feb '20

I am with IG Index and I use there spread betting service, it has a lot of advantages over just buying shares.

But they are also is stockbroker service and they have just reduced the cost of buying stocks from 5 pounds a traded to 3 Pound.

I have found them very helpful and reliable.

Good luck with the trading

RA151010

24th Feb '20

what made you say this week might not be the right time to invest? (She says, as she watched shares/funds all drop significantly today!)

Rusty2

24th Feb '20

Coronavirus outbreak in South Korea. I would keep an eye on the developments, this could blow over or it could get a lot worse.

CRK

24th Feb '20

I use Hargreaves & Landsdown

weycome45

26th Feb '20

Barclays smart investor @ £6 a trade is the cheapest ....

Rusty2

26th Feb '20

Don't Barclays charge a minimum £4 fee per month?

Barclays had an awful reputation not so long ago. Unfortunately in the UK we are still paying high transaction fees, some brokers in the US are not charging anything, many only charge around $5 and we have stamp duty also on many shares.

sharw

26th Feb '20

How can you say £6/trade is the cheapest when x-o charge £5.95 ?

Caper4

26th Feb '20

I really like DEGIRO. Very low fee structure and great site that is so simple to use,. You will get no share info etc etc but that is what Stockopedia provides for me

Rusty2

27th Feb '20

But do they do an ISA account? Had a look on their site and could not see anything.

dmjram

27th Feb '20

No they don't and no plans to do so (nor a SIPP) at the moment from a conversation with them.

Rusty2

27th Feb '20

OK thanks, that's a pity, all my trading now is within ISA or SIPPs.

nickwild

27th Feb '20

My son uses freetrade. If you accept them buying at 3.00PM it is free. They do a bulk deal at that time for all trades He rates them highly as a service.

https://freetrade.io/

HHR

27th Feb '20

Whilst admin costs are obviously important I think the bid/ offer prices your broker can get from the market is equally important especially if you are trading small caps. I started with 2 'boutique' brokers and 2 larger 'retail' brokers and I found for many trades the larger broker would get me better prices at the market than the smaller supposedly quality brokers. Sometimes the small brokers couldn't even get prices in smallcaps but so far the larger brokers have always got me a price even in a panic.

wildshot

27th Feb '20

Just to expand on this for clarity, with an IG share dealing account it is £3 a UK share trade if you've traded 3 times in the prior month. Normally it is £8 a trade. Also with the new pricing structure I think if you've traded 3 times in the last month you can then trade US shares for no fee.

Also they have a quarterly custodian fee of £24, however you can get this back in free trades. Since they brought in the custodian fee I've always transacted at least 3 times in the prior quarter so have not been subject to this custodian fee.

Wurdoomed

13th Mar '20

Morning all, first post, have lurked and procrastinated for a short while however this 'correction' has forced me off the fence. Grateful for some advice from the bigger brain.

I have £750K cash in an AJ Bell SSAS earning zip in interest. I plan on investing £500K imminently on a sharesportfolio I am building, mainly FTSE250 companies.

Which broker would people advise I should use (cost and service) , and will AJBells scale assist in the deals I can get ?

thanks folks

W.D.

Caper4

13th Mar '20

I use DEGIRO and very happy with them. However,they give zero investment advice but this site is better than anything out there IMHO

Wilbraham

16th Mar '20

Some 'insider' comments last week from DonkeyApple over on Pistonheads - he works in the brokerage field:

DonkeyApple

36,126 posts

120 months

NickCQ said:fourstardan said:I'm pretty interested after doing the demo portal.Not an expert on these by any means but I have often heard rumours that the ‘demo portals’ give you better odds than trading for real - ie they hook you with early ‘gains’ that don’t cost anything and then drain your account thereafter.Certainly true with some MT4 brokers as there is a back end plugin that allows you to feed two pricing streams as well as to manipulate demo trades so the prospective client gets a higher ‘win’ ration. Not permitted but if your a Russian gangster using a Cypriot front then no one is going to stop you.

The IG feed to their web platform has historically always been the same feed whether demo or real.

Fills on smallcaps will always be poor as you need to hedge with physical at the same time as filling the client because you don’t run that flow through your book. Everyone has the same issue but in my opinion as one of the longest standing people in this industry is that leverage is not appropriate for these markets. They are already high enough risk and volatility ungeared and adding leverage just blows away any risk/reward metric.

Leverage is for highly liquid, less volatile instruments where you are looking to use risk to increase reward while keeping the ratio in your favour.

IG have stripped back their customer service but they’ve had no choice as the client base has dumbed down while also their average account size has shrunk from tens of thousands to just a few thousand and a lot of business has been soaked up by the crooked offshore shops that look cheaper but are much more expensive in reality.

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MattFranks80

29 comments

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