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How do you buy a share? A stock? A bond? You buy them on an investing platform! And yes, the pictures in this blog are platform shoe themed.
First of all, if you haven’t done it yet, you should decide the wrapper you’re going to use for your investments. Once you’ve picked between your pension, an ISA or neither, now it’s time to choose where you’ll open an account.
You should be picky, because although the terms and conditions on one platform seem virtually identical to another, those small changes matter more than you think. Choosing the right investment platform could be the difference between you bossing it with your investments, and you accidentally buying into the wrong funds and paying through the nose to use your platform just for the pleasure of losing money.
The first rule of Bronni’s Investing Club is that I’m not a financial adviser, the second rule of Bronni’s Investing Club is you can both lose AND gain money when you invest, there is risk involved.
Choice
You can’t buy every single stock, fund or bond on every investing platform. There are some platforms which are an open marketplace, there are others where you can only choose funds compiled by the platform itself, and there are even ones where you only need to decide on the level of risk you’re comfortable with. I’ve sorted the investment platforms below by how much choice each one gives you. There are so many more platforms than just the ones I’m mentioning here, Money to the Masses has in-depth reviews on pretty much all of them.
You might initially be tempted to plump for the platform with the cheapest fees and biggest choice, however, it’s easy to go wrong. When I started investing in my SIPP I accidentally chose the wrong class of investment and lost out on compound interest. Sometimes, it’s better to pay slightly more and go to a specialist greengrocer than walk into a giant superstore with no idea what you’re buying. If that metaphor makes any sense.
Fees
The reason you started investing was to make your money go further, right? So it’s a bad idea to sign up to an investment platform that charges hefty fees that eat into your profits. Every platform should explain the fees for you, but you can read a more general explainer on the Money Advice Service.
Even a .5% difference in fees can be HUGE over the lifetime of your investments. Some platforms charge a flat monthly fee, while others use a percentage of what you’ve invested. If you’re only investing a small amount (probably most of you) then a flat fee isn’t going to be a money saver. People dropping thousands upon thousands into investments will usually find a flat fee better value.
Special features
Some of the more modern platforms offer cool options like ethical investing and spare change round-ups. It could be worth paying a little extra for fees if you think they’ll make your life easier, or encourage you to invest more often.
I’m a big fan of any platform that gives you a simple breakdown of how your investment is performing as soon as you log in. I love a good graph.
Want to talk about investments in a judgment-free zone? Join the Bronni’s Investing Club Facebook group.
Simple options
We’re now in the roaring twenties, and the way we invest has changed. Apps and Messenger investing bots exist now and they’re really clever. If you think you’re clueless when it comes to investing, these shiny new accounts use easy to understand terms and have very cool features to encourage you to invest. These both allow you to invest with teeny tiny sums of money, too.
Moneybox
This app-based platform allows you to link your current account and round up your everyday spends to the nearest pound, then invest that money!
It also has various investment wrappers available, a stocks and shares ISA, a stocks and shares LISA and a general investment account.
The minimum contribution for all accounts is just £1 – perfect for dipping your toe in.
What can I invest in?
Through Moneybox you can choose between three collections of funds named Cautious, Balanced and Adventurous. The choice is that simple, I promise. Once you’re on the app you can click through and see what the fund allocations are, but to generalise: the higher the risk, the more shares they’re invested in, and the lower risk choices contain more bonds.
Still don’t know a stock from a bond? Please read my investment glossary.
Bronni’s one sentence review: a great choice for nervous investors as you can start with £1, fees are on the high end but not extortionate.
Plum
You can use this app and Facebook Messenger bot to analyse your spending and it says it’ll move amounts you can afford into savings for you. You can ask it to save less or more if you like. It also offers the same roundup feature as Moneybox if you’d prefer to save that way.
Plum only offers investing through a stocks and shares ISA, so if you have one already, it might not be the best option.
What can I invest in?
Again, there are three options – conservative, balanced and growth.
You can use my referral link if you like – if three people sign up I get £15. Stingy!
Bronni’s one sentence review: Plum gets you twice on the fees, a normal account management fee, plus £1 a month, it could be pricey if you’re only investing small amounts.
Medium choice
So, you understand investing a bit, you’re also someone who can be trusted to set up a direct debit or move money over to your investment account all by yourself. That’s fantastic. These two platforms allow you to select what to invest in from a bit of a wider pool, but you still aren’t able to be wilding out investing in individual shares.
Getting bogged down in the jargon? I’m sorry! I’ve written this investing terms glossary to help you out.
Nutmeg
Nutmeg is a new-ish investment platform that offers stocks and shares ISAs, LISAs, and a pension. The minimum initial investment for a S&S ISA is £500, or £100 for a Lifetime ISA.
What can I invest in?
There are 25 set portfolios you can choose from at Nutmeg. There are five Fixed Allocation Portfolios ranging in risk levels, the stocks contained in these don’t change, hence “fixed”. Nutmeg also have Fully Managed Portfolios, ten which they brand as socially responsible, and ten more general ones. In each case 1 is the lowest risk, and 10 is the highest. We learned about managed funds in this blog post, right?
If you want to be referred by me, we both get £100 if you use this link.
Bronni’s one sentence review: A bit more freedom, but easy to understand and I love the graph of how your investment is performing – if you’ve got £500 to invest this is a solid option.
Vanguard
This is probably the most popular platform I see other money bloggers talk about. They offer ISAs, Junior ISAs, and personal pensions (brand new for 2020). Vanguard is famous for having incredibly low fees, which explains its popularity.
What can I invest in?
Compared to Nutmeg there’s a lot more choice, there are thousands of funds available for you to choose from. However, they are all Vanguard funds, and they’re all either tracker funds or ETFs. If you had a particular fund in mind from a different company, you won’t find it here.
Bronni’s one sentence review: The fees are a bargain, the choice can be overwhelming but it’s hard to go wrong with the platform’s famous LifeStrategy funds as a starting off point.
Complete freedom
Most of the “big names” in investment platforms operate like this. You can buy individual shares of companies as well as funds from the platform itself and other investment platforms. You can buy a Fidelity fund from AJ Bell and vice versa, if you should wish to.
Interactive Investor
Also known as ii, Interactive Investor is an open marketplace for stocks, shares, funds, currencies, bonds, gilts and more. It offers its own stocks and shares ISA, junior ISA and a self invested personal pension (SIPP).
What makes it different, and popular with high rollers with more than £50k invested, is that it charges a flat monthly fee of £9.99 instead of a percentage.
Bronni’s one sentence review: Probably not one for beginners due to fees eating up much or all of any profit you make, but it’s an award winner for those with a big portfolio.
Hargreaves Lansdown
Pretty similar to ii, in function, you can buy pretty much any investment product you like here. HL offer a SIPP, stocks and shares ISA, a Lifetime ISA and more. The landing page is easy to understand, and its fees are pretty standard if you have a smaller portfolio. For the Hargreaves Lansdown stocks and shares ISA you can get started with only a £100 investment, or a £25 a month Direct Debit. For their SIPP, I only contribute £20 a month with a £5 government match.
What I love about Hargreaves Lansdown is that if you call them, you actually get through to a real person very quickly. I switched an old pension to them, and yes, it took ages but it wasn’t their fault and they kept me in the loop.
Bronni’s one sentence review: My HL pension is where I got started with investing, and I can vouch for their amazing customer service – be careful choosing investments as they can all look quite similar on this platform.
