What is an investment platform?
An investment platform, also referred to as an investment provider, broker, or fund supermarket, are online shops in which you buy financial products such as shares, bonds, and funds, through investing accounts such as ISAs and SIPPs. These websites come with tools and research such as historical performance data and investment guides to help you sift through the many thousands of products out there and find the right investment for your financial goals and time horizons.
Some investment platforms, which we call do-it-yourself (DIY) platforms, have a large selection of products, accounts, and tools available for a wide range of needs, and represent the long-established players in the market. Others, which we call do-it-with-me (DIWM) platforms, represent a new breed of simplified, slick investing platforms that offer a limited range of very broad investment funds, designed to get you investing as quickly as possible. Both of these options are known as ‘execution-only’ brokers, meaning they are for those looking to learn a bit about investing themselves and wanting to make their own financial and investment decisions. Within each of these groups, we have analysed ten of the best services on offer.
Our final group, which we call do-it-for-me (DIFM) services, are for those who are perhaps uncomfortable making their own investment decisions and willing to pay for a financial adviser. These are qualified professionals who offer a range of services from cashflow analysis, financial planning, investments and pensions advice, to estate planning. Of course, they come with higher costs than execution-only services. Within this group, we have portals to two third-party websites which will assist you in searching for adviser near you.
Do investing platforms differ much?
Within each of our groups of investment platforms – DIY and DIWM services – you will notice numerous differences which we address in each section of our reviews.
Across all of the platforms you will notice a range of accounts that we class into three groups: individual savings accounts (ISAs – we look at three types), which are government designed, tax-free investing accounts; the Self Invested Personal Pension (SIPPs – we assess two types), which again have been designed by the government and are tax-incentivised to encourage us to invest for retirement; and finally, the catch-all vanilla investing accounts that we call general investment accounts (GIAs), which are for investing outside of your ISA or SIPP.
In addition to assessing available accounts, we also look at the breadth of the investments the platforms offer, which can be quite varied in range across the two groups. Within DIY platforms, some may offer only funds, which are bought directly from the financial institutions running them; others might focus on stock exchange traded financial products such as shares, investment trusts and ETFs; but most offer a very wide range of products indeed. DIWM platforms tend to be much narrower in their focus, offering just a handful of diverse, multi-asset funds that invest around the world. These are great for keeping things simple and getting started.
In addition to these two areas, we then look at the supporting services platforms offer. For DIY platforms, this includes looking at features such as monthly investing, fund research lists, investing tools, news features, and telephone support. For DIWM platforms, given their simplified nature, we look at additional features such as such as the risk questionnaires used to help you decide on your investments, as well as app access and chat support.
Finally, we evaluate costs, which fall under either custody fees for holding your investments or trading fees depending on what you buy. (Don’t forget, when you invest in collective investments such as funds, investment trusts or ETFs, the institution running them will charge a percentage investment fee). Costs vary widely depending on the service you choose.
Do they offer financial advice?
Broadly, investing platforms are a ‘non-advised’ route – hence why they are sometimes called ‘execution-only brokers’ – although a few do have financial advisers and offer advice if you are willing to pay for it. Investing using platforms is really about getting stuck in and learning a bit about investing – which is what we’re here to help with – and choosing the investments yourself. We think this is easy enough if you’re starting out or have relatively simple finances and financial goals.
Our research showed that once you learn a bit about how it all works, anxiety about taking investment risks often reduces. That said, if you still feel nervous about making investment decisions yourself or have complex finances or are perhaps approaching a complex milestone like retirement, it may be worthwhile paying for financial advice to ease concerns. Our do-it-for-me (DIFM) portal accesses two third-party providers that offer help in finding financial advisers based near you.
Can I lose money?
Yes, you can lose money investing. Investing involves risk – it is the only way we can make a return investing in financial assets. Individual assets such as shares and bonds are particularly risky, which is why we suggest diversifying some of these risks by investing using collective investment products such as funds, investment trusts, and ETFs. When markets behave badly – and they will – expect to see some falls. But remember, these are only paper loses – you will only crystallise these into real loses if you click sell at that moment! One of the biggest lessons in investing, particularly when using funds, is that a long-term strategy will reward the long-term investor very handsomely indeed. Look through our material or sign up to our seven-day email course to find our more.
Are they expensive?
Platforms do vary in costs, usually depending on the breadth of investments or services they offer, but they still represent a much cheaper route to the advised one. None-the-less, overly high charges can seriously erode the investment gains you make over time. Our review offers some guidance, but make sure before choosing a platform that you get into the weeds and understand exactly what it is you will be paying.
Can I Speak to someone at an investing platform?
Whether or not you can speak to someone varies depending on the supporting services the platform offers. We look at support services in our reviews.
Are platforms reviews comparative?
Within each of the investment platform groups – DIY and DIWM – we have created a standard methodology that enables you to assess platforms comparatively: with scores for each section as well as an overall score for the platform at the top. Between DIY and DIWM platform there are nuances in the nature of their business models, so we have adjusted for this.