By Areena FxWith the surge in DIY investing and app-enabled trading platforms, choosing the right platform for your needs can be a challenging endeavor. This guide breaks down the leading trading platforms of 2023, focusing on their unique features, fees, and consumer trustworthiness.
The Rise of DIY Trading Platforms
In the last decade, the realm of DIY investing has witnessed substantial growth, with app-based platforms leading the charge. Today, the major trading app companies account for a whopping 40% of newly opened investment accounts. Traditional giants like Hargreaves Lansdown, Interactive Investor, and AJ Bell still hold significant market share, but zero-commission platforms like eToro, Freetrade, and Trading 212 are quickly catching up.
These new-age platforms typically earn by leveraging the buy-sell spread rather than charging direct commissions. But with the plethora of options available, how does one make an informed decision?
Spotlight: Best Trading Platforms of 2023
While we’ve researched numerous platforms, we’ve narrowed down our top picks based on the breadth of international shares available, the diversity of investment options, and consumer reviews on platforms like Trustpilot.
Our Selection Criteria: How We Ranked Them
- Diverse Investment Options: We prioritized platforms offering a variety of shares from global markets and those featuring diverse fund managers.
- Consumer Trust:* Trustpilot ratings played a crucial role. For platforms without a Trustpilot presence, we referred to other reputable review sites.
- Comprehensive Features: Our analysis spanned several features, including app availability, customer service, research tools, trading options, transaction fees for foreign trades, and fractional shareholding.
- Regulatory Compliance: We ensured every platform was FCA-authorized and also took into account the volume of customer complaints from FCA data.
To provide a holistic view, we personally interacted with each platform’s customer service during peak hours and gauged their response time and quality.
Fee Structure: Breaking Down the Numbers
When assessing fees, we made several standard assumptions:
Trading Frequency: 24 trades annually, with two trades executed monthly.
- Share Type: Given that not all platforms facilitate fund buying, our calculations were based on UK shares. We assumed any free monthly trades were utilized.
- Foreign Exchange Fees: For non-pound sterling accounts, we evaluated the currency exchange fee based on the portfolio’s total value.
- Platform Fees: We estimated that funds and shares each comprised half the portfolio since platform fees can differ between them. If a platform didn’t offer funds, the fee was calculated assuming only shares were in the portfolio.
- Portfolio Values: Our fee assessment was based on portfolios of £25,000, £50,000, and £100,000.
Conclusion
Selecting a trading platform is a pivotal decision for every investor. Whether you’re inclined towards traditional platforms or lean towards the newer, zero-commission contenders, understanding the features and fee structures is paramount. This guide aims to streamline that process, ensuring you’re equipped to make an informed choice in 2023.