I have decided to take a look at my current trading platform costs to see if I can get a cheaper one without compromising on quality of service\/range of services or safety.<\/p>\n\n\n\n
So is there a better or best trading platform in the UK for larger accounts? By ‘larger’ I talking investments of circa \u00a3250k and upwards. I spent a good few hours researching the most likely candidates, so let’s see.<\/p>\n\n\n\n
For readers who stumble across this article, who are not familiar with this blog or FIRE, I should clarify a few points. When looking for the best trading platform, I am not talking about day trading, crypto, CFDs or anything along those lines.<\/p>\n\n\n\n
What most FIRE types want is a trading platform that handles; ISA’s, SIPPs & GIAs. Offers index-tracking ETFs and Funds, bonds, shares etc. Facilities like automated monthly investments, dividend reinvestment etc. So if this isn’t you, you’re in the wrong place.<\/p>\n\n\n\n
The FSCS (Financial Services Compensation Scheme) covers you for losses up to \u00a385k per person, per company and all the companies in this article fall under that scheme. Importantly, the FSCS also only covers you for cash holdings in your account and from malpractice by the trading platform.<\/p>\n\n\n\n
For those of us with larger pots, that \u00a385k limit doesn’t offer much comfort. And, even if you are under that amount and technically covered (within the limitations mentioned), I’d imagine the pain, time and anguish of actually getting your money back would be long and worrying.<\/p>\n\n\n\n
Compiling this article has made me seriously think about this and a few other things. So from a safety perspective, my thoughts are this:<\/p>\n\n\n\n
Whilst I think the real risk of loss is small, I still remember all too well the Financial crisis of 2008. The lesson from that is that even the unimaginable is possible.<\/p>\n\n\n\n
So I’m definitely going to split our accounts across a couple of providers (it’s already split across a number of fund managers). Whilst I’m not going to go so far as to not exceed \u00a385k per company, that would be unmanageable, 2 or 3 would be fine.<\/p>\n\n\n\n
Most of the trading platforms covered in the article are owned by large to very large companies, but Trading 212 and FreeTrade are Fintech startups.<\/p>\n\n\n\n
Trading 212 in particular looks ‘interesting’ given it appears the company is registered in Cyprus and Bulgaria.<\/p>\n\n\n\n
Whilst I’m all for startups disrupting the staid and uncompetitive world of financial services, I’m not so keen to risk having lots of my money sitting with one. So I’m going to avoid those types of companies.<\/p>\n\n\n\n
Jon you weirdo, why are you putting the summary mid-way through your article?<\/p>\n\n\n\n
Well, I’m assuming a lot of readers will skim this article, look at who they are with now and look at who’s cheaper using the pricing table. But there are a couple of key points I want people to realise, so I’m putting them here where you’re more likely to see them.<\/p>\n\n\n\n
The best trading platform for you will vary based on a number of factors:<\/p>\n\n\n\n
It came as a bit of a shock to me just how much some brokers are charging for Funds compared to ETFs and it can make a massive difference (we’re talking thousands of pounds of difference if your Fund holdings are sizeable!!). If you hold Funds then Hargreaves Lansdown, AJ Bell & Fidelity will charge you handsomely for it and Freetrade & Trading 212 don’t even offer Funds at all.<\/p>\n\n\n\n
Given how popular the Vanguard FTSE Global All Cap Index Fund is in the FIRE community, this could be an issue for a lot of us.<\/p>\n\n\n\n
The good news is that there are plenty of low-cost trading platforms that don’t differentiate between Funds and shares but it does limit your choice considerably.<\/p>\n\n\n\n
Some brokers don’t offer automated monthly investments at all, some charge for it and some are free.<\/p>\n\n\n\n
Again costs vary significantly, from free to \u00a311.95 per trade.<\/p>\n\n\n\n
If you are nearing pension access age (currently 55) then watch out for extra hidden fees, a number of platforms charge an extra annual fee for drawdown or uncrystallised funds pension lump sum.<\/p>\n\n\n\n