Unlock the Secret Playbook: How to Choose the Ultimate Online Broker That Will Skyrocket Your Wealth in 2024
Our ‘Good for’ choices are purely cost-based. We assume 12 buy and four sell trades per year.
Using the full table
We divide the major UK brokers into four camps:
- Flat-fee brokers – these charge one price for platform services, regardless of the size of your assets. In other words, they might charge you £100 per year, whether your portfolio is worth £1,000 or £1 million. Generally, if you’ve got a large portfolio then you definitely want to look here. Bear in mind that fixed fee doesn’t mean you won’t also be tapped up for dealing monies and a laundry list of other charges.
- Percentage-fee brokers – this is where the wealthy need to be careful. These guys charge a percentage of your assets, say 0.3% per year. For a portfolio of £1,000 this would amount to a fee of £3 – but on £1 million you’d be paying £3,000. Small investors should generally use percentage-fee brokers. However even surprisingly moderate rollers are better off with fixed fees. Many percentage-fee brokers offer fee caps and tiered charges to limit the damage.
- Zero-fee brokers – these fresh upstarts apparently don’t charge you at all. Their marketing departments have it easy, simply pointing to £0 account charges and trading fees costing diddly squat. So why don’t these firms go bankrupt? Because they make up the difference using other methods. Revenue streams can include higher spreads, no interest on cash, and cross-selling more profitable services.
- Trading platforms – brokerages that suit active investors who want to deal mostly in shares and more exotic securities besides. Think of noob-unfriendly sites like Interactive Brokers, Degiro, and friends.
Our table looks complex. But choosing the right broker needn’t be any more painful than checking it offers the investments you want and running a few numbers on your portfolio.
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