Among the zero commission brokers that have helped shake up the investment world in recent times are eToro and InvestEngine. Both are part of a move towards making it easier than ever for non-professionals to trade and manage investments online. But while there are several similarities between the two, there are also some key differences to be aware of. So, we take a look at how they compare.
What is eToro?
eToro was founded in Israel in 2007 and launched into the 0% commission market in 2019. It has an app and an online trading platform, but its differentiator is that it’s a social trading platform where users can copy the trades of more experienced investors.
What is InvestEngine?
Launched in 2019, InvestEngine is now one of the UK’s fastest growing investment platforms. It’s an ETF-based platform that allows investors to either build and run their own 0% commission DIY portfolios or use its Managed Portfolios.
Both firms are regulated by the Financial Conduct Authority (FCA) and covered by the Financial Services Compensation Scheme (FSCS).
What do they offer?
The fund options for both are limited to ETFs.
eToro provides trading, money and stocks and shares ISA accounts (the latter recently made available through its partnership with Moneyfarm), but no Cash ISA, Junior ISA or Lifetime ISA.
Investors have access to stocks and shares, ETFs, commodities, CFDs, currencies and cryptocurrencies. Its main differentiator is the availability of copy trading and copy portfolios. The minimum initial investment for UK investors is US$50 for stocks and shares, with minimum deposits of US$10 after the first deposit has been made.
InvestEngine offers a general investment account (GIA), stocks and shares ISA and Sipp but no Junior ISA, Cash ISA or Lifetime ISA. It currently has more than 800 ETFs to choose from. The minimum initial investment is £100, or you can deposit £10 a week through its Savings Plans. Its proposition also includes risk-based Managed and LifePlan global ETF portfolios run by its own investment team.
Costs and charges
As zero commission brokers, neither charges commission on stocks and shares or ETFs and there are no account opening or management fees.
eToro charges fees with withdrawals and on accounts left inactive for a year or more. There are also currency conversion fees (which vary) and cryptocurrency fee of 1% for buy/sell and 2% for transfers.
With InvestEngine there are no account or trading fees for DIY investing. If you open a LifePlan or Managed portfolio you’ll pay 0.25% a year plus ETF costs averaging 0.12%.
Research, tools and features
InvestEngine’s website has an Insights section featuring blogs and market commentary and an education series featuring a range of videos but no additional written guides or content.
eToro provides articles, guides and an economic calendar. It recently launched new tools including portfolio composition breakdowns, risk analysis, expected dividend income tracking and portfolio benchmarking. For new investors there’s also the eToro academy, which offers a range of podcasts, webinars, courses and tutorials.
User experience
Customer reviews on consumer website Trustpilot give a good idea of overall customer satisfaction. eToro’s 4.1 rating is based on 27,190 reviews, while InvestEngine has a 4.6 rating from 1,724 reviews.
Bear in mind that InvestEngine asks its customers for reviews, but Trustpilot states it has no recent records of eToro asking their customers to review them. Overall, businesses that regularly invite their customers to write reviews tend to have a higher TrustScore than businesses that don’t, which may account for some of the higher rating for InvestEngine.
The eToro app has a score of 4.0 on the App Store (based on 11,400 ratings), while InvestEngine has a 4.8 rating from 4,800 reviews.
Quickfire pros & cons
eToro pros
- In-depth education and support resources.
- Access to social trading and portfolios.
- Advanced trading tools.
eToro cons
- No Cash ISA or Junior ISA.
- Platform fee for ISA (through Moneyfarm).
- Fees for withdrawals and inactivity.
InvestEngine pros
- Offers SIPP with no fees.
- App and website are easy to navigate.
- Managed and LifePlan portfolios option.
InvestEngine cons
- No Cash ISA or Junior ISA.
- Relatively limited education and support resources.
- Sipp transfers only available for Vanguard Sipp customers.
Our conclusion
Your best option is to use our free and easy-to-use platform comparison tools to find out what you’d potentially be charged for the type of investing you want to do.
