If you want to make your money work as hard as possible you’ll need to engage on some level with the world of investing. And while this can seem daunting, the good news is that it’s never been easier to do this.
Investing has been transformed over the past two decades by the emergence of platforms, which have empowered ordinary investors by providing access to resources that were previously available only to the professionals.
You can run your own comparison using our free comparison tools, as the best platform for you will depend on your own preferences, objectives and circumstances. But with the range of platforms available to investors widening all the time, we pick out five of the features (in no particular order) that will help you decide what a good investment platform looks like.
Costs and charges
This will often be the first thing that people look at. And rightly so, given the drag effect that high fees can have on investment performance. But when it comes to platform charges, we’re not always comparing apples and pears. For instance, recent times have seen the emergence of 0% commission brokers that don’t charge commissions for the trades they execute on behalf of clients. However, they earn their revenues in other ways, while the investment choice will generally be much narrower than that offered by other platforms.
The right one for you, in terms of charges, will depend mainly on the size of your pot and how you run your investments. Some investment platforms (such as interactive investor) charge a flat fee for running your money, which can work well for large portfolios, but most charge a percentage of the amount you invest. Also look out for dealing charges, foreign exchange charges and admin-related fees. For instance, some charge per trade, which will be expensive if you tend to buy and sell lots of investments during the year.
Range of investments
For many investors – but not all – the depth of investment choice is important, including the range of assets and asset classes available as well as the number of funds. The biggest platforms offer thousands of active and passive funds, UK and overseas shares, bonds, investment trusts and other vehicles, while the 0% commission firms tend to offer only exchange-traded funds (ETFs).
Again, what might be helpful for one investor might be too much choice for another. It depends on your investment needs and the extent to which you want to run your own portfolio without your options being constrained by what’s available to you.
Information and resources
If you’re relatively new to investing or simply want to educate yourself, platforms that provide learning materials such as guides, calculators and videos might be attractive (provided you have the time to take advantage). The biggest platforms (such as Hargreaves Lansdown, interactive investor and AJ Bell) offer daily market insights and news, investment ideas, blogs, podcasts and inspiration, often written by in-house experts. Most provide investment guides, fund statistics and research and portfolio-building tools.
For investors who want a helping hand, platforms that also have a choice of ready-made portfolios or investment selections (typically graded by risk level) will be especially useful. These can include lists of select or best buy funds. We cover more about whether you can trust platform’s recommended fund lists.
Account options
Your choice of platform will be heavily influenced by what you need it for. While some people will just want to buy and sell funds or shares, others will want to run general investment accounts (GIAs), individual savings accounts (ISAs), Junior ISAs, Lifetime ISAs and/or Self-Invested Personal Pensions (Sipps).
Only the biggest platforms offer all of these, and the charges and choice will vary. Stocks and shares ISAs and Sipps are commonplace, Junior ISAs are widely available but fewer platforms have cash ISAs or Lifetime ISAs.
Support and service
If you’re trusting your savings and investments to a platform, you’ll want a decent level of customer service and for the processes to work well. For example, whether you use its website or app you’ll expect it to be reliable, easy to use and to have intuitive functionality, with clear instructions and navigation.
Service tends to come into play when problems or questions arise. Do you want to talk to a human being on the phone, or message someone on a live chat? Again, it’s about finding a platform that offers the approach that suits your needs, and the same goes for the quality of customer communications. As with so many things in life, you generally get what you pay for.
So, what does make a good platform?
There are other features to consider, such as accessibility – can you get into your account wherever you are, at any time of day? The way a platform communicates will also be important for some investors – you might want a certain degree or human interaction or perhaps prefer to do everything digitally.
Use our free comparison tools to understand which platforms cater for your investment needs at which price. The individual platform pages will give you an idea of the quality of the service, products and investments on offer. Happy investing!
