Which broker should I use?

TL;DR – Compare the UK’s cheapest online brokers

This is a very common question and fortunately one that has been analysed in detail. Investors choose brokers for different reasons. Two of the most common reasons are: cost and product availability.

There are other factors that may influence your decision including choice of accounts, reputation, customer service and the overall experience of the platform you use (some people prefer web others mobile, some platforms are slick others clunky).

Cost

Keeping costs down is key for long-term investors. Broker fees eat into your gains, eroding your wealth over time. The less you pay the better. Brokers usually charge a fee for holding your investments on their platform, and also each time you make an investment.

Each broker has a slightly different target market – some are geared towards frequent stock trading whilst others focus on investment funds which are normally held long-term.

To understand what effect fees have on your long-term investments, check out our fees article.

Products

Before you open an account with a broker, check it offers the investments you want. Popular low-cost brokers like Vanguard only offer their own funds and ETFs – you can't buy shares; T212 focuses on shares and ETFs but at the time of writing doesn't offer non-ETF funds. You can usually check what's available on the broker website or app.

Account Type

ISAs, LISAs, SIPPs – some brokers offer all of these accounts but others don't. There are not a huge number of LISA providers, for example.

Some people like all their accounts with one provider and others don't mind using multiple providers. It's definitely worth checking the types of account available with a broker you're considering. Their website or app will list the types of account they offer.

Comparison

The guys over at Monevator have put together a comprehensive analysis of the UK’s cheapest online brokers. It's so good it's not worth trying to re-create here, so follow the link and have a read to make your decision.

In order to use the table you'll want to have some idea of:

  • The size of your portfolio
  • The types of products you want to invest in (OEIC funds, ETFs, individual shares)
  • How often you will buy and sell