Regardless of whether you are a new or experienced trader, finding the right brokerage for your share dealing is paramount to your success.
I’ve compared fees, investment selection, platform use-ability, and additional features, to bring you my top picks of share dealing accounts.
Also consider: Best Investment Apps UK
Invest Engine – best for lowest cost ETFs
Regardless of your investment style, InvestEngine is probably the lowest cost online share dealing platform available to UK investors. Their DIY portfolio attracts zero platform fees, set up fees, dealing fees, ISA fees or withdrawal fees.
InvestEngine have focused on providing a holistic platform that services the needs of every type of investor, regardless of their level of experience, offering both robo advisory services and DIY options.
Whilst there is a lot to like about InvestEngine, there is one major drawback, being their complete omission of any direct share dealing. DIY investors have the choice of an excellent range of exchange-traded funds.
- Lowest cost platform available
- Excellent customer service
- Suitable for all levels of experience
- No direct share dealing
- No SIPP product
- No ethical investment options
The only fees of note are the individual ETF charges and market spread costs.
- Exchange Traded Funds (ETFs)
Capital at risk.
eToro – best for commission free trading and copy trading
Etoro have a substantial range of financial products to choose from and their commission-free trading make them a popular choice among frequent traders who enjoy the excellent range of financial instruments as well as a plethora of technical analysis tools. eToro also offers access to cryptocurrencies and CFDs from top exchanges from around the world.
However, there is also a lot to attract new traders to the platform, not least the extensive copy trading opportunities which allow you to mirror the trades of more experienced traders. Copy-trading doesn’t only benefit new traders as experienced traders can enjoy the benefit of their Investor Program which offers rewards when others copy their positions.
Another massive draw for eToro is the free Demo account which allows new traders to try the platform completely free of any risk with a starting balance of $10,000 virtual cash.
- Very low-cost
- Market-leading copy trading community
- Virtual account
- Withdrawal fees
- Limited education
- No ISA
- Withdrawal fee: $5
- Inactivity fee: $10 per month
- Currency conversion fee
- General Investment Account
- Demo Account
- Real Stocks
Freetrade – best for commission free trading
and best for beginners
Freetrade have one of the best sign up bonuses of all the brokerage platforms available with a free stock worth up to £200 for every new account that makes a deposit of as little as £1. This reward system is also bolstered by their refer a friend scheme that also awards free shares.
In addition to this Freetrade are also completely commission-free with access to thousands of UK and overseas stocks, EFTs and investment trusts as well as fractional shares. The platform is extremely user friendly and perfect for beginners who are just learning the ropes.
- Zero commission fee
- Free share for new accounts
- Very beginner-friendly interface
- $3 per month ISA fee
- Only provides access to US and UK shares
- Limited research available
|Cost per Trade:||£0|
|Annual Custody Fee:||£0|
|Investment Trusts Fee:||£0|
|ISA Fee:||£3 per month|
- General Investing Account
- Stocks and Shares ISA
- Freetrade Plus
- Stocks & shares
When you invest your capital is at risk, the value of your investments can go down as well as up and you may get back less than what you invest. *Other charges apply. Free share terms and conditions apply. The probability is weighted, so more expensive free shares will be rarer.
interactive investor – best for range of UK/US shares and one free trade per month
interactive investor is one of the most established platforms in the UK and enjoys an excellent reputation among traders. If you are looking for more than one account then this could end up being a cost-effective solution as the flat fee of £9.99 provides access to all the accounts on offer, and there are a few to choose from.
Frequent traders, in particular, will benefit from zero commission trading as well as one free trade per month.
In addition to this, the range of investment options is substantial with the option of trading funds as well as stocks and shares and interactive investor have excellent research and tools on offer.
- Wide range of financial instruments
- Excellent account options
- One free trade per month
- Free regular investing
- Expensive for small investment pots
|Cost per Trade:||£7.99 plus one free trade per month|
|Annual Custody Fee:||£9.99 per month|
|Investment Trusts Fee:||£7.99|
|Phone Dealing Fee:||£49.00|
|Platform Fee:||£9.99 per month|
- Stocks and Shares ISA
- Junior Cash ISA
- Junior Stocks and Share ISA
- Self Invested Personal Pension (SIPP)
- Company account
- Cash savings
- Stocks and Shares
- ETFs (Share ETFs and Index ETFs)
- Investment Trusts
- Investment Funds
- Bonds and Gilts
- Venture Capital Trusts
Leveraged Trading options include:
- Spread Betting
- Contracts for Difference (CFDs)
- Forex Trading
Capital at risk.
Hargreaves Lansdown – best for range of investments and education and research
Whilst their cost per trade may be at the top end of the scale, plenty of investors are happy to pay the price for the premium service they receive at Hargraves Lansdown.
Beginners will get plenty of assistance including investment suggestions and an excellent education section that is completely free.
Experienced investors are bound to be impressed with the sheer volume of UK and overseas shares, funds, ETF and investment trusts. The pricing structure is a little different here, favouring small investment pots as a percentage of the total invested, however, this is capped at £45 per annum on its ISA.
One of the major advantages of Hargreaves Lansdown is the ability to access professional investment advice from an actual human. Beginners and seasoned investors alike will benefit from this.
- Excellent range of investment options
- Great educational resources
- Access to professional investment advice
- Expensive for larger pots
- No demo account available
- High trading fees
|Cost per Trade:||£11.95|
|Annual Custody Fee:||0.45%|
|Investment Trusts Fee:||£11.95|
|Phone Dealing Fee:||£20 – £50|
- Stocks and Shares ISA
- Fund and Share Account
- Lifetime ISA
- Active Savings
- Junior Stocks and Shares ISA
- Junior SIPP
- Junior Investment Account
As with any investment the value can go down as well as up. Past performance is no indicator of future performance. The tax treatment of ISAs depends on your individual circumstances and may be subject to change in the future.
AJ Bell – best for range of international
shares and ease of use
AJ Bell have developed an interface that is a breeze to navigate and should you get into any difficulty their highly responsive customer service team are always on hand to assist.
Here you will discover shares from 24 exchanges from around the globe but traders should be aware of the exchange fee of up to 1% on foreign currencies.
Again, this isn’t the cheapest option available, however, investors who conduct more than 10 trades per month are rewarded with 50% off their trading fees and although their platform charge is depicted as a percentage of your total pot, this does have a relatively low cap.
- Quick and seamless account opening process
- Easy to use platform
- Excellent customer service
- Can work out expensive
- 1% exchange fee on overseas shares
|Cost per Trade:||£9.95|
|Annual Custody Fee:||0.25%|
|Investment Trusts Fee:||0.25%|
|Phone Dealing Fee:||£29.95|
- Stocks and Shares ISA
- Dealing Account
- Junior Stocks and Shares ISA
- Junior Dealing Account
- Junior SIPP
- Stocks and Shares
Capital at risk.
Fineco – Best for low cost and frequent traders
Fineco may not be commission-free, but they are still one of the lowest cost providers available with a share dealing price of only £2.95 per trade. This is an excellent option for frequent traders who want access to overseas stocks and a multicurrency account for trading in local currencies.
In terms of investment options, traders won’t be disappointed with the sheer volume of financial instruments on offer or indeed the excellent trading tools that complement them.
There is also a lot to like for inexperienced investors with a good range of fully managed portfolios and no minimum deposit.
- Low trading fees
- Multicurrency account
- Excellent trading tools
- No Self Invested Personal Pension account
- Deposit methods are limited
- Slow account verification
|Cost per Trade:||£2.95|
|Annual Custody Fee:||0.25% MAX|
|Investment Trusts Fee:||NA|
|Phone Dealing Fee:||NA|
- Stocks and Shares ISA
- Share Dealing Account
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.11% of retail investor accounts lose money due to CFD trading with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
How to choose the best online broker
There are several things to consider and the best stock broker for you will largely depend on your personal circumstances. However, these are the main points to bear in mind when you compare share dealing accounts.
Fees can start to erode any investment gains quickly and therefore it is important that you take this into consideration. The fee structure that suits you best will depend on how frequently you plan to trade and the size of your investment pot. Small pots can benefit from a percentage fee, whereby big pots are often best served by a flat fee. Some platforms will reward bigger pots with a reduced fee.
Ensure you fully understand the fee structure for the platform you are considering and take the time to work out what you are likely to be paying. I have gone into this in more detail below.
What sort of trading account you use to conduct your trades will depend on your tax status. Any gains made on the trades you make, over and above the personal allowance, will be subject to Capital Gains Tax.
The personal allowance currently stands at £12,500 for basic rate taxpayers. Should you be exceeding this then you would be best served by trading from an ISA where your profits are protected from the taxman and you won’t have to pay Capital Gains Tax.
Most of these providers will provide access to UK shares listed on the London Stock Exchange however, should you wish to access stocks from abroad then you should ensure these are available and whether you can trade from a multicurrency account or whether you need to be concerned with exchange rates and conversion fees.
The number and quality of stocks can vary wildly from one broker to another so it is prudent to ensure your needs will be met in this regard.
Platform and user-ability
It is important that the platform and interface are suited to your style of stock trading. Beginners will be better served with a simple platform that is easy to navigate, whereas experienced traders will benefit from a more complex interface along with charts and tools to aid their decisions and research.
Understanding the broker’s fees
There are a number of fees to be aware of when share dealing and it’s important you understand all the charges your chosen broker is levying in order to avoid any nasty surprises.
These are the fees for the use of the platform from where you will be dealing your shares. They can be charged annually, monthly or quarterly and can either be a fixed sum (better for large investment pots) or charged as a percentage of your total investment amount (better for small investment pots).
Some brokers will have a sliding scale whereby the annual platform fee is reduced as the size of your pot grows.
Trading fees or share dealing fees are levied every time retail investor accounts buy or sell shares. Again, this can either be in the form of a percentage of the total value or as a flat fee. There are share dealing platforms (included in my recommendations) that waive this fee completely by offering commission-free trading. These are the ideal choice for very frequent traders. This fee can also be referred to as the dealing charge.
These need only be of concern if you intend to buy funds as well as shares. The fund charge covers the cost of managing the fund and can vary from fund to fund.
Overseas dealing charges
Overseas dealing charges are applicable when buying and selling shares that are from an exchange outside of the UK. They can include a currency conversion or FX fee which is usually calculated as a percentage of your trade value, or in some cases, this could be a flat fee.
A share represents an ownership stake, usually in publicly listed companies and share dealing can be a decent way to add value to your portfolio with the intention that you buy a share at one price and sell when the value of that share has gone up in price.
Of course, there is an element of risk when dealing shares and there are no guarantees that the value of your shares will go up in price. In fact, you could end up losing some or all of your money. The secret to mitigating this risk is to diversify your portfolio. For more information please read my article How to Create A Diversified Portfolio.
That being said, share dealing, or investing, can help to protect your money from the value shrinking effects of rising inflation. Historically, returns made from the stock market have outpaced the rate of inflation.
Whilst both of these entities have the same intention, to make your money grow, there are fundamental differences between the two styles. Typically investing refers to a long term approach, whereby you intend to buy, and hold your assets over a long period of time with the intention that the asset will slowly grow in value.
Conversely, dealing, or trading refers to the art of buying and selling assets at high volume over much shorter periods of time that could be daily, weekly, or monthly. This practice of taking advantage of fluctuations in the market is intended to reap smaller, more frequent profits.
A share dealing broker is a trading platform that facilitates the buying and selling of shares. There is no way to buy shares directly from the Stock Market which is why a broker is required.
These days, more and more brokers are becoming fully digital, offering an online trading platform from where you can access your trading account, buy and sell shares, and research the market all from a computer or mobile phone any time of the day or night.
Starting out can feel daunting and with so many options it’s difficult to know where to begin. However, there are some steps that you can take to ensure you get off on the right foot once you have opened your chosen share dealing account.
- Clearly define your investment goals
Defining your goals is important as it can identify the type of investment you should be looking to make. One of the most important aspects is your time frame. Long term investments can assume more risk than short term investments as time can help ride out any volatility in the stock market (just look at what has happened as a result of the war in Ukraine).
- Look to diversify your portfolio
Diversification is the key to mitigating your risk. Look to include stocks from a range of regions, sectors and company types. This can help ensure that any losses sustained in one area, can be offset by gains in another area. This can help to steady the overall value of your investment portfolio.
- Consider investing little and often
Drip feeding your investment money into the stock market can also help to mitigate your risk by ‘pound cost averaging’. This means that you could benefit from the highs and lows of the market, obtaining an average price over time, rather than investing a lump sum at one price.
If I knew the answer to this, I would be happily sipping a cocktail on a beach in the Maldives by now. However, some research into the factors affecting a company’s stock price can yield favourable results. These include:
Valuation of the company
By taking the projected earnings and discounting them back to the present day, you can value a company. Savvy investors will apply a ‘discount rate’ to factor in the risks involved in order to adjust those earnings. Interest rates are a major factor affecting the discount rate, with lower interest rates decreasing the discount rate, and in turn, increasing the valuation. This is why in 2022 higher interest rates have increased the discount rates, resulting in valuations falling.
When applied to high growth stocks, such as tech stocks, this helps explain why their valuations can increase so substantially. High growth stocks will reinvest heavily, reducing profits whilst securing future growth.
Any changes in the earnings of a company will be reflected in its stock price. This includes changes in current earnings, as well as changes in future earnings.
There are several elements that can affect a company’s earnings. Economic growth, inflation, interest rates, level of debt, cost structure, scope for increasing product prices and factors that affect demand.
This is important to take into consideration as it will affect whether you are investing for profit, or investing for growth.
Companies will either reinvest any profit back into the organisation or, pay it to shareholders in the form of dividends. You can check a company’s dividend yield which will show you how much the company in question pays out in relation to its stock price.
A share in companies that pay dividends can be an excellent way of beating inflation. Simply ensure that the percentage of dividend yield is higher than the current annual percentage of inflation.
Also consider: Best stocks paying dividends for 2022
Can you trust online brokers?
Online brokers offer a much more cost-effective solution than traditional brick and mortar brokers who would take a large percentage of any gains made and therefore eat away at investment profits. However, can you really trust these establishments with your money?
The answer to this is yes. There is strict regulation in the UK by the Financial Conduct Authority which ensures your funds are protected from unscrupulous establishments. Not only can you trust online brokers, but there are many other reasons why they make an excellent choice for anyone looking to deal shares including
Deal shares on the go – online brokers have made share dealing fully mobile, providing access to your account at any time, from anywhere.
Get started for less – some of these online brokers have zero account minimums, meaning you can start share dealing with as little as £1, although my advice would be to check the fee structure when dealing with very small amounts as this can end up eating away at all your gains.
The multitude of tools and features – the number and quality of features and tools will vary between providers, however, most will have a basic suite of tools to aid your investment decisions.
Research and news – again the breadth and quality of research provided will vary between providers, however, most will have access to research and news.
Demo accounts – for anyone just starting out on their investment journey, demo accounts offer the opportunity to trade stocks without risking any of your funds. This is done using virtual money.
This will largely depend on how much you intend to trade and the sort of stocks you are interested in trading. However, my top two recommendations for beginners would be Freetrade who provide a beginner-friendly platform as well as commission-free trading and a free share when you sign up and deposit, and eToro who also have commission-free trading, a demo account so you can practice your skills, and a thriving copy trading community.
This will very much depend on the value of a single share, and whether fractional shares are available. How many shares you buy should reflect your total pot size and your attitude to risk. However, it is important to remember to stay diversified in order to mitigate your exposure to risk. Diversification should include shares across many different sectors and regions.
What is considered risky when trading?
When it comes to risk, there are ways to avoid exposing yourself over and beyond your level of comfort. Cryptocurrencies, penny stocks, CFD trading, forex trading, day trading and spread betting are all considered risky options and should be avoided when just starting out.
It is also important when buying and selling shares that you do your research in the companies you are considering investing in. It may be an option to start out with companies who you are already familiar with.
However, the best way to reduce your risk and ensure you are remaining truly diversified is to consider investing in exchange-traded funds or mutual funds rather than individual stocks.
What is an Exchange Traded Fund?
An exchange-traded fund (ETF) is a pooled fund that typically tracks a particular index, sector, commodity or other asset. EFTs can be bought and sold on a stock exchange in much the same way that an individual stock can. They offer a way to instantly diversify your investment portfolio.
I have always advised that investing should be a long term endeavour of a minimum of five years. The idea behind share trading is that you aim to buy the shares at their lowest price and sell them at their highest price. However, this is almost impossible to time and rarely works out, especially for novice investors.
The most important thing to remember when considering selling shares is that any losses are only locked in once you sell your shares. Therefore avoid selling when the market is down. This is why I suggest giving yourself plenty of time in the market in order to ride out any volatility that may occur.
It’s important to consider whether the particular company in question will continue to grow or whether you should cash out at its current value. Try not to make any emotional decisions. Remember, you always have the option to seek independent advice if you are uncertain about how to proceed.
Will I need to pay tax on my shares?
There is Capital Gains tax levied on any gains made over and above the personal allowance however, you will not have to pay this if your investments are held within an Individual Savings Account (ISA). Check the provider you are considering offers an ISA and ensure you are familiar with any additional charges that the ISA incurs.
Do I need a financial adviser to deal shares?
Whether or not you require the services of a financial adviser depends largely on how complex your finances are. However, these online brokers have made it possible for retail investors to buy and sell shares on stock markets without independent financial advice.