Updated: 9th July, 2019
> Home > The Best Online Share Dealing Accounts of 2019
Over the long term, it’s hard to find a better way to grow your money than investing in shares. And thanks to many online share dealing brokers in the UK, getting your portfolio up and running is simple, and often cheap.
Our top share-dealing account picks at a glance:
Hargreaves Lansdown
Good for: Long-term investing in shares
Our Bottom Line
Hargreaves Lansdown is the UK’s market leading share dealing broker, providing easy access to an extensive range of funds, ETFS, UK and overseas shares. HL offers a robust service with an easy-to-use website and plenty of free information to help make your investment decisions. In our view, the ‘Fund and Share’ account is great choice for long-term share investors looking to manage their portfolio online.
Full Hargreaves Lansdown review
Share dealing fee:
£11.95
Monthly account fee:
£0.00
The value of your investments can go down as well as up and you may not get back all the money you put in. All investments carry a varying degree of risk and it’s important you understand the nature of these risks.
Interactive Investor
Good for: Long-term investors, fund-focused investors
Our Bottom Line
Interactive Investor is one of the leaders in online share dealing, and a good choice for long-term investors. Its platform gets high marks from investors for how easy it is to use and it’s well-liked for its flat-fee pricing. As of 1. June 2019, Interactive Investor customers get a choice of three subscription models that offer different levels of monthly fee in exchange for dealing fees that go as low as £3.99. It takes some thought to choose the right plan, but it may be time well spent, as Interactive Investor’s model can save some investors a good chunk of cash.
Full Interactive Investor review
Share dealing fee:
£7.99*
Monthly account fee:
£9.99*
The value of your investments can go down as well as up and you may not get back all the money you put in. All investments carry a varying degree of risk and it’s important you understand the nature of these risks.
*Reflects the ‘Investor’ pricing plan. Fees for other plans differ. See our full review for more information.
FinecoBank
Good for: Low-cost deals for active traders
Our Bottom Line
FinecoBank is a new kid on the block in the UK and they’re making a splash. The service is highly competitive on share-dealing price (£6.95 for lower-volume traders) and offers particularly attractive rates for investors buying shares outside of the UK. In this multi-currency account you can also trade directly in many local currencies. Better still, there’s no platform fee. Most investors won’t need 100 free trades over the first three months of their new account, so the current offer essentially means free trading for three months!
Share dealing fee:
£6.95
Monthly account fee:
£0.00
The value of your investments can go down as well as up and you may not get back all the money you put in. All investments carry a varying degree of risk and it’s important you understand the nature of these risks.
Halifax
Good for: Fund-focused, long-term investors
Our Bottom Line
If you are a frequent trader, the higher share-dealing fee at Halifax could be a bit painful. But for long-term focused investors that don’t trade very often, the lack of an annual account fee or custody fee on funds can be a nice benefit.
Full Halifax review coming soon!
Share dealing fee:
£12.50
Monthly account fee:
£0.00
The value of your investments can go down as well as up and you may not get back all the money you put in. All investments carry a varying degree of risk and it’s important you understand the nature of these risks.
The Share Centre
Good for: Active investors, investing overseas
Our Bottom Line
The Share Centre strikes a nice balance between providing a feature-rich platform and still offering competitive trading fees for investors that trade regularly and pay for the ‘frequent dealing option’. It may be especially attractive for investors interested in overseas shares, as there are no extra fees for trading non-UK shares. Due to the fee structure, this account may not be a great fit for investors that trade very infrequently.
Full The Share Centre review coming soon!
Share dealing fee*:
£7.50
Monthly account fee**:
£10
The value of your investments can go down as well as up and you may not get back all the money you put in. All investments carry a varying degree of risk and it’s important you understand the nature of these risks.
*Reflects frequent dealing option. **Reflects mandatory £2 monthly platform fee and optional £24 per quarter frequent dealing option.
DEGIRO
Good for: Extreme low-cost trading
Our Bottom Line
Yes, the share dealing cost really is rock bottom with DEGIRO. You don’t get the user-friendly, robust service with fundamental research that you do with others like Hargreaves and Fineco, but if you’re looking for low, low trading costs, DEGIRO could be a match.
Full DEGIRO review coming soon!
Share dealing fee:
£2.19
Monthly account fee:
£0.37
The value of your investments can go down as well as up and you may not get back all the money you put in. All investments carry a varying degree of risk and it’s important you understand the nature of these risks.
What is a share dealing broker?
Here’s what we know for starters: You can’t find shares sitting on the shelves at Tesco. And even though Amazon seems to have nearly everything, you can’t log onto Amazon’s site and find company shares. And that’s where share dealing brokers come in.
In the past, we could say that brokers were the actual people that facilitated the buying and selling of shares (more on that in a moment). Today, it’s as often referring to a platform on which shares are bought and sold. But we don’t need to get too caught up in the details. In short, when we talk about brokers, we’re talking about the companies and people that facilitate the buying and selling of shares. Simple as that.
As mentioned, in the past, a broker might actually be a person that you’d go to — or call on the phone — for help buying or selling shares in a company. You’d say, for instance, “I’d like to buy 1,000 shares of Walt’s Wheat Ltd for less than £5 per share” and the broker would hit the phones to try to find somebody else willing to sell you those 100 shares at the price you’re hoping for. And that broker would almost always charge you a very generous commission for those services.
Today, you can still find these “full-service brokers”. Though maybe not as comparably expensive as in the past, they’re still quite expensive. And they’re probably not terribly interested in working with you unless your account has seven digits or more.
One of the biggest changes to this picture in our lifetimes was the rise of online share dealing brokers. These are websites focused on enabling you to trade the shares you want, quickly, easily and at a much lower cost than the full-service brokers. This was a massive change in the industry, because the commissions that online brokers charge make it much more attractive for investors of all wealth levels to invest in shares. These days, most brokers charge £12 or less for a standard share trade. And while the full-service brokers look for massive account sizes, account minimums at online brokers are typically very low, if there’s a minimum at all.
This landscape continues to change though. As online share dealing brokers continue to grow, they’re offering more and more services that you’d previously only expect to find at a full-service broker. So depending on how much assistance you need placing trades or researching shares, you can find online brokers that offer a higher level of support.
What makes an online share dealing broker the “best”?
The word “best” is tricky here. After all, every investor is in a slightly different situation, and for that reason will need something a bit different from their broker. While one may want a dead-simple interface and lots of fund choices, another may be a veteran share trader and just want the lowest commission rate possible.
So as we compiled and rated our list of top brokers, we kept this in mind, and aimed to highlight top share dealing brokers that could be a good choice for a wide variety of investors. That said, read carefully through our top picks with your own situation in mind, so that you can match yourself to the broker most likely to meet your needs.
In coming up with our ratings, here are a few factors that were particularly important:
- Commissions and fees — All else equal, why wouldn’t you want the broker with the lowest commission rate? Our bias is towards highlighting the brokers that keep your trading costs down, because that means more money stays — and hopefully grows! — in your account. At this point, it should be pretty easy to find a high-quality broker with an easy-to-use platform that charges less than £12 to £15 per trade. We also gave a bonus to brokers that charge little or nothing as an ongoing platform fee for keeping your account open.
- Variety of investments and geographies — For investors that want to keep it simple and focus on low-cost funds, this may be less important. But for those investors that are aiming for higher returns and want to dig up the best opportunities, having a broker that offers broad access to investments domestically as well as internationally, is important.
- Minimum account levels — Both MyWalletHero and our parent company The Motley Fool believe strongly in investing’s potential to create wealth. And we don’t want that to be limited to those that are already wealthy! Brokers that keep account minimums low allow individuals earlier in their lives a chance at investing in shares.
- The platform and features — Online broker platforms can range from being extremely simple all the way to looking more confusing than the control panel of an Airbus jet. There’s also a range of features that brokers offer, with some keeping the platform very bare bones, while others offer an impressive array of research and screeners. The needs of individual investors will vary here, but we aim to steer investors clear of platforms that are confusing and difficult to use.
Why choose an online broker
The answer here may seem simple: cost. For many investors, the cost of a full-service broker eats up most, all or even more-than-all of their investment gains. It simply doesn’t make sense. So the low fees of an online share dealing broker make much more sense for investors without massive portfolios. Which, of course, isn’t to say that investors with massive portfolios shouldn’t use online brokers — after all, doesn’t everyone love saving money?
But the appeal of online brokers goes beyond the fact that the fees are much more attractive. Here are a few additional reasons that we like online brokers:
- Ease of use — Fancy making share trades in your pyjamas? With an online broker you can do exactly that. There’s no need to leave your house, no need to even pick up the phone. With an online broker, you can simply turn on your computer — or, in many cases, your mobile — and you can quickly be investing.
- Research — Not all online brokers offer research as part of their platform, but many do. And while it’s important to come to your own conclusions about your investments, getting additional insight from quality research can be helpful in the process
- Screeners and other tools — Like the research, it varies from broker to broker whether you’ll have access to screeners and other investing tools. However, many online brokers, even those with the lowest commissions, do have tools that you can use to quickly narrow down the daunting number of companies to an easier list to research.
- Low account minimums — It’s not uncommon to find online brokers now that have no account minimum. And those that do tend to have low minimums. That means that you can start investing earlier in your financial life. And at least in the past, the earlier you started investing, the better off you were.
How to pick an online broker
There’s no one-size-fits-all here, so when choosing an online broker, it’s important to consider your needs and not get hung up with an outside view of which broker is the “best” (yes, even if that’s our “best”!).
To do this, you’ll want to consider what is most important to you in your broker. The top online brokers have compelling offerings, but these offerings vary slightly and will advantage certain investors. To make the best choice, it may help to consider what kind of investor you are, since that can help match you up with one broker or another.
Here are a few examples of investor types and what type of broker that might match well with:
- Brand new to investing — These investors will probably want a balanced offering. Paying sky high commissions won’t work, since you likely don’t have a very big portfolio. But the stripped-down platforms that you find with most ultra-low-cost brokers may prove bewildering to a new investor. A bigger name online broker with a balanced offering will also likely offer tools and research that can help a new investor start off on the right foot.
- Steady fund-focused investor — This type of investor will want to look for an online broker that offers a broad selection of funds, and/or a good selection of low-fee funds. If you’re this kind of investor, you’ll also want to aim to steer clear of fund custody fees and inactivity fees.
- Hardcore investing veteran — As someone with many years of experience, this kind of investor can typically leave aside extra research and a pretty interface in favor of dirt-cheap commissions. They still may want some screeners and other tools to help in their search for the very best shares, but even the lowest-rate online brokers tend to have some tools for their customers.
Of course this doesn’t cover all of the possible types of investors. And even among these three types there may be crossovers. For instance, a hardcore investing veteran may be willing to pay a bit more in commission in order to have access to research. And perhaps there’s a brand new investor that’s not scared off by a spartan investing interface. But the bottom line is to understand what your needs are as an investor, and look for those features in your online broker.
How to buy shares online
Deciding which company’s shares to invest in is beyond the scope of this page (though you can find help with that at Motley Fool UK). Once you’ve figured out which shares you want to buy though, the rest is pretty easy.
Each publicly listed company has a “ticker symbol” — a short combination of letters — that lets you call up those shares quickly. Marks & Spencer Group has the ticker symbol “MKS”, while GlaxoSmithKline is “GSK” and Sainsbury’s is “SBRY”. Of course, you may not know the ticker symbol for the shares you want to purchase, and that’s ok, since most online brokers also have a ticker-symbol lookup tool that allows you to find a ticker based on the company’s name.
Once you’ve landed on the trading page for the shares you want to trade, you’ll need to decide what type of order you want to place. The two most popular order types are “market” and “limit” orders. A market order tells your broker that you want to buy X number of shares of that company at the best price the market offers when the trade goes through. By contrast, a limit order specifies a price for the shares, so you might specify buying X number of shares at or below 450p per share.
Is one type of trade better than the other? Not really, but a limit order is generally safer than a market order. That’s because you’re assured that your broker won’t buy the shares if the price spikes above the price that you’re comfortable with. The main “risk” with a limit order is that the price does go above your limit and you don’t get the shares. In that case, you have the chance to reconsider and, if you feel comfortable with a higher price, you can put in a new limit order with a higher limit price.
Where this becomes particularly important is when trading shares of a company that has low trading volume. The reason is that this type of share can exhibit very large price swings. If you’re trading shares of GlaxoSmithKline, there are so many shares trading that it’s very unusual that the price will move more than a few percentage points per day. With smaller, less-traded shares, prices can easily move 5% or 10% in a single day, and if you place a market order at the wrong time, you might be sorely disappointed at the price you end up with. So with small, less-traded shares, limit orders are particularly smart.
Once your order is placed, you’ll be alerted by your broker when that order has been “filled” and the shares will appear in your portfolio. For a highly-traded share that you buy with a market order, completing the trade could happen in a fraction of a second. While a limit order on a thinly-traded share could take hours to complete, if your broker is able to fill the trade at all.
And that’s it! While becoming a good investor takes patience, study and practice, buying the shares isn’t terribly complicated at all.
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