Best investment trading apps UK In June 2023
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A few years ago, the notion of using a smartphone to buy stocks, funds, and other investments – essentially having access to a dealing room in your pocket – would have seemed way beyond the experience of a typical DIY investor.
Today’s technology however, makes it possible to run pretty much all investments from a mobile device. In fact, trading ‘on the go’ is all many younger investors know.
Whether you’re a rookie trader or a market veteran, here’s our pick of the best investment apps in what’s becoming an increasingly crowded and competitive marketplace.
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Best UK investment trading apps
* We calculated the fees by platform based on the following assumptions:
- Frequency of trading: once a month, totalling 12 trades (purchases or sales) over a year
- Type of shares: trading fees are often lower for funds, but not all of the platforms offer the option of buying them. So we based our calculations on trading in UK shares
- Foreign exchange fees: for any accounts not able to be held in pounds sterling, we calculated the foreign currency exchange fee based on the total value of the portfolio
- Platform fees: we assumed that the portfolio was invested wholly in shares
- Value of portfolio: we calculated the fees based on a total portfolio of £10,000.
What are investment apps?
Investment apps are essentially a tool on which you can buy and sell shares, and manage your investment portfolio, from a mobile device.
While stockbroking and fund management firms have provided online investment platforms since the early days of the internet, in the past few years there’s been a shift from desktop to mobile trading. It’s thanks to the evolution of increasingly powerful smartphone and the rise in the number of share trading apps.
According to analysts App Radar, there were an estimated 3.1 million Android downloads of the top 10 UK investment apps alone via the Google Play Store between 2020 and 2021.
App Radar doesn’t record iOS figures, which account for users downloading apps to Apple devices. But it says the split between Android and iOS downloads is about 50/50. With this in mind, App Radar estimates that, overall, there are now around nine million people using trading apps in the UK.
Rise of the ‘neo broker’
Some of the newest trading services – offered by so-called ‘neo-brokers’ – enable investors to buy and sell shares, funds and other, more complicated financial instruments (such as contracts for difference), but are only available via a mobile app.
To keep pace, providers of traditional, desktop-based investment platforms have also developed trading apps for customers to use.
For example, the largest UK platform, Hargreaves Lansdown, says its app had nearly 700,000 users at the end of 2021. It adds that more than a quarter of a million users tap into its app daily.
Not to be outdone, one of its rivals, AJ Bell, launched a service last year called Dodl. This app is aimed at younger customers looking to buy a limited range of investments. One of its key features is that it allows investors to buy shares ‘commission-free’ (see below for more information on the typical charges applied by app providers).
Earlier this year, Bestinvest unveiled a free mobile app to accompany its investment platform that was revamped in 2022.
Virgin Money has also entered the burgeoning DIY market for investing platforms and trading apps, with a digital service that offers customers a pared-down range of investment options based on three risk profiles.
Are investment apps worth it?
Investment apps offer a convenient way of managing an investment portfolio in real-time, and placing trades from a mobile device.
Most of the main trading platforms offer app-based trading, as well as trading online. However, the functionality of investment apps can vary by provider. Some apps offer in-depth information on both individual investments and the wider market, while others are more limited.
While apps allow investors to make timely investment decisions, it’s also worth bearing in mind the risk of ‘over trading’ or making knee-jerk decisions when trading ‘on the move’.
Which app should I pick?
Keeping to a minimum the amount that you pay to trade and invest will ultimately end up boosting the returns made by your underlying investments. But it’s worth remembering that charges should not be an investment app user’s sole focus.
As with so many decisions to do with our finances, when choosing a trading app there’s no stand-out provider that will suit everyone. The decision essentially boils down to what you, personally, are looking for from a service.
Apart from charges, there are a number of other considerations you need to bear in mind to get the most out of your app experience. These include:
- How user-friendly is the app for your needs?
- Does an app include the investments you want to trade? For example, shares, funds, or more sophisticated instruments.
- Does an app allow brand new investors to practise trading virtually, before they take the plunge for real?
- Apart from trading costs, what other admin fees does the app impose?
- Is there a minimum investment?
- Can you use the app to trade tax-efficiently, for example, through a stocks and shares ISA?
- Is your app regulated? By the UK’s Financial Conduct Authority (FCA), for example.
- Does your app include any extra benefits/rewards/signing-on incentives?
- Are there any catches or restrictions with rewards/incentives?
Trading costs
The investment space is a patchwork of variable fees and charges from one provider to another. For investors – whether app-based or desktop-based – that can make it tricky to work out what it actually costs to gain exposure to the stock market.
When it comes to buying and selling shares, some providers impose a flat fee per trade. Others make their charges more attractive to traders who play the markets more frequently.
Users may also find themselves billed according to the size of their investment. Accounts provided by longer-standing platform providers often come with a monthly subscription or admin fee.
When buying overseas shares – you might decide on gaining exposure to US tech stocks priced in dollars, for example – bear in mind you’ll probably be charged with a currency fee for doing so.
Meanwhile, if you’re an infrequent trader, beware. If you take a year between trades, your account might end up being hit with so-called ‘inactivity’ charges.
Commission and charges
Several app providers promote their ‘commission-free’ trading status. It’s a welcome and increasingly popular option across the investing space.
But bear in mind that, just because trades are free from commissions, it doesn’t necessarily follow that your account will be totally devoid of charges. Brokers make their money in other ways, such as withdrawal fees and charges for currency conversion.
Before signing up to a particular investing app, work out what sort of investor you plan to be. Having an idea of how much you’re going to invest, how often you plan to trade, and which markets will be your primary focus, can help determine the best and most cost-effective app for your needs.
If sheltering your investments from tax is a primary concern, make sure your provider has the scope to offer a stocks and shares ISA – essentially a wrapper that allows an annual allowance of £20,000 of shares and funds to grow tax-free.
Trading behaviour
Key attractions of investing via an app are both the ability to trade quickly and, assuming you’ve chosen the right provider, at little or no cost.
On balance, this sounds like a powerful combination with scope for enhanced investment returns on your portfolio. However, research from a team of German academics confirmsed that it’s still important to tread warily, even when you’ve got the investing power of a small dealing room sitting in the palm of your hand.
In fact, ‘Smart (Phone) Investing? A within Investor-Time Analysis of New Technologies and Trading Behaviour, a paper from Frankfurt’s Leibniz Institute, suggested that a move to app-based trading can do investors more financial harm than good if they’re not careful.
The researchers tracked the transaction of 15,000 customers of two large German retail banks over several years. They discovered that when people placed trades via a mobile app, they were 8% more likely to buy “riskier lottery-type stocks” than when they bought via a computer.
Deals placed via apps were also 12% more likely to be for “past winner” stocks, in other words, those that had enjoyed a recent surge. The researchers concluded that “our findings caution against the indiscriminate use of smartphones as the key technology to increase access to the financial markets”.
Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.
This content has been independently collected by the Evening Standard team and is offered on a non-advised basis. This content is not part of a comparison service provided by our partners. Evening Standard may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations.