Choosing an investment platform

Once you have decided on a plan and an investment strategy, you next need to consider what platform you will invest through.

Platforms are your interface to the markets and allow you to buy and sell assets in your portfolio. It’s important to distinguish between the role of the platform versus the role of the fund.

The role of the platform is to allow you choose investment methods (trading, ISA or SIPP), execute buy and sell orders, transfer and receive money relating to those order, give you an up to date portfolio valuation, provide tax certificates and handle any administrative queries you have. They will charge a fee for this which I expand on below.

The role of the platform is not to tell you what to buy and sell! That’s what “execution only” means. If you need advice on what to buy, you should seek assistance from a regulated financial advisor.

The role of the fund is to invest your capital in line with the strategy outlined in the documentation provided at point of investment. They also charge fees which are a combination of an initial upfront % and an ongoing annual %. Again, these fees will be in the fund documentation. You don’t interact with the fund provider directly, you do this through your platform.

Sometimes the same company do both roles. For example, you could choose a Legal & General fund through the L&G website.

Other companies do the platform role only. They usually, but not always, have a wider selection of funds to choose from.

It should go without saying, but in the UK, you should only ever select a platform that is regulated by the Financial Conduct Authority. If you are investing in other jurisdictions, check what their regulations are first.

Platform fees

Apps that tout themselves as ‘fee free’ are actually just burying their fee in a non-transparent way (usually in complex topics like payment order flow). My preference is to avoid these, simply because if I don’t understand how they make money, I don’t want my money anywhere near their bank account.

Fee based platforms charge in one of three basic ways:

  • fixed monthly or annual fee, regardless of fund size
  • An annual percentage based on portfolio size
  • A capped combination which starts as % until a ceiling is reached for the fee in a year.

I use fixed fee platform accounts only, rather than % of fund value.  My preferred choice is Interactive Investor which is the leader in fixed fee investing. 

I pay fees by direct debit monthly, about £40 a month in 2024 for six accounts (ISA, SIPP and trading for two people). 

Paying the fee by direct debit means they are not selling your units to cover fees.  But if course, depending on you total fund size, this can be quite expensive at first.

The exact cut off will vary, but certainly you probably need to be in six digits before fixed fee platforms become cost effective compared to other market options. 

Depending on how quickly you think you can build up funds, you may still want to do this and accept the high fee as a “loss leader” in the early days just to be on the right long term platform from the start. 

Interactive Investor is a general trading platforms so you can pretty much buy anything.

So, as ever, the choice is entirely based on your preferences.  It’s a very tricky subject, not least because there are so many in the market.  But a good understanding of the broad principles will help you navigate.

Read more on this topic . . .


I am not your financial adviser.

The information in this post relates to my financial journey. It may or may not be relevant to your own. You need to make your own decisions on your own financial strategy.

Do not buy or sell anything based solely on what you read.