With interest rates near record lows, investing in equity instruments remains the best bet for long-term investors looking to consistently beat inflation rates. It has never been easier than today to start trading in stocks given the rise of discount brokers over the past decade.
Alternatively, there are plenty of stockbrokers to choose from and it is essential that you choose the right one before taking the plunge into stocks. If you are an experienced trader or investor, it doesn’t hurt to keep an eye out for brokers who can provide better services and/or are cheaper.
It helps to read user reviews of brokers before you make a decision, and review platforms like Investimonials are a great source to track actual user experiences before choosing a broker. It allows users to write their own experiences giving readers first-hand information that will help them make a decision.
Here we have shortlisted five of the best brokers in the UK that stock market investors can consider for 2021.
eToro
eToro is an Israel-based fintech and social trading broking platform that is part of most top broker lists in the UK. eToro has an interface that is easy to understand and is a popular choice for newbies as well as experienced traders. Further, its UK unit is regulated by the Financial Conduct Authority (FCA).
The broker offers commission-free stock trading which means you don’t have to pay fees to trade stocks and ETFs. Opening an account on eToro is fast and painless. Its innovative copy-trading feature lets you shadow other users’ trading strategies and benefit from their expertise. You can invest in shares across the world through eToro including the London Stock Exchange and the New York Stock Exchange. A minimum deposit of £200 is required to start trading on eToro.
Interactive Brokers
Interactive Brokers is great for experienced traders who trade multiple times a year. Its Trader Workstation (TWS) platform may seem complicated but provides users with trading tools that include: Mutual Funds Scanner, Bonds Scanner, Options Strategy Lab, Volatility Lab, Risk Navigator, Market Scanner, and Strategy Builder to name a few.
Further, users can customize these tools as per their needs. The TWS Charting tool is especially commendable as it has 137 technical indicators and 9 drawing tools. Interactive Brokers has an inactivity charge of $20 a month. So make sure you choose this broker only if you are a serious trader.
Fineco
Fineco is one of the cheapest trading options for UK residents. It has a free web platform, a mobile app, and a downloadable PowerDesk desktop platform. PowerDesk is ideal for regular traders and the charting features on it are very well-received. The platform offers around 90 technical indicators with customization features and over 30 years of data.
Its screeners can do a basic filter of stocks, ETFs, mutual funds, and CFDs based on fundamental and technical data. UK users can trade on 26 global markets using this platform, and Fineco has just started accepting applications for its early access ISA accounts which will be rolled out to all users by the end of 2021.
DEGIRO
DEGIRO is one of the most basic brokers out there. It is cheap and offers no research services beyond your basic company information. Its charting platform is basic too, and this is for users who know exactly what they want. Each trade will cost you £1.75 + 0.014%, with a maximum cost of £5.
Trading in US equities will push you back by €0.5 + $0.004 per share, and European trades will cost anywhere between €2 + 0.118% to €10 + 0.0168%. Market data on this broker is delayed and users who want real-time data will have to pay between €2.50 – €10 per month for each individual exchange. Clearly, DEGIRO is not for active traders but for long-term investors.
IG
IG is one of the finest stock brokers for UK citizens. It has a solid mobile app and its charting capabilities are probably the best in the UK. Its commissions vary from £3 – £8 per trade for all securities including stocks, ETFs, and mutual funds. Its web platform and mobile app have 19 drawing tools and 30 technical indicators. IG’s charts let you trade directly from them which is one glimpse of why this is an awesome broker.
Its research functions are also top-notch but the one that is a great plus is the IG community where users can interact with like-minded serious traders to discuss different securities and make decisions. Its market screener has 34 fundamental metrics to enable decision-making.
The final takeaway
Before you open a brokerage account, you need to have a clear idea of what you want to do in the stock markets. If you trade regularly you would want a broker with low fees and commissions as well as interactive charting tools. Alternatively, a passive investor can look at brokers that have limited services but an easy-to-use interface.
Additionally, not all brokers offer ISA (Individual Savings Account) and SIPP (Self-Invested Personal Pension) accounts. If these registered accounts are important to you, ensure that you choose a broker that provides you with required services.