If you’re planning to get started in the world of investing, one of the first things you’ll need to do is choose an investment platform. And this isn’t particularly easy – today UK investors have a lot of options when it comes to investment platforms.
Here, we are going to highlight three investment platforms that we believe are well suited to beginner investors. Let’s dive in.
What does a beginner investor need?
Before we highlight a few of the best platforms for those getting starting out, it’s worth looking at what a beginner investor typically needs. There are several features that beginners should look for when selecting a platform.
One is ease of use. The platform should be really easy to navigate, even for someone with no prior investing experience.
Another is educational resources. Ideally, the platform should offer plenty of content designed to help newbies learn about investing.
Obviously, low fees are important. Typically, beginner investors are only investing small amounts of money, so fees need to be minimised.
Access to tax-efficient investment accounts such as Stocks and Shares ISAs and Lifetime ISAs is also paramount. This is often overlooked by beginners, but it’s really important as with these kinds of accounts, you can invest tax-free.
Of course, regulation is important. It’s crucial that the platform is regulated by a major financial watchdog such as the Financial Conduct Authority (FCA).
Other key features that can be valuable for beginner investors include ready-made portfolios, fractional shares, and a mobile app.
Nutmeg is great for ready-made portfolios
One platform that fits the bill here is Nutmeg. It’s a digital wealth manager (or ‘robo-advisor’) that has more than 200,000 customers today (you can find our full review here).
Nutmeg specialises in ready-made portfolios. So, you don’t have to worry about picking stocks yourself (which can be handy if you’re a beginner).
And these ready-made portfolios can be held inside a range of different accounts including a Stocks and Shares ISA. So, it’s possible to invest tax-efficiently.
The downside to this platform is that you can’t buy individual stocks (e.g. Tesla, Lloyds, BP, etc.). Fees, while very reasonable (0.68% per year for a basic ready-made portfolio), are also not the lowest out there.
Overall though, it’s a solid investment platform. It’s worth noting that Nutmeg won the Good Money Guide award for ‘Best Robo-Advisor’ in 2023.
Freetrade is ideal for stock pickers
Those who do want to invest in individual stocks may wish to check out Freetrade. Recently purchased by IG Group, it offers an easy-to-use platform with many investment options (find our full review here).
Today, Freetrade offers access to over 6,200 stocks (and you can buy fractional stocks) and exchange-traded funds (ETFs). This is likely to be more than enough options for a beginner investor.
It also has low fees. Currently, you pay no commissions to buy or sell stocks.
On the downside, if you want to invest through a Stocks and Shares ISA, you need to sign up for a paid plan. These start at £4.99 per month.
There are also foreign exchange (FX) fees for international stocks. These vary depending on the plan you choose but range from 0.39% to 0.99%.
Vanguard is brilliant for low-cost funds
Finally, we can’t discuss platforms for beginners and not mention Vanguard. It’s one of the world’s largest providers of low-cost investment funds (find our review here).
Through Vanguard, you can invest in the world’s financial markets very cheaply. For example, its FTSE Global All Cap Index Fund – which provides access to over 7,000 stocks globally – has an ongoing fee of just 0.23% (there are also platform charges of 0.15%).
You can also access some innovative ready-made portfolios such as LifeStrategy funds (which offer different risk levels) and Target Retirement funds (which are designed to automatically adjust the investment mix of the fund over time as you get closer to retirement), and a range of tax-efficient accounts.
With this platform, you can’t buy individual stocks or products from other providers. So that is one major disadvantage.
Overall though, this platform has a lot going for it. If you’re a beginner looking to set up a simple, low-cost investment strategy, it could be ideal.
Based in London, Edward is a distinguished investment writer with an extensive client portfolio comprising a diverse array of prominent financial services firms across the globe. With over 15 years of hands-on experience in private wealth management and institutional asset management, both in the UK and Australia, he possesses a profound understanding of the finance industry.
Before establishing himself as a writer, Edward earned a Commerce degree from the prestigious University of Melbourne. Complementing his academic background, he holds the esteemed Investment Management Certificate (IMC) and is a proud holder of the Chartered Financial Analyst (CFA) qualification.
Widely recognized as a sought-after investment expert, Edward’s insightful perspectives and analyses have been featured on sites such as BlackRock, Credit Suisse, WisdomTree, Motley Fool, eToro, and CMC Markets, among others.
You can contact Ed at edward@goodmoneyguide.com
