I have spent a huge amount of time reviewing around 25 platforms, i.e., websites on which you can set up pensions, ISAs and other investments. Click Here to see my reviews. Alternatively, you can conduct your own review using the methodology I share below.
Some platforms are dreadfully expensive and offer what I consider to be a terrible range of investments. Most are a bit clunky, limited or expensive. A handful of them offer a good range of investments, tax-efficient investment accounts and don’t charge too much.
On this page:
Introduction
How I scored the different platforms
Calculating the overall scores
My full review of investment platforms
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How I scored the different platforms
I started with the platforms that Which? magazine and its website have reviewed. I also then considered a few that came up a lot in my research.
The Which? review of platforms is good as far as it goes (you have to pay for a subscription to access it). But the folk there are not investment specialists and nor do they claim to be. Their reviews don’t address the fees incurred with specific investments as this is beyond their remit. For me, this is the most important factor, hence my reviews differ from those of Which?
My review of investment platforms covers everything relating to my concept of “How to invest without being ripped off”.
I assessed each platform according to criteria specified below.
Fund range
50% of the overall platform score
This is much the most important factor as far as I’m concerned.
If the platform doesn’t offer sufficient low-cost funds for me to build my investment portfolio then that platform is of no use to me.
My scoring process for the fund range worked as follows.
- Number of asset classes for which the platform has at least one of my low-cost funds. To get 100% in this grading, the platform must offer at least one fund in every one of the asset classes that I list in the book (I exclude gold because I don’t buy gold funds).
- Average number of low-cost funds in each asset class. For example, if a platform offers an average of eight out of 10 of the funds in each asset class, that platform scores 80% in this grading.
- Average number of the lowest-cost funds in each asset class. This focuses on the cheapest funds in each asset class. For example, I have 12 funds listed in the Global Corporate Bonds asset class. If a platform has all six of the cheapest, it scores 100% in this grading.
- Combining the previous three points, using this formula: Point 1 × (the average of Points 2 and 3).
Example
Let’s assume a platform has at least one fund in every asset class that I list. That’s a score of 100% for point 1.
Now let’s assume that the platform has an average of seven out of 10 of the funds listed. That’s a score of 70% for point 2.
Finally, let’s assume that the platform also has an average of half of the cheapest funds in each asset class listed. That’s a score of 50% for point 3.
In this example the calculation is: 100% × (average of 70% and 50%, or (70% + 50%) ÷ 2) = 100% × 60% = 60%. That’s a Fund range score of 60%.
Platforms that do not offer individual funds are of no use to me. Hence, I rated them as “did not qualify”.
Tax-efficient offerings for UK investors – 30% of the overall platform score
ISA offered – 15% of the overall platform score
SIPP offered – 15% of the overall platform score
The next most important fact for me is whether or not I can have a tax-efficient investment account i.e., either a SIPPA Self-Invested Personal Pension — a type of pension that lets you choose your own investments. or ISAAn Individual Savings Account — a tax-efficient account for saving or investing, up to an annual allowance.. (I explain what these are and their respective pros and cons in Section 6).
The point being that I don’t want to have to pay tax on any money my investments make if I can possibly avoid it.
As far as my scoring is concerned, the platform either does or doesn’t offer ISAsAn Individual Savings Account — a tax-efficient account for saving or investing, up to an annual allowance. or SIPPsA Self-Invested Personal Pension — a type of pension that lets you choose your own investments.. They were awarded 100% if they did offer an ISA or SIPP and 0% if they did not.
Low platform fees
12% of the overall platform score
I’ve largely focused on portfolios whose total value is up to £50,000 to keep things simple. Things get complicated quickly with platform fees because they all have different fee structures and rates, and some of them make it difficult to work out what you’re actually going to pay.
I calculated it by estimating what the costs would be on each platform allowing for a reasonable number of trades each year (e.g., one trade per investment type/asset class in each portfolio per year). I identified the platform charging the highest fee and gave it the lowest score of 0%. The other platforms were awarded scores according to how much lower than that their fees were.
This only contributes 12% to the overall platform score because it’s less important than the preceding factors.
Ease of use
8% of the overall platform score
This is more of a “nice-to-have” than an essential. The best-performing platform on this score for me was Halifax. It was a joy to use; simple, responsive, and easy to follow. Unfortunately, this wasn’t enough for it to earn it a place in my top selection of platforms because it didn’t score highly enough in the preceding factors.
As a side note, I did not consider the existence of mobile phone apps for the respective platforms for the simple reason that I want to forget about the investments. Having an app simply invites repeated viewings and worry about investments.
Notes
This is the section in which I add comments on why platforms scored the way they did. It also allows me to include background to the bald numbers which, on their own, don’t tell the whole story.
For example, one or two platforms earned high scores but did not make it onto my “Yes” list for reasons I explain in the notes for the respective platforms.
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Calculating the overall scores
I rated each platform according to the preceding factors and then applied the weighting to each factor. I then added them up to generate a final score.
Here’s how this worked in practice.
Example 1 – One of the platforms that I like
Example 2 – One of the platforms I don’t like
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My full review of investment platforms
Click Here to see my updated review of around 25 investment platforms.