Best investment trading apps UK in December 2022

Today’s smartphones and tablets make it possible to manage your investments from a mobile device.

A report from Boring Money showed that mobile communications - smartphones and tablets – are becoming the dominant medium for younger investors buying shares and investment funds.

Private investors are increasingly using trading apps, not to just to buy the odd stock, but to run their entire investment portfolios.

Whether you’re new to the concept, or a veteran of the markets, here’s a look at the rise of trading apps and tips on how to choose the one that best suits your needs.

Getting started

Most investors who want to deal in stocks and build a portfolio of funds do so nowadays through an online dealing account.

Some of the biggest names in stockbroking and fund management provide investment platforms to cater for this need, with tools and services aimed at a desktop or laptop-orientated customer base.

Desktop to mobile

In the past couple of years, however, there has been a shift from desktop to mobile trading by investors 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 financial instruments, but are only available via a mobile app.

To keep pace, providers of traditional, desktop-orientated 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.

One of its rivals, AJ Bell, launched a service in 2022 called Dodl. The app is aimed at younger customers looking to buy a limited range of investments. One of Dodl’s key features is that it will allow investors to buy shares ‘commission-free’.

In recent years, commission-free trading has become a major selling point for several trading apps that rely on other fees to make their money.

For more information about trading charges in general, see below.

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 apps for a range of trading scenarios

The investment trading app marketplace is getting increasingly crowded. Here’s a selection covering a range of scenarios, from novice traders to more sophisticated investors.

1) eToro – good for beginners and social

eToro claims to be a “bridge between the old world of investing and the new” as well as the “only place where investors can hold traditional assets, such as stocks and commodities, alongside ‘new’ assets such as the cryptocurrency Bitcoin”.

The app offers a decent mobile experience and, along with several of its rivals, provides the added appeal of zero-commission trades.

eToro’s social trading platform and copy trading facility allows users, not just to follow, but copy the trades of legitimate investors with proven track records. FCA regulated.

2) Freetrade - good for easy investing and guides

Freetrade’s basic service offers commission-free trading and provides access to large and mid-cap stocks in both the UK and US, as well as initial public offers (IPOs) and special purpose acquisition companies (SPACs).

It also provides limited access to a range of companies listed on the German, Finnish and Dutch markets.

Freetrade Plus costs users an additional £9.99 per month but offers a wider investment choice including all other London-listed (main market and AIM) small cap shares as well as access to all other European shares. FCA regulated.

3) Fidelity Personal Investing - good for funds

Investors can choose from over 2,500 funds, as well as shares from the FTSE 100, FTSE 250, FTSE All-Share and FTSE AIM 100. Investment trusts, exchange-traded funds (ETFs) and some Irish shares are also available.

Users can link to the accounts of family members to see everything in one place, while a Watchlist tracks the performance of up to 50 investments at any one time. FCA regulated.

4) Trading212 - good for practising trades using virtual money

Trading 212 offers unlimited commission-free trades with access to 10,000+ stocks and ETFs from the UK, US, Germany, France, Spain, Netherlands and other markets.

For those looking for more sophisticated investments, Trading 212 also offers 3,000+ contracts for difference on stocks, forex, gold, oil and indices.

Users can start with a free, lifetime practice account that uses virtual money. FCA regulated.

5) IG - good for more experienced investors

IG allows users to trade on more than 17,000 global markets, including shares, indices, options and commodities.

IG features interactive charts, news, automatic trading alerts and real-time signals. Users can spread bet or trade contracts for difference (CFDs) - a sophisticated type of investment - on commodities and options trading is available on various assets timed daily, weekly and monthly. FCA regulated.

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”.

Frequently Asked Questions

Which is the best investment trading app for beginners?

The marketplace for trading apps has become increasingly crowded in recent years.

On the one hand, longstanding share dealing providers have adjusted their offerings to include apps aimed at investors ‘on the go’ and to compliment more traditional ‘desktop’ based services.

At the same time, a new breed of fintech providers have emerged on the scene bypassing traditional services and offering app-only products aimed at younger investors.

As with so many financial decisions, there’s no clear-cut choice that will suit everyone when it comes to choosing an app. Much of the decision will depend on what a would-be investor wants from a service.

But an important consideration is charges. These ultimately eat into investment performance, so keeping them to a minimum is sensible. The investing space is cluttered with variable fees and costs making it a complicated business for investors to work out what they will actually pay to make a trade.

Some providers impose a flat fee per trade when it comes to the buying and selling of shares, while others structure their charges to benefit customers who trade markets more frequently.

Users may also find themselves billed according to the size of their investment and some providers impose a monthly subscription or admin fee regardless of whether any trading has taken place.

Charges aside, there are other features and considerations worth bearing in mind to get the most out of a trading app experience. These include:

• The spread of investments on offer (For example, shares, funds, more sophisticated products)

• Whether the app is user-friendly

• Availability of educational/research tools

• Any minimum investment requirements

• Availability of social trading/community forums

• Customer service levels and support

• Ability to trade tax-efficiently through a stocks and shares ISAs

• Any extra benefits or rewards

• If the app is regulated

Before signing up to a particular app it helps if would-be users have some idea of what their investing style will be. Having an idea of outlay, frequency of trades and which markets are going to be of primary focus can help determine the best and most cost-effective app for an individual’s needs.

Which is the best commission-free trading app?

Several app providers promote their ‘commission-free’ 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, this doesn’t necessarily mean that a trading account is going to be totally without charges.

Brokers may make their money in other ways, such as charges for currency conversion – for example, when an investor looks to buy shares in overseas markets and requires their pounds sterling to be switched into US dollars. Or through withdrawal and even inactivity fees, where a trading account has been dormant for 12 months or more.

Are trading apps safe?

When choosing a provider, check a register published by the Financial Conduct Authority – the UK’s financial watchdog – to ensure that the platform you are using is authorised. This should provide access to the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme should an issue arise.

The FOS will consider complaints against trading providers and may be able to resolve a complaint if the firm in question fails to deal with an issue properly.

The FSCS will consider claims if a trading provider goes out of business and owes account holders money. This only relates, however, to certain investment products. If the product is covered, the FSCS can pay up to £85,000 per investor.

Check out, also, the protection offered by individual trading platforms – some are structured so that investments are held ‘in trust’ to protect them in the event that a provider runs into difficulties.

How do I start trading?

Opening an account can usually be carried out online and major platforms claim that users can be up and running within 10 minutes.

Would-be customers need to provide basic information such as bank account details, debit card details (for lump sum investments), National Insurance number, and a passport or driving licence.

Further documents to support identity verification may also be required, although these checks can be carried out electronically during the initial application process.

Once checks have been completed and funds have been received into an account, would-be investors are ready to start trading.

Minimum trading amounts vary among providers, but several allow accounts to be opened with as little as £1, or £25 a month for those services offering a monthly investing option. Depending on investment choices, further funds will need to be added to complete relevant transactions.

UK shares can be traded on a real-time basis between 8am and 4.30pm coinciding with the opening times for the London Stock Exchange. After logging into a trading account, search for companies by their trading name or ‘ticker (GSK for GlaxoSmithKline, for example) to select the shares to be bought or sold.