Investment platforms are websites or apps that allow you to buy, sell, and manage investments yourself (i.e. DIY investing).
Traditionally a would-be investor would have telephoned their stockbroker to instruct them on an investment they would like to make. The stockbroker would have purchased the investment on their behalf using money deposited in their stockbroking account. Essentially, investment platforms are digital stockbrokers but, instead of calling someone to perform the transaction, it can be performed at the click of a button.
How to use
Below is a simplified timeline of how an investor uses an investment platform:
- Register Account – After registering for an account with an investment platform (also known as a fund platform) you will be able to log in to that account and browse through the investments on offer.
- Deposit Cash – You will then be able to transfer money into that account usually via a bank transfer or a debit card payment.
- Select Investment – Once you have found an investment you would like to purchase, you can select the size of the investment you would like to make and buy it.
- Process Purchase – The investment platform will then process that request. This does not happen right away as the platform provider will have to go to the market and make that purchase on your behalf.
- Complete Purchase – Once your purchase has been completed the investment will then appear in your account.
- Monitor Investment – By logging on to your account periodically you will be able to monitor your investment and watch it change in price as time goes by.
- Sell Investment – If you decide to sell that investment you simply select the amount you would like to sell.
- Process Sale – The platform provider will then return to the market and sell your investment (as with purchasing, this does not happen right away).
- Proceeds Deposited – The cash raised from the sale will then be deposited into your online account. You can either keep this money in the account to reinvest or withdraw the money.
The above timeline is a simplified guide and there are many different platforms, which can operate in different ways.
Things to consider
- There are fees associated with buying, selling and holding financial products on these platforms. The platform will levy a fee for holding your investments and may charge fees for performing the transactions. This is on top of fees levied by the fund or investment trust themselves.
- Many investment platforms are execution only, i.e. they do not offer investment advice and will allow you invest in any product on their platform, even if it may not be suitable for you. If in doubt always consult your financial advisor.
- Many investments can be held within Individual Saving Accounts (ISAs), allowing tax-free investments up to a value of £20,000 per financial year. Eligible investment platforms will allow you to open a Stocks & Shares ISA in which you can place your investments, but you can only open one Stocks & Shares ISA per tax year. See our ISA Guide for more details.
- Not every investment is available on every platform. Some investment platforms only offer a limited range of investments compared to others, so you might not be able to access certain investments unless you open an additional account with another platform provider. For example, some platforms are ‘funds-only’.
- Some investment platforms also provide mobile apps that allow you to access your investments on the go. As with all online financial transactions, you should take appropriate measures to stay safe online.
Sample of DIY Investment Platforms
- AJ Bell YouInvest
- Alliance Trust Savings
- Barclays Stockbroker
- Cavendish Online (funds only)
- Charles Stanley Direct
- Close Brothers A.M. Self Directed Service
- EQ Shareview
- Halifax Share Dealing
- Hargreaves Lansdown
- Interactive Investor
- Saga Investment Services
- ShareDeal Active
- SVS XO
- Telegraph Investor
- The Share Centre
- Trustnet Direct
- Willis Owen
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