Best 5 ETF Brokers UK – Buy ETFs with 0% Commission

Exchange-traded funds (ETFs) offer many benefits to investors based in the UK. In particular, they allow you to diversify across hundreds of assets through a single investment. ETFs are also a great option if you want to invest money in the financial markets but you don’t have much experience.

This is because your chosen ETF provider will buy and sell assets on your behalf. With that said, the difficult part is finding a UK ETF broker that meets your needs.

In this guide, we review the best ETF brokers in the UK right now. We’ll cover which ETFs the broker in question offers, how much they charge, what payment methods you can use, and more.

Top ETF Brokers 2020

Here’s a quickfire overview of our top-rated ETF brokers serving UK clients. Scroll down to read our full review on each broker!

  1. eToro – Overall Best ETF Broker in the UK
  2. Plus500 – Commission-Free ETF Trading Platform via CFDs
  3. IG – Trusted UK ETF Broker With ISA Accounts
  4. Fineco – Huge Library of ETFs at Just 0.25% Per Year

ETF Brokers Fees Comparison

Attempting to understand ETF broker fees can be challenging. We cover the main fees that you likely come across in a bit more detail further down. But for now, let’s compare the ETF broker fees charged by the above providers so that you have a clearer idea of what you’ll need to pay.

ETF Broker Commission Inactivity Fee Deposit Fee Withdrawal Fees
eToro FREE $10/month after 1 year 0.5% FX fee $5 (about £4)
Plus500 0% $10 per quarter after 3 months inactivity FREE FREE
IG £3 or £8 (plus ETF fee) £24 per quarter if less than 3 trades of £15,000 in invested capital 0.5%-1% on credit cards 0.5%-1% on credit cards
Fineco Bank £2.95 (1 free ETF per month) + 0.25% annually None FREE FREE

 

As always, the above fees can change at a moment’s notice – so make sure that you keep up to date with what your chosen ETF broker charges.

Best ETF Brokers UK Reviewed

There are many ETFs brokers in the UK to choose from. But, you’ll need to spend some time researching the platform before signing up. For example, you’ll need to look at fees, commissions, tradable ETFs, payment methods, customer support, and of course – regulation.

We have done the hard work for you by reviewing the best ETF brokers currently serving UK investors!

1. eToro – Overall Best ETF Broker with 0% Commission

eToro is making big waves in the UK investment scene, with the broker now home to over 13 million traders worldwide. The main attraction of this particular trading platform is that it allows you to invest on a commission-free basis. This means that you won’t need to pay any fees when you buy ETFs, shares, or cryptocurrencies.

In addition to this, eToro does not charge any ongoing maintenance fees, which is a major bonus. To put this into perspective, traditional UK brokers will often charge a flat dealing fee every time you invest in an ETF, alongside an annual fee that is based on the amount you have invested at the platform. But, none of these fees will be found at eToro. In terms of tradable assets, you will have access to over 150+ ETFs.

This number is constantly growing, and the ETFs are typically backed by large-scale providers like Vanguard, iShares, and SPDR. This ensures that you will have access to a variety of assets, markets, and economies. For example, if you want to invest in an index fund – there are plenty of ETFs such that track the FTSE 100, Dow Jones, S&P 500, and NASDAQ 100. There are also ETFs that track commodities like gold, corporate bonds, government bonds, and even interest rates.

eToro is also famous for its social and copy trading tools. As a social trading network, you can interact with other users to discuss tips and investment advice. eToro also offers copy trading tools that allow you to copy the entire portfolios of top investors on the platform!

On top of low-fees, we should note that eToro stands out for its user-friendly service. Put simply, even if you have never invested in ETFs previously, you’ll find using eToro a breeze. In terms of getting started, you will need to deposit at least $200 (£160-ish), albeit, the minimum investment per ETF is just $50 (£40-ish). The platform supports several UK payment methods, including a debit/credit card, e-wallet, or bank transfer. eToro is regulated by the FCA, ASIC and CySEC and you are covered by the FSCS.

Pros:

  • Super user-friendly online trading platform
  • Buy stocks without paying any commission or share dealing charges
  • Trade CFDs in the form of stocks, indices, commodities, forex, and more
  • 1,700+ stocks listed on the UK and international markets
  • 150+ ETFs
  • Deposit funds with a debit/credit card, e-wallet, or UK bank account
  • Ability to copy the trades of other users
  • FCA and FSCS protections

Cons:

  • Not suitable for advanced traders that like to perform technical analysis

75% of retail investors lose money trading CFDs at this site

2. Plus500 – Commission-Free ETF Trading Platform via CFDs

Plus500 offers an alternative way to access the multi-trillion pound ETF industry. This is because it offers CFDs as opposed to traditional assets. This means that you will be speculating on whether you think the ETF will increase or decrease in value, rather than owning the underlying assets. For example, if you are trading the Vanguard FTSE Developed Markets Index Fund ETF at Plus500 and it has a real-time market price of $40.96 – the CFD will reflect this like-for-like.

Trading in this manner via Plus500 offers several perks that you won’t find at an old-school brokerage house. For example, as per UK limits, Plus500 allows you to trade ETFs with leverage of 1:5. This means a £100 account balance would give you £500 in trading capital. Just remember that ETFs, like all financial instruments, can be high risk and display volatility, so use leverage with caution.

Plus500 also allows you to choose from a buy or sell order. This means that you predict that the value of the ETF will go up or down depending on your own research.

An additional reason why Plus500 makes our list is that it allows you to trade ETFs without paying any commission. Moreover, the CFD trading site offers really tight spreads on its ETF markets. For example, the iShares China ETF and Vanguard Real Estate ETF can be traded with a spread of just 0.13% and 0.18%, respectively. If you do like the sound of CFD trading, Plus500 offers a range of other asset classes, too. This includes stocks, indices, bonds, cryptocurrencies, forex, commodities, and more.

In terms of the fundamentals, Plus500 requires all active traders to first open a brokerage account. In order to do this, you’ll need to meet a £100 minimum deposit. The platform supports UK debit/credit cards and Paypal – both of which are instant. You can also elect to transfer funds from your UK bank account. If you want to practice trading CFDs before using your account balance, Plus500 offers a demo account facility. This CFD trading is fully regulated including a license with the FCA.

Pros:

  • Commission-free CFD platform – only pay the spread
  • Thousands of financial instruments across heaps of markets
  • Retail clients can trade stock market CFDs with leverage of up to 1:5
  • You can short-sell a stock CFD if you think its value will go down
  • It takes just minutes to open an account and deposit funds

Cons:

  • More suitable for experienced traders

80.5% of retail investors lose money trading CFDs at this site

3. IG – Trusted UK ETF Broker With ISA Accounts

IG offers the full package to UK investors. Crucially, by opening an ETF trading account with this trusted platform you will have access to over 12,000 traditional assets. On top of shares, this includes index tracker funds, investment trusts, and mutual funds. This ensures that you can build a solid portfolio of diversified assets with ease. If its only ETFs that you are interested in, you’ll be pleased to know that IG offers over 2,000 markets.

These are backed by some of the world’s largest ETF providers, including but not limited to Invesco, iShares, and Vanguard. In terms of fees, this will depend on a couple of factors. Firstly, ETF dealing fees will cost you £8 per trade, which needs to be paid when you invest and again when you sell. But, if you place more than 3 trades per month at IG (any asset, not just ETFs), you can get this down to just £3.

In addition to its dealing fees, you also need to pay an ETF maintenance fee. This is charged by the provider in question and subsequently passed on to you as an investor. Major index tracker ETFs can cost as little as 0.04%, albeit, more exotic options will cost more. With that said, it’s rarely more than 0.5% annually. We should note that if you do not place at least three trades per month – or hold at least £15,000 worth of investments, IG charges a £24 quarterly fee.

But, any commissions that you pay throughout the respective quarter will be dedicated from this value. For example, if you place two ETF trades at £16 in commission, you’ll only pay £8 (£24-£16).   Nevertheless, an additional benefit of using IG as your go-to ETF broker is that it also offers ISAs. This means that you shield the first £20,000 invested annually from HMRC. In terms of getting started, this FCA broker requires a minimum deposit of £250. Debit/credit cards and bank transfers are supported.

Pros:

  • Trusted UK broker with a long-standing reputation
  • More than 12,000 traditional assets
  • Good value share dealing services
  • Leverage and short-selling also available
  • Spread betting and CFD products
  • Various account types
  • Great research department

Cons:

  • A minimum deposit of £250
  • US stocks have a $15 minimum commission

Your capital is at risk

 

4. Fineco – Huge Library of ETFs at Just 0.25% Per Year

Fineco logoFineco Bank is an online trading platform that you might not have heard of – not least because it is backed by an Italian financial institution. However, the platform is well worth considering in your hunt for a UK ETF broker, as it offers some very competitive fees. For example, on all balances up to £250,000, you will pay an annual fee of just 0.25%.

If you’re a large-scale investor looking for even lower fees, capital held at the platform in excess of £2 million will cost you nothing in annual fees. What we really like about the pricing structure at Fineco Bank is that you can buy or sell 1 ETF per month without paying any commission. If you upgrade to a Silver or Gold account, this goes up to 4 or 10 ETF trades per month, respectively. After this, you will pay a flat commission of £2.95 per ETF investment.

If you plan to invest in non-UK-listed ETFs – such as those based in the US or Europe, you will pay a fee of $/€3.95 per trade.  We should also note that Fineco Bank allows you to buy heaps of shares at £2.95 per trade. This includes UK, US, and European companies, which is great. The main flaw that we can identify about Fineco Bank is that you cannot deposit funds with a traditional debit/credit card or e-wallet. Instead, you’ll need to transfer the money from your UK bank account.

As such, this means that you will need to wait a few days before the funds arrive.  Nevertheless, the minimum deposit at this UK ETF broker is £100 – which is great for those of you that wish to start off with a smaller investment. When it comes to the safety of your funds, Fineco is licensed by the FCA (as well as regulators in its headquarters of Italy). In addition to this, your funds are safeguarded by the FSCS.

Pros:

  • Invest in heaps of stocks and ETFs
  • 0.25% annual charge
  • UK, EU, and US stocks at £2.95 dealing fee
  • Heavily regulated
  • Minimum investment just £100
  • Mobile investment app available

Cons:

  • Cheaper options in the market
  • Does not support instant deposits via debit/credit cards or e-wallets
  • Somewhat complicated to use

 

Your capital is at risk

How to Choose the Best ETF Broker for You

No two investors in the UK are the same, meaning that you should spend some time searching an ETF broker before signing up. For example, while it’s all good and well that the platform gives you access to low-cost ETFs, it might not be suitable if a large minimum deposit is required.

As such, we would suggest checking off the following metrics in your hunt for the best UK ETF broker.

Regulation

When you come across a UK ETF broker that you think you like the look of, your first port of call should be to check the provider’s regulatory standing. This is fairly straight forward, as you should find this information at the bottom of the broker’s website. If the platform is FCA regulated, this will be displayed alongside its registration number.

You can verify this yourself by heading over the FCA online register. In addition to an FCA license, you should also make sure that your funds are covered by the FSCS. This is crucial, as if the broker ran into financial difficulties, your money would be protected up to the first £85,000 (much like you do with a UK bank).

ETF Assets

You need to spend some time reviewing the ETF broker’s website to see what financial markets it gives you access to. The whole point of investing in ETFs is to gain exposure to a diversified range of assets. As such, you’ll want to make sure that there is plenty of ETFs to choose from.

ETF markets UK

Some of the markets that our top-rated ETF broker eToro offer include:

  • Tracker funds like the FTSE 100 and Down Jones
  • Global bond funds covering corporate and government bonds
  • US Treasuries and other high-grade government securities
  • Commodities like gold
  • Emerging markets

As a side tip, if you’re not sure what an ETF actually gives you access to, you can search for it via the provider’s website. This will give you a full break down of what shares, bonds, or other assets the ETF holds. You should also make sure that you broker offers ETFs with high liquidity,

Fees

Although we provided a comparison table in the section above, it is important that you have a firm grasp of what fees you are likely to come across when using UK ETF brokers. 

Here’s the lowdown:

Dealing Charge

This is a dealing charge that you need to pay every time you trade. A trade is defined as a buy or sell order. For example, if using IG – you will pay an entry-level dealing charge of £8. This means that irrespective of how much you invest, you will pay £8 when you original buy the ETF. Then, when it comes around to selling your position, you will again pay £8. In the case of eToro, you will never pay a single penny in ETF dealing fees.

Annual Maintenance Fee

This is not to be confused with the fee charged by the respective ETF provider (see below). Instead, this is a platform fee charged by your chosen ETF broker.

For example, the likes of Fineco Bank will charge you 0.25% annually. This is based on the amount you have invested at the platform. So, £10,000 invested at Fineco would cost you £25 per year.

ETF Expense Ratio

Known as an ‘Expense Ratio’, this is the fee charged by the ETF provider. For example, let’s suppose that you invest Vanguard FTSE U.K. Equity Income Index Fund via your chosen ETF broker.

In this instance, Vanguard charges 0.15% annually. As such – this fee will then be passed on from your broker to you. Be careful here that your chosen UK ETF broker does not apply a mark-up on the ETF expense ratio – especially if they are charging their own platform fees.

Other Fees

On top of the core fees listed above, there are several other charges that you might come across when using the best online brokers for ETFs.

This includes:

  • Deposit/Withdrawal Fees: Some UK online ETF brokers charge a deposit and/or withdrawal fee. This might be a flat fee or a percentage against the amount being funded.
  • Inactivity Fee: This is charged if your account remains dormant for a certain period of time – usually 12 months. Once it kicks in, this will usually be charged every month until your account goes down to zero (or you place a trade).
  • Overnight Financing: If you decide to trade ETFs in the form of CFDs, then you need to watch out for overnight financing fees. This is because CFDs are leverage financial products and thus – a fee is paid for each day the trade remains in play.
  • Spreads: This is the difference between the buy and sell price of your chosen ETF. The larger the gap, the more you are indirectly paying in fees. This is why we always advise sticking with UK online ETF brokers that offer tight spreads.

As you can see from the above, there are heaps of different fees that you need to be made aware of before taking the plunge with an UK ETF broker. With that said, if you don’t have time to research this yourself, rest assured that eToro is often regarded as the cheapest ETF broker in the UK.

Platform & Usability

Regardless of what you are trading, investing online can be an intimidating process if you are a complete newbie. After all, you are going to be risking your hard-earned money. As such, it’s best to stick with UK ETF brokers that offer a super user-friendly platform and interface.

Buy ETFs online UK

This should begin with the initial set up process in terms of registering and depositing funds. Then, the ETF broker should make it simple to browse the many assets that it offers. This is usually broken down by the asset class – e.g. ETFs, stocks, bonds. The best UK ETF brokers also offer a search facility.

This allows you to search for the specific ETF that you wish to invest in without needing to browse hundreds of options. You then need to look at the actual investment process. You won’t want to go with an ETF broker that offers too many bells and whistles if you are a novice. Instead, the likes of eToro simply ask you to enter your stake – and that’s it, the investment process is complete.

Trading Tools & Features

The most seasoned of investors in the UK will typically opt for the best online brokers that offer a range of tools and features. The specific ones that you should be looking out for will ultimately depend on your investment experience. For example, if you are an advanced trader with lots of experience, then you’ll likely want access to technical indicators and advanced fundamental research tools.

At the other end of the spectrum, newbies will likely find the Copy Trading feature at eToro useful. This is because you can elect to copy an experience ETF investor like-for-like. In other words, when they buy, you buy.

ETF brokers in the UK

You might also be interested in market orders like stop-loss or take-profit when trading or investment in ETFs. This allows you to set clear entry and exit parameters so that your trade is automatically closed. For example, a stop-loss will ensure that you do not lose more than you planned – say 5%. Take-profits will lock in your profits when they are triggered.

Education, Research & Analysis

If you’re an experienced ETF investor then you likely won’t be interested in educational tools. But, these can be invaluable if you are just starting out in the space.

For example, the likes of eToro offer regular webinars where you can tune in to the thought process of an in-house trader. The platform also offers guides and video explainers. Then you have Capital.com – which offers a native educational app.

Best ETF Brokers research

When it comes to research, we typically only recommend ETF online brokers that offer market insights and key news developments. This ensures that you are kept abreast with what is happening in the financial markets and thus – how this might impact the value of your ETF investment.

Mobile App and Device Compatibility

If you are thinking about trading or investing in ETFs online – we would also suggest that you look to download a free stock trading app. The best UK ETF brokers in the space offer investment apps on both iOS and Android devices. This ensures that you never miss an ETF investing opportunity again. It also allows you to quickly close a losing position when you are away from your desktop device.

Payments

Many UK investors will go through the process of opening an ETF broker account, only to then realize that their preferred payment method isn’t supported. The best UK ETF brokers support instant payment methods such as a debit/credit card or e-wallet. This allows you to get started straight away, without needing to wait 2-3 days for a bank transfer to arrive.   

On top of the platform’s supported payment methods, you also need to explore what fees are involved. As noted above, you might incur a deposit/withdrawal fee. You should also explore how long the ETF broker takes to process withdrawal requests. We prefer it when this is executed in no more than 48 hours.

Customer Service

if you need assistance, you’ll want to have an account with a UK ETF broker that offers top-notch support. There are various contact channels offered by platforms, although we prefer live chat for ease.

Some ETF brokers will also a telephone support line. You’ll probably want to avoid online brokers that only offer email support, as it might take a few days to receive a reply. This won’t be sufficient if your enquiry is of an urgent nature.

How to Get Started with an ETF Broker

By this point in your guide, you should now have an ETF broker that you like the look of. If so, it’s now time to open an account, deposit some funds, and make an investment. Not sure how to get started? If so, below we walk you through the process with top-rated commission-free ETF broker eToro.

Step 1: Open an Account and Upload ID

Irrespective of which UK ETF broker you decide to use, you’ll need to first open an account. If opting for eToro, the process only takes a couple of minutes.

eToro sign up

All you need to do is provide some personal information (full name, home address, etc.) and some contact details. You’ll also need to choose a username and a strong password so that you can log in to your eToro account with ease.

Note: As eToro is regulated by the FCA it is required to verify the identity of all account holders. This means that before you make a withdrawal (or deposit more than $2,250), you’ll need to upload a copy of your ID and a proof of address (utility bill or bank account statement). 

Step 2: Deposit Funds

eToro will now ask you to make a deposit of at least $200. You can do this instantly by using your everyday UK debit/credit card. You can also elect to use an e-wallet like Paypal or Skrill – which is instant. If you decide to transfer funds from your UK bank account expect to wait a couple of days.

Note: All eToro deposits attract an FX fee of 0.5%. After this, you can access all UK and international ETFs without needing to worry about fluctuating exchange rates. 

Step 3: Invest in an ETF

If you know which ETF you wish to invest in, search for it and then click on the result that loads up. If not, click on the ‘Trade Markets’ button (left-hand side of the screen) followed by ‘ETFs). You then be able to view all 150+ ETFs hosted by the platform.

Best ETF Brokers UK - Buyshares - 5053

Upon finding an ETF that you want to invest in, you will then need to set up a buy order. This simply lets eToro know what investment you wish to make. All you need to do is enter your total investment (in US dollars) and click on the ‘Open Trade’ button.

Best ETF Brokers UK - Buyshares - 5053

That’s it – you’ve just invested in an ETF online without paying a single penny in commission!

Conclusion

ETFs are getting more and more popular with UK investors. Not only do they allow you to invest without needing to pick individual assets, but they are great for diversification purposes. However, the most important thing is that you choose a suitable ETF broker that offers great fees, heaps of markets, and an all-round seamless user-experienced.

From the dozens of UK ETF brokers that we have personally tested, we believe that eToro is by far the best option on the table. Once you open an account you will have access to over 150+ ETFs – all on a commission-free basis. You can also invest from just $50 into your chosen ETF, so you don’t need to break the bank to get started!

eToro – Best UK ETF Broker with 0% Commission

75% of retail investor accounts lose money when trading CFDs with this provider.

FAQs

How do I buy an ETF in the UK?

If you want to buy an ETF in the UK, you will first need to find a regulated broker that offers your desired market. Then, it's just a case of opening an account, making a deposit, and choosing how much to invest!

Can I buy US ETFs in UK?

You certainly can. With that said, you need to keep an eye on fees, as most UK online brokers will charge you a premium to buy US-listed ETFs. eToro, on the other hand, only charges an initial FX fee of 0.5% when you make a deposit. After that, you can buy US and international ETFs without paying a single penny in commission.

How are ETFs taxed in the UK?

Put simply, ETFs are taxed in the same way as traditional shares. This means that in the UK, you might be liable for capital gains and dividend tax. Don't forget, you get £12,300 in capital gains allowance in the UK, alongside £2,000 of dividend allowance. This is reset each year and the allowance is sometimes increased by HMRC.

Can you lose all your money in ETF?

As long as you do not apply leverage, it would be virtually impossible for the value of your ETF to go to zero. After all, ETFs usually consist of hundreds, if not thousands of different assets. Even if the ETF was tracking a single asset like gold, the likelihood of this going to zero is non-existent.

Are UK ETF brokers regulated?

Yes, ETF brokers serving UK clients need to hold a license with the FCA. If it doesn't, avoid it.

 

 

All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Kane Pepi

About Kane Pepi

Kane Pepi is a British researcher and writer that specializes in finance, financial crime, and blockchain technology. Now based in Malta, Kane writes for a number of platforms in the online domain. In particular, Kane is skilled at explaining complex financial subjects in a user-friendly manner. Academically, Kane holds a Bachelor’s Degree in Finance, a Master’s Degree in Financial Crime, and he is currently engaged in a Doctorate Degree researching the money laundering threats of the blockchain economy. Kane is also behind peer-reviewed publications - which includes an in-depth study into the relationship between money laundering and UK bookmakers. You will also find Kane’s material at websites such as MoneyCheck, the Motley Fool, InsideBitcoins, Blockonomi, Learnbonds, and the Malta Association of Compliance Officers.