Best ETF Broker UK – Top Platforms Compared
Even expert traders find it hard to choose a reliable ETF broker in the UK. The reality is that nobody likes to wade through hundreds of search results looking for a popular ETF trading platform UK. With so many options out there it can be hard to choose the right one for your needs and trading goals. In this guide we cover everything you need to know about exchange-traded funds.
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 option if you want to invest money in the financial markets but you don’t have much experience.
List of Popular ETF Brokers in the UK 2023
Here’s an overview of popular ETF brokers in the UK. Scroll down to read our full review on each broker.
ETF Trading Platform UK – 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.
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 UK charges.
ETF Brokers UK Reviewed
There are many UK ETF brokers 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.
XTB is a great ETF broker to use in the UK because it is regulated by the Financial Conduct Authority (FCA) and offers low trading fees. Traders can access over 3,000 markets with zero commission and also global real ETFs through the platform, including SPY.US, URA.US and QQQ.US. Furthermore, you can trade real ETFs with 0% commission and no trading limit, making it one of the cheapest ETF trading platforms.
If you are an advanced trader looking to increase the size of your position, XTB offers leverage of 5:1, so you can trade with a 20% deposit. Leverage enables traders to trade with more money than they have in their accounts, which can increase profits. However, leverage also increased the potential downside of a trade.
To help traders make informed decisions, XTB provides an advanced ETF scanner that will pick out potential trading opportunities and conduct analysis into the market. This can help to reduce analysis time and increase the profitability of trading through XTB.
XTB is available on both desktop and mobile devices and traders can use the xStation trading platform to conduct analysis using indicators before placing trades. The XTB trading interface is easy to use, even for beginner traders. What’s more, the platform provides a 24/5 customer service for users that can be used to answer any queries.
As well as ETFs, traders can access stocks, real shares, indices, commodities and forex through the XTB trading platform. This is excellent for traders who want to diversify their strategy. It is possible to practice trading on XTB for free using the demo account option.
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Plus500 offers an alternative way to access the multi-trillion pound ETF industry. This is because it offers CFDs as opposed to traditional assets like on other platforms like IG. 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.
This UK ETF broker 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.
3. Fineco Bank
Fineco Bank is a reputable platform and a listed bank in Europe. The bank provides excellent ETF trading services as well as stocks, shares, bonds, indices, commodities, CFDs and forex. The broker is an excellent option for anyone who wants to dierisfy their portfolio and expand into various markets.
Fineco is a global platform that offers 26 different global markets andover 20,000 assets to trade. Every year, Fineco executes around 40 million trades and has a large user base. One of the most appealing aspects of this bank is that they do not charge any commission or extra fees. The only fee that you pay when trading with Fineco is the spread.
Fineco aims to make investing accessible for everyone. Users can automatically invest in ETFs from £50 per month- this is a great way to invest passively and let the platform do the work for you. If you would prefer to manually place trades, Fineco offers a range of educational resources that can help you to navigate the market and make informed trading decisions.
Users can access ETFs from UK, European and US markets and can place trades in their local currency. Furthermore, Fineco has fantastic customer support services as well as access to a team of professional traders that can help you to decide on the best investments to make.
With Fineco, you can invest from your desktop or mobile device. Fineco’s mobile app provides everything that you need in one easy-to-access place. Desktop users can access the PowerDesk trading platform to analyse the market and gain insight into different funds that are available.
There is no minimum deposit to open a Fineco account. It is also possible to practice trading with a demo account before putting any money at risk.
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IG offers the full package to UK investors as a leading ETF platform UK. 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 it’s 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 ETFs. 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 to 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 ETF platform requires a minimum deposit of £250. Debit/credit cards and bank transfers are supported.
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What Features do ETF Brokers Offer
No two investors in the UK are the same, meaning that you should spend some time searching an ETF broker before signing up.
- ETF Assets
- Dealing Charge
- Annual Maintenance Fee
- ETF Expense Ratio
- Other Fees
- Platform & Usability
- Trading Tools & Features
- Education, Research & Analysis
- Mobile App & Device Compatibility
- Customer Service
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 straightforward, 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 to 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).
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.
Some of the markets that the ETF broker offers 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 breakdown of what shares, bonds, or other assets the ETF holds. You should also make sure that your broker offers ETFs with high liquidity,
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:
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 originally buy the ETF. Then, when it comes to selling your position, you will again pay £8. I
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.
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.
On top of the core fees listed above, there are several other charges that you might come across when using an ETF broker.
- 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 leveraged 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 online UK 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 XTB 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.
This should begin with the initial setup 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.
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.
Trading Tools & Features
Some seasoned investors in the UK may typically opt for an ETF broker UK that offers 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.
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, XTB offers regular webinars where you can tune in to the thought process of an in-house trader. The platform also offers guides and video explainers.
Mobile App & 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 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 close a losing position when you are away from your desktop device.
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. Some popular 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.
if you need assistance, you’ll want to have an account with a UK ETF broker that offers support. There are various contact channels offered by platforms, although we prefer live chat for ease.
Some ETF brokers UK 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 inquiry is of an urgent nature.
How to Open a ETF Broker Account
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. Below we go through the process of opening an account with a popular and regulated ETF broker.
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.
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 account with ease.
Note: As some brokers in the UK are 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
Deposit funds into your account via any of the supported payment methods offered by the ETF broker.
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.
Upon finding an ETF that you want to invest in, you will then need to set up a buy order.