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There is a clear and strong trend in the brokerage industry that a growing number of customers are choosing to trade at newcomer brokers that offer free trading. Regarding this trend, there is one obvious question many people ask: are free trading brokers better than incumbent online brokers?

To answer this question, BrokerChooser conducted an in-depth study that compares the costs and transparency of stock trading at newcomer and at incumbent brokers. This research was the basis for an article published on Sifted.  

BrokerChooser is a global fintech company for comparing and choosing quality stockbrokers, robo-advisors and more. For analyzing brokers, we have a detailed and professional methodology.

Scope of the research

To fully capture all trading costs, we analyzed the pricing and order execution quality of popular UK and US-listed real stock (not CFD) trades. Within pricing, we looked both at the trading (like a commission or spread) and non-trading fees (like withdrawal fee). Within order execution quality we analyzed the best execution prices and the slippage. The quality of order execution is important, since a low-quality execution is an implicit trading cost.

We focused on the UK brokerage market, as this is one of the most vibrant in terms of financial innovation. In order to have a broad comparison of popular UK online brokers we selected eight brokers that represent the UK market well.

The analysis was carried out by four Brokerchooser experts: three financial markets experts and one IT expert. The broker expert team collected all the pricing information and made a pricing model of a typical trade for four popular stocks: two UK-listed, two US-listed. The broker expert team also opened and used live trading accounts with all eight brokers. With the help of our IT expert, we developed a proprietary script to test order execution. This script is able to execute the same trades simultaneously on eight different trading platforms.

Main insights

Before the analysis, we formulated 10 hypotheses and we tested brokers to validate these:

 
Hypothesis Validation Notes
1. Incumbent broker trading costs are high Yes The trading costs are far higher than expected, can be 20x that of newcomers
2. Trading cost differences among newcomers are minimal Yes and No

UK: eToro is 10x cheaper, Freetrade and Trading212 at the same level

US: Freetrade is 10x more expensive, eToro, Revolut, Trading212 at the same level

3. Main driving factor of costs is the commission Yes and No For UK stocks yes, but for US stocks the FX conversion rate is also important
4. Newcomers charge hidden fees No We did not find any
5. Newcomers’ trade execution disadvantages customers No Did not find any evidence
6. Incumbents’ better execution compensates for high trading fees No Did not find evidence for better execution
7. Newcomers manipulate spreads No No evidence
8. Newcomers have higher slippage Yes and No It is not possible to make conclusions from reported data
9. Newcomers’ pricing is less transparent No You can find information mostly in the same quality
10. Newcomers’ order execution is less transparent Yes The order execution policy and order confirmation tickets of the incumbents are more transparent

Beyond hypotheses validation, we found these important takeaways:

  • The pricing determines the cost of trading more than the quality of the execution.
  • The spreads are basically the same among all brokers.
  • The best execution prices are usually very close to each other. Based on this, it seems you don’t get a compromised execution if you open an account with a newcomer, but you pay far less for it.
  • If there is a larger difference in the executed price, it is usually driven by some technical error of the trading platform.
  • We cannot draw any solid conclusion from the slippage test, since we were able to calculate the slippage only for two brokers. The main conclusion here is that most brokers are not transparent enough (do not show spreads or live market data) to be able to calculate slippage.

Fees insights

Within fees, we analyzed trading and non-trading fees, as well as the transparency of fee structures. To understand better why we selected the assets that we did, and what we did during our calculation, check our research methodology

Analysis of trading and non-trading fees

Newcomer brokers have lower total trading fees than incumbent brokers. The total trading fee can be 10-20x higher at incumbent brokers compared to free trading brokers.

  • The main drivers of total trading fees are commissions and currency conversion fees. Spread costs are the same at all brokers, while a custody fee is charged only at two brokers, Revolut and AJ Bell. A big difference is that eToro doesn’t charge a stamp duty, which makes its UK trading very competitive.
  • Among newcomers, there are only small differences if we don’t consider the stamp duty fee. If we consider the stamp duty fee, eToro has the lowest UK trading fees, while eToro and Revolut have the lowest US trading fees.
  • Among incumbent brokers, the differences can be quite big, e.g. HL charges 10 times more for US stocks than Interactive Investor.
  eToro Freetrade Revolut Trading 212 AJ Bell HL* IB** II***

*Lloyds total trading cost, GBP

1.3

12.5

NA

10.5

30.5

34.4

22.5

26.5

HSBC total trading cost, GBP

1.3

12.5

NA

10.5

30.5

34.4

22.5

26.5

GE total trading cost, GBP

2.9

23.7

2.9

3.2

63.7

67.6

5.8

18.9

Snap total trading cost, GBP

2.9

23.7

2.9

3.2

63.7

67.6

5.8

18.9

*Hargreaves Lansdown, **Interactive Brokers, ***Interactive Investor

For a detailed breakdown of trading fees, see Appendix A. Also, if you are interested in a detailed qualitative analysis of these brokers' fees, please check Appendix D.

In terms of non-trading fees, most brokers don’t charge high fees. The only exceptions are eToro, Interactive Brokers, and Interactive Investor: withdrawal and deposit can be costly at eToro, Interactive Brokers has a really high inactivity fee and Interactive Investor charges a high monthly fee. Non-trading fees weren’t in the scope of this analysis, but we have included it to provide a better understanding of the overall pricing.

  eToro Freetrade Revolut Trading 212 AJ Bell HL IB II

Monthly account fee, GBP

0

0

0

0

0

0

0

10.0

Deposit fee, GBP*

10.4

0

0.4

0

0

0

0

0

Withdrawal fee, GBP*

14.2

0

0.4

0

0

0

0

0

Inactivity fee charged after 1 year, GBP

7.7

0

0

0

0

0

92.3

0

 *Calculated for GBP 2,000 amount

Analysis of fee transparency

We have answered two questions here:

  • Is the fee structure of the broker transparent?
    • Before you open an account
    • After you open an account
  • Is the fee report (that you get after each execution) transparent and in line with the fee structure (no hidden fees)?

The transparency of the fee structures is mixed. The commission and the custody fees are transparent even before you open an account, but the spread in some cases is available only for clients that have a live account with the broker. The conversion rate formula (you need this to know the rate and the fee of the currency conversion) is the weakest link, since at some brokers this is not transparent at all.

The fee report (that you get after the execution) is always easy to find and we didn’t encounter any hidden fees compared to the fee structure. In these reports, all brokers disclosed the charged commission for the executed orders. The conversion fee was not transparent only in the case of Freetrade.

We did not find solid evidence for incumbents being more transparent. For the detailed fee transparency analysis, please check Appendix B

Order execution quality insights

With relation to order executions, we analyzed two aspects:

  1. We executed orders and checked the best executed price and slippage. 
  2. We checked the transparency of the order execution policy. 

You can see in more detail how we executed the orders in the methodology description.

Executed orders, best execution price analysis

The biggest takeaway is that none of the execution rounds showed a big enough difference in the execution price that would significantly affect the total cost of trade (which already includes the commission, spread, conversion and custody fee).

We calculated the percentage values of a so-called alternative cost of execution. This shows how much higher the execution price at a given broker was compared to the broker with the lowest executed price. 0% means that the broker has the lowest execution price. The following chart shows a summary of this for the Lloyds trades. 

Total trading cost of Lloyds share trading

It's clear that the main element within total trading costs is the trading fee. In the table below, you can see the alternative cost of executions for the various stocks, as well as in a geographic (US/UK) breakdown. We made multiple executions, and we averaged the alternative costs of executions. This is the reason why there is not always a broker with 0%.

  eToro Freetrade Revolut Trading 212 AJ Bell HL* IB** II***

UK+US

0.07%

0.05%

-

0.05%

0.03%

0.03%

0.05%

0.04%

UK

0.03%

0.01%

-

0.04%

0.03%

0.02%

0.03%

0.02%

US

0.10%

0.08%

0.08%

0.06%

0.04%

0.03%

0.08%

0.07%

Lloyds

0.03%

0.00%

-

0.01%

0.04%

0.03%

0.02%

0.02%

HSBC

0.03%

0.02%

-

0.07%

0.02%

0.02%

0.03%

0.01%

GE

0.14%

0.10%

0.10%

0.06%

0.06%

0.02%

0.10%

0.08%

Snap

0.07%

0.07%

0.07%

0.07%

0.01%

0.04%

0.07%

0.07%

*Hargreaves Lansdown, **Interactive Brokers, ***Interactive Investor

Executed orders, slippage analysis

The slippage test turned out to be unsuitable for analysis, since six out of the eight brokers did not show their live spreads (or any spread at all). Without a live spread the slippage cannot be calculated. The slippage could be calculated only for Trading 212, Interactive Brokers and eToro (but only for the buying).

Transparency of order execution analysis

We analyzed the order execution policies and the subsequent reports to check the transparency of order execution. Our conclusion is that incumbent brokers have more transparent order execution policies and reports than newcomers (except for Trading 212):

  • Interactive Investor, Interactive Brokers and Hargreaves Lansdown are the most transparent, while eToro, Freetrade and Revolut are the least transparent. 
  • Most brokers mention the best execution factors in their order execution policies. 
  • Incumbent brokers mention what the important factors are when selecting the retail service providers (their trading partners). Among newcomers, only Trading 212 does this.
  • Incumbents provide more detailed order execution reports, e.g. they disclose which venue the order was executed on or what exchange rate they used for conversion.
  • Most incumbent brokers are partnered with independent firms that check the quality of order executions regularly. None of the newcomers conduct similar research.

In Appendix C, you can see the criteria we analyzed for order execution policies, and how the brokers performed along these criteria.

Methodology

In this chapter, you can read about our reasoning and the methods we used during our research:

Brokers, account types and base currencies we tested:

Brokers (4 newcomers and 4 incumbents) Account type Account base currency

eToro 

Standard account

USD

Freetrade

Basic account

GBP

Revolut

Standard account

USD

Trading 212

Standard investing account

GBP

AJ Bell Youinvest

Dealing account

GBP

Hargreaves Lansdown

Fund and share account

GBP

Interactive Brokers

Individual account

GBP and USD (multi-currency account)

Interactive Investor

Trading account with the investor service plan

GBP and USD (multi-currency account)

Stocks we selected

We decided on real stocks as our chosen asset class on the UK and US markets, as equities are the most popular instruments among clients according to traded volume. The chosen assets were the following:

  • UK: Lloyds Banking Group (LLOY:LSE) , HSBC Holdings (HSBA:LSE)

  • US: General Electric (GE:NYSE), Snap Inc. (SNAP:NYSE)

These assets were all available at our selected brokers, and they are also quite popular as their traded volume is very high. Please note that Revolut only had US stocks at the time of analysis (January-February 2020).

Trading scenario modeled in fee calculations

Our research simulates the trade from a UK investor/trader’s point of view. This means a GBP base currency account where only one base currency is available, and both GBP and USD accounts in the case of brokers where it is possible to hold more currencies at one account. We covered all the possible fees that customers would pay.

1. Trading fees: 

  • Commission -  fee charged by broker, it can be a volume-based or a flat fee. 
  • Spreads - the difference between the “ASK” (Buy) and “BID” (Sell) price.
  • Currency conversion fee -  it occurs when you trade an asset denominated in a currency other than your account currency. Some brokers provide multi-currency accounts, i.e. you can hold your cash in multiple currencies at the same time, in which cases no currency conversion fee is charged. Example of conversion fee: you buy a US share from your GBP account.
  • Custody fee - it is a volume-based, annual portfolio fee. 
  • Stamp duty - it’s a fee charged for UK stock purchases. The fee is 0.5% of the trade value.

2. Non-trading fees: 

  • Account fee - fee charged for the maintenance of your account.
  • Fees for deposit and withdrawal - fees charged for funding and withdrawal. These can involve flat fees and/or fees for converting your funds.
  • Inactivity fee - fee charged if you don’t trade for a specific period.

For the calculation of trading fees, we used the following assumptions:

GBP/USD exchange rate

1.3

Trade value for UK stocks (in GBP)

2000

Trade value for US stocks (in USD)

2600

Holding the position (in days)

7

Lloyds UK stock price (GBP)

0.60

Number of shares with Lloyds price

3333

HSBC UK stock price (GBP)

5.90

Number of shares with HSBC price

339

SNAP US stock price (USD)

18.98

Number of shares with SNAP price

137

GE US stock price (USD)

11.71

Number of shares with GE price

222

Amount for deposit/withdrawal (in GBP)

2000

Inactivity time (in months)

12

Methodology for calculating different fees

A. Commission calculations:

When we calculated commissions, we used market orders. Among the analyzed brokers, only Freetrade has additional fees for market orders (£1 for market orders, while £0 for basic orders). 

When:

We collected the information on commissions between January 20-27, 2020.

How:

We calculated the commissions in GBP using the above-mentioned assumptions. Information was provided by the brokers’ default web pages. We also cross-checked when we executed our orders.

B. Spread calculations: 

During our spread cost calculations, we assumed that half of the spread is the explicit cost per trade. Revolut, eToro, and Freetrade don’t display the spreads transparently. We used the spreads calculated at other brokers because these spreads were the same.

When:

We checked the difference between the “ASK” and “BID” five times on January 27 and 29. From that, we calculated an average spread and cost for every broker.

How:

We opened every trading platform simultaneously, after which we picked the analyzed asset. At a planned, coordinated exact point in time, we made screenshots and calculated the spread costs by subtracting the BID price from the ASK price, then dividing the result by two.

C. Calculations of currency conversion for trading:

We calculated currency conversion fees for those brokers that don’t provide multi-currency accounts, but offer assets denominated in currencies other than the available account currency. A multi-currency account means that you can hold different currencies in the same account, e.g. holding cash in both GBP and USD. Brokers without multi-currency accounts are Freetrade, Trading212, eToro, Hargreaves Lansdown, and AJ Bell Youinvest. 

When:

We collected the information on currency conversion fees between January 20-27, 2020.

How:

We calculated both the currency conversion fee charged by brokers and the spread cost. For currency conversion fees charged by brokers, we used the information available on the brokers’ websites. We also cross-checked these fees when we executed our orders. Regarding the spread cost, we calculated with interbank rate spreads gathered from Reuters Eikon between 2 and 3 p.m. ETC on January 31, 2020. 

D. Custody, account and inactivity fee calculations:

We used a one-week trading scenario; as custody fees are levied annually, we calculated with a time-proportionate fee for one week.

The account fee is dependent on the account type the client chooses. Among the account types we tested, only Interactive Investor charges a monthly account fee.

We calculated an inactivity fee for a scenario when clients don’t trade at all for 12 months.

When:

We collected the information on custody, account and inactivity fees between January 20-27, 2020.

E. Funding and withdrawal fee calculations:

We assumed that customers deposit from / withdraw to GBP bank accounts. Therefore, we calculated currency conversion fees only in cases when you can’t use GBP accounts, namely at Revolut and eToro. 

We assumed that clients use the standard (not instant) withdrawal, and the number of withdrawals doesn’t exceed one per month. 

When:

We collected the information on funding and withdrawal between January 20-27, 2020.

How:

We calculated the deposit/withdrawal fees charged by brokers and the currency conversion fees, which cover both the fees charged by brokers and spread costs. For deposit/withdrawal fees and currency conversion fees charged by brokers, we used the information available on the brokers’ websites. Regarding the spread cost, we calculated with interbank rate spreads gathered from Reuters Eikon between 2 and 3 p.m. ETC on January 31, 2020.

Order execution testing methodology

It's important to execute the orders at exactly the same time, as market conditions change by the millisecond. To solve this problem, we developed a script that is able to execute the same trades simultaneously on eight different trading platforms.

The order execution test was done with the following:

  • Two rounds of trades (buy and sell) for UK shares
    • Lloyds, 75 shares
    • HSBC, 7 shares
  • One round of trades (buy and sell) for US shares
    • GE, 4 shares
    • Snap, 3 shares

The orders were executed with our proprietary script, which started the execution at almost exactly the same time at each broker. Seven platforms were running on the same PC, while the FreeTrade app was attached to this PC on an Android smartphone. The orders were executed during “normal” market conditions on January 29 and 30, 2020. The longest-running time of the script was 1488 milliseconds, and the shortest was 871 milliseconds. The script took a screenshot before the execution, so the slippage was calculated based on this. We used market orders at every broker.

Appendices

A. Detailed breakdown of trading fees

  eToro Freeetrade Revolut Trading 212 AJ Bell HL IB II

Lloyds total trading cost, GBP

1.3

12.5

NA

10.5

30.5

34.4

22.5

26.5

Commission, GBP

0.00

1.00

NA

0.00

9.95

11.95

6.00

7.99

Spread, GBP

0.25

0.25

NA

0.25

0.25

0.25

0.25

0.25

Custody fee, GBP

0

0

NA

0

0.10

0

0

0

Conversion fee, GBP

0.40

0

NA

0

0

0

0

0

Stamp duty, GBP

0.00

10.00

NA

10.00

10.00

10.00

10.00

10.00

HSBC total trading cost, GBP

1.3

12.5

NA

10.5

30.5

34.4

22.5

26.5

Commission, GBP

0.00

1.00

NA

0.00

9.95

11.95

6.00

7.99

Spread, GBP

0.25

0.25

NA

0.25

0.25

0.25

0.25

0.25

Custody fee, GBP

0

0

NA

0

0.10

0

0

0

Conversion fee, GBP

0.40

0

NA

0

0

0

0

0

Stamp duty, GBP

0.00

10.00

NA

10.00

10.00

10.00

10.00

10.00

GE total trading cost, GBP

2.9

23.7

2.9

3.2

63.7

67.6

5.8

18.9

Commission, GBP

0.00

1.00

0.00

0.00

9.95

11.95

1.44

7.99

Spread, GBP

1.44

1.44

1.44

1.44

1.44

1.44

1.44

1.44

Custody fee, GBP

0

0

0.01

0

0.10

0

0

0

Conversion fee, GBP

0

9.40

0

0.15

20.40

20.40

0

0

Snap total trading cost, GBP

2.9

23.7

2.9

3.2

63.7

67.6

5.8

18.9

Commission, GBP

0.00

1.00

0.00

0.00

9.95

11.95

1.44

7.99

Spread, GBP

1.44

1.44

1.44

1.44

1.44

1.44

1.44

1.44

Custody fee, GBP

0.00

0

0.01

0

0.10

0

0

0

Conversion fee, GBP 

0

9.40

0

0.15

20.40

20.40

0

0

B. Fee transparency

  eToro Freeetrade Revolut Trading 212 AJ Bell HL IB II
Fee structure transparency

Commission transparency

Non-user

Non-user

Non-user

Non-user

Non-user

Non-user

Non-user

Non-user

Spread transparency

User

Not relevant

Not relevant

User

User

Non-user

Non-user

Non-user

Custody fee transparency

Not relevant

Non-user

Non-user

Not relevant

Non-user

Non-user

Non-user

Not relevant

Conversion rate formula transparency

Not transparent

Non-user

Non-user

Not transparent

User

User

User

Not relevant

Stamp duty transparency

Non-user

User

Not relevant

User

Non-user

Non-user

Non-user

Non-user

Fee report transparency (after the trade execution)

Fee report searchability

Easy

Easy

Easy

Easy

Easy

Easy

Easy

Easy

Fee report - Commission

Transparent

Transparent

Transparent

Transparent

Transparent

Transparent

Transparent

Transparent

Fee report - Conversion fee

Not relevant

Not transparent

Not relevant

Not relevant

Transparent

Transparent

Not relevant

Not relevant

Fee report - Stamp duty 

Not relevant

Transparent

Not relevant

Transparent

Transparent

Transparent

Not transparent

Transparent

Description of data points:

  • Non-user: the info on the given fee criteria is transparent without having to hold an account at the broker
  • User: the info on the given fee criteria is not transparent without having an account at the broker
  • Transparent: the fee is included in the fee report
  • Not relevant: the broker doesn’t charge such fees
  • Not transparent: it can’t be checked at all

C. Transparency of order execution policy 

We checked 11 criteria in the order execution policies and gave 1 point for each criteria the broker satisfied.

  eToro Freeetrade Revolut Trading 212 AJ Bell HL IB II

Order execution transparency score

4

4

3

7

7

8

9

9

Detailing the best execution factors

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Detailing the importance of execution factors

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Detailing how it selected RSPs

No

No

No

Yes

No

No

Yes

Yes

Detailing which RSPs/venues

No

No

No

No

Yes

Yes

Yes

Yes

Measuring order execution quality by independent firms

No

No

No

No

Yes

Yes

No

Yes

Monitoring order execution policy

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Glossary

No

No

No

Yes

Yes

No

No

Yes

Can you select the venue where you execute the order

No

No

No

No

No

No

Yes

No

Order report includes where the order executed

No

Yes

No

No

No

Yes

Yes

No

Order report includes the stock price in its currency

Yes

No

Yes

Yes

No

Yes

Yes

Yes

Order report includes the conversion rate (1 if not relevant)

No

No

Not relevant

Yes

Yes

Yes

Not relevant

Not relevant

D. Trading, non-trading fees for each broker

You can find a detailed qualitative analysis of brokers:

eToro fees

Recommended for

Traders and investors, using USD-based bank accounts, and preferring an advanced but a bit complex platform.

Fees insights

Pros: The trading fees are competitive, there is no commission or custody fee. It’s a great advantage that it doesn’t pass on stamp duty charges.

Cons: Non-trading fees are not competitive. There is a withdrawal fee. You can hold only USD accounts, therefore, both deposit / withdrawal are charged by a currency conversion fee for non-USD transfers and there is a currency conversion when you trade with non-USD stocks.

Trading fees structure

- No commission

- No custody fee

- Currency conversion is executed on spot rate

- Stamp duty for UK stocks not paid

Non-trading fees structure

- No account fee

- No deposit fee charged by eToro, but there is a currency conversion if you deposit in other than USD, e.g. spot exchange rate + 50 pip when transfer from GBP account

- Withdrawal fee is $5 per withdrawal. There is also currency conversion for withdrawal (the same charge as at deposit)

- Monthly $10 inactivity fee after 12 months of inactivity

Freetrade fees

Recommended for

Customers focusing on the UK market, investing in the long-term, and preferring a minimalistic platform.

Fees insights

Pros: Freetrade has competitive trading fees on UK stocks. It’s also great that the number of free orders is unlimited. The non-trading fees are also competitive: there is no inactivity, withdrawal, or deposit fees.

Cons: US stock trading is costly because of the high currency conversion fees.

Trading fees structure

- Market / instant orders cost £1
- Basic orders are free, but they are executed only at 4 PM GMT+0
- Currency conversion fee is spot rate +0.45%
- Stamp duty for UK stocks paid

Non-trading fees structure

- No account fee for basic accounts; ISA accounts cost monthly £3
- No deposit fee
- Standard withdrawal is free, but same-day withdrawals cost £5
- No inactivity fee

Revolut fees

Recommended for
Customers focusing on the US market, occasionally investing and in the long-term, and preferring a minimalistic platform.
Fees insights

Pros: Revolut has competitive trading fees: there is no commission. The custody fee is much lower than at incumbent brokers (0.01% VS 0.45%) The non-trading fees are also competitive: e.g. there is no inactivity or deposit fee.

Cons: The number of free trades is limited on Standard and Premium accounts. If you use Premium or Metal accounts, there is a monthly fee. You can use only USD accounts, therefore you have to convert your GBP into USD every time.

Trading fees structure

- Free trades are limited: monthly 3 and 8 at Standard and Premium accounts, respectively. Metal accounts provide unlimited free trades. After you pass the limit, there is a £1 fee per trade.
- Custody fee is 0.01% per annum of your portfolio value
- No currency conversion during trades, because there is only a USD account.

Non-trading fees structure

- No account fee for Standard account, but there is a £6.99 and £12.99 monthly fee for Premium and Metal accounts, respectively.
- No deposit and withdrawal fee charged by Revolut
- As you can use only USD accounts, you have to convert your funds every time you deposit or withdraw. Revolut exchanges your funds at interbank rate on the weekdays, but exchange at spot + 0.5% rate on the weekends.
- No inactivity fee

Trading 212 fees

Recommended for
Traders and investors, focusing on the US and UK market, preferring an advanced but a bit complex platform.
Fees insights

Pros: Trading 212 has competitive trading and non-trading fees, e.g. no commission, custody fee, deposit/withdrawal, or inactivity fee is charged.

Cons: You can’t hold a multi currency account, therefore, there will be a currency conversion if you have a GBP account and trade with US stocks. Trading 212 doesn’t mark-up the exchange rate for currency conversion, spread is the only cost at currency conversions.

Trading fees structure

- No commission
- No custody fee
- Currency conversion is executed on spot rate
- Stamp duty for UK stocks paid

Non-trading fees structure

- No account fee
- No deposit and withdrawal fee
- No inactivity fee

AJ Bell Youinvest fees

Recommended for
Investors focusing on the UK, investing in stock / ETF / mutual funds.
Fees insights

Pros: The non-trading fees are competitive, there is no account fee or deposit/withdrawal fees.

Cons: The trading fees are not competitive. The commission is and currency conversion fee for trading with US stocks is high. There is an annual custody fee, which can be a significant cost for portfolios with high market value.

 

Trading fees structure

- Commission is based on the number of trades in the previous month:

  • 0-9 trades: £9.95 per trade
  • 10 or more trades: £4.95 per trade

- Custody fee is 0.25% of the value of the shares per annum, maximum £7.50 per quarter
- Currency conversion is depending on the amount you exchange:

  • First £10,000: 1.00%
  • Next £10,000: 0.75%
  • Next £10,000: 0.50%
  • Over £30,000: 0.25%

Stamp duty for UK stocks paid

Non-trading fees structure

- No account fee
- No deposit and withdrawal fee
- No inactivity fee

Hargreaves Lansdown fees

Recommended for
Investors focusing on the UK, investing in stock / ETF / mutual funds, and preferring an intuitive platform.
Fees insights

Pros: The non-trading fees are competitive, there is no account fee or deposit/withdrawal fees. There is also no custody fee.The trading fees are not competitive.

Cons: The commission is the highest among brokers we selected. The currency conversion fee for trading with US stocks is really high as well.

Trading fees structure

- Commission based on the number of trades in the previous month:

  • 0-9 trades: £11.95 per trade
  • 10 -19 deal: £8.95 per trade
  • 20 or more deals: £5.95 per trade

- No custody fee, only for ISA and SIPP accounts

  • ISA: 0.45% a year (capped at £45 a year)
  • SIPP: 0.45% a year (capped at £200 a year)

- Currency conversion is depending on the amount you exchange:

  • First £5,000: 1.00%
  • Next £5,000: 0.75%
  • Next £10,000: 0.50%
  • Over £20,000: 0.25%

Stamp duty for UK stocks paid

Non-trading fees structure

- No account fee
- No deposit and withdrawal fee
- No inactivity fee

Interactive Brokers fees

Recommended for
Traders and investors with short-term focus, preferring a wide range of products, and can cope with advanced trading platforms.
Fees insights

Pros: The trading fee is low for US stocks. You can hold multi currency accounts, therefore, there is no currency conversion when you have GBP account and trade with US stocks. There is also no custody fee.

Cons: The commission for UK stocks and the inactivity fee are high. There is also a high fee for the second or more withdrawals per month.

Trading fees structure

- Commission:

  • UK stock: fixed £6 for trade value less than £50,000, but £6 + 0.05% of trade value for trade value more than £50,000
  • US stock: $0.005 per share, min. $1, max. 1% of trade value

- No custody fee
- No currency conversion fee
- Stamp duty for UK stocks paid

Non-trading fees structure

- No account fee
- No deposit fee
- First withdrawal is free, then $10 per withdrawal
- $10 per month inactivity fee if you don't generate minimum $10 in commissions

Interactive Investor fees

Recommended for
Investors focusing on the UK and US markets, investing in stock / ETF / mutual funds.
Fees insights

Pros: You can hold multi currency accounts, therefore, there is no currency conversion when you have GBP account and trade with US stocks. It’s also great that there are free stock / fund trades depending on the service plan you choose. There is also no fee for deposit, withdrawal, and inactivity.

Cons: The trading fees are not competitive. The commission is relatively high (higher than Interactive Brokers and free trading brokers, but lower than AJ or HL). There is also a monthly account fee depending on the service plan you choose.

Trading fees structure

- Commission based on the service plan you choose:

  • Investor and Funds Fan: UK and US stocks cost £7.99 per trade
  • Super Investor: UK stocks cost £3.99 per trade; US stocks cost £4.99 per trade

- Also, there is monthly free trades

  • Investor: 1 free trade per month
  • Funs Fan: 2 free funds trade per month
  • Super Investor: 2 UK free trades per month

- No custody fee
- No currency conversion fee
- Stamp duty for UK stocks paid

Non-trading fees structure

- Account fee depends on the service plan you choose:

  • Investor: £7.99 per month
  • Funds Fan: £13.99 per month
  • Super Investor: £19.99 per month

- No deposit and withdrawal fee
- No inactivity fee

Author of this article

Gergely Korpos

Author of this article

Gergely is the co-founder and CPO of Brokerchooser. His aim is to make personal investing crystal clear for everybody. Gergely has 10 years of experience in the financial markets. He concluded thousands of trades as a commodity trader and equity portfolio manager.

Gergely Korpos

Co-founder, CPO

Gergely is the co-founder and CPO of Brokerchooser. His aim is to make personal investing crystal clear for everybody. Gergely has 10 years of experience in the financial markets. He concluded thousands of trades as a commodity trader and equity portfolio manager.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology

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