Investment Platform

AndyGFLees

Hi.
I am looking to start buying shares to try and benefit from compound interest in dividend re-investing. There are many web based investment platforms available at the moment but I am still unable to find a single one that meets all of my requirements. I know that some, like Robinhood, are not available in the UK yet but, to save me time searching through each and every one, can anyone recommend one that meets all of the following criteria:

• Commission Free
• Fractional Share Buying
• Automatic Dividend Re-investing
• GBP & EUR purchases
• Mobile & PC platform

Many thanks,

Alexland

Any reputable platform will want to charge you some money to provide their services so they can pay their staff and recover their IT investment. If they are not directly charging you then you have to wonder how they are making their money (eg from the bid offer spread). Personally I prefer clear reasonable charges that are easily compared.

If you just want to accumulate money over time from capital growth and dividend reinvestment during the ups and downs of the market you could get a low cost tracker or multi asset (for less volatility) fund for which in the UK it is possible to invest small amounts for a total platform and fund fee of under 0.4% pa which is only £4 per £1000 invested.

Alternatively there are some S&S ISA providers on TopCashBack (eg L&G) where the signup bonus is enough to pay for several years of fees on a modest account balance. Once the account balance gets big enough you can hold large investments for very reasonable fixed account fees on some platforms which work out as ultra tiny percentages.

Thrugelmir

Fractional share buying. That's an interesting concept. Must be a very expensive share that you are considering buying. 
All brokers will allow you to buy overseas shares. I hold EU , Swiss and US directly in my portfolio. Though they need to be traded on the LSE if you wish to avoid high charges. 

bowlhead99

So you hst AndyGFLees said:

Hi.
I am looking to start buying shares to try and benefit from compound interest in dividend re-investing.

Just buy an investment fund that accumulates its income. There are thousands and the cost of ownership is a fraction of a percent per year.

There are many web based investment platforms available at the moment but I am still unable to find a single one that meets all of my requirements.

That's because your requirements are quite radical, as you want them to give you a service where they do things for you without you needing to pay commissions on placing orders.

If you don't want to pay them any money to place orders to purchase shares in a regulated trading venue such as a stock market; settle the cost of such purchase or sale using a variety of currencies; process and reinvest the income arising from the shares to buy more shares on the exchange, again without commissions, even if the dividend isn't enough to buy a new share; hold the shares in safe custody indefinitely and deal with corporate actions, while maintaining a sub-ledger in which they allow you to be a fractional beneficial owner of a share alongside others, and letting you sell your piece even if the other holders don't want to sell theirs; create and maintain the technology and infrastructure to facilitate secure order placing, account and portfolio reporting etc, run a compliance function to protect against regulatory and other risks etc etc blah blah blah. 

If you want it all without paying commissions it is a big ask. You could find some brokers that charge you a fixed monthly or annual fee and then give you a certain amount of trade credit per month so you don't need to add new money for fees every time you buy something (e.g. interactive investor) but their effective cost is higher than many others, depending on trade size. If you use people who don't charge incremental fees for the work involved in placing and settling trades, you should be aware that their business model may not be profitable and having your broker go bust  or migrate its customers elsewhere has the potential to be quite frustrating. Especially if they offer fractional shares because the company in which you have invested will not recognise tens of people as being the owner of a single share, so it is hard to transfer your holdings to a 'real' broker when you want to move, or need to move.

An example of someone offering cheap and fractional dealing on a limited set of stocks in multiple currencies is eToro. The explicit commission appears low, but that's just because they will give you worse buying or selling prices on (e.g.) CFDs to make money in the middle of the trade. There are gimmicks such as 'copy trading', and an app. Millennials like it. Serious investors look for proven business models, but it is nice for us that they and other new fintech entrants to the market will come along from time to time, offering something for nothing, as it puts downward pressure on fees at the mainstream brokers.

AndyGFLees

Thanks for everyone's comprehensive replies but maybe I was being to vague in my question. Essentially, I understand the mechanics of investing in these instruments but I want to use an application like M1 Finance, Robinhood or Webull and I have not found one yet that meets all of the following criteria:

• Commission Free
• Fractional Share Buying
• Automatic Dividend Re-investing
• GBP & EUR purchases
• Mobile & PC platform

Many thanks,

bowlhead99

AndyGFLees said:

Thanks for everyone's comprehensive replies but maybe I was being to vague in my question. Many thanks,

No, you were being quite specific in your question, that you wanted a laundry list of services (fractional share buying and custody, auto dividend reinvest, multicurrency purchases, app and PC technology platform etc) and you didn't want to pay any commission for the trades that you wanted them to execute for you. You were not able to find any providers that would offer that, because your expectations are unrealistic.

This is a popular forum so I am sure if someone is using such a service and expects them to be in business for the forseeable future, they'll post it here. The fact that instead of getting pointers to lots of providers meeting your criteria, the responses over two days were simply to offer alternative solutions, might be taken as an indication that you are looking for something that isn't currently in the market, for good reason. 

In recent weeks, global stock markets have reminded us that that equities can be very volatile and so consumers have become all too aware that buying small fractions of shares over short time periods is not a one way street to make a lot of money. So one can imagine that new service providers are unlikely to be thinking that now is the best time to launch commission free services trying to build up a UK customer base from nothing. Investment platforms with alternative revenue models which don't charge customers for placing trades will be losing even more money in an economic downturn than the money they were losing when times were rosier.

Alexland

Sorry to hijack this thread but I am after:

• A unicorn
• Must be magical
• For no charge
• Just like my dreams

eskbanker

Alexland said:

Sorry to hijack this thread but I am after:

• A unicorn
• Must be magical
• For no charge
• Just like my dreams

....and some sunlit uplands for it to roam on?

AndyGFLees

Thrugelmir - Thanks for the advice . Yes, as for the large priced shares, I would be considering the likes of Tesla, Citrix and Cisco.
Alexland, bowlhead99 - Thanks for nothing ,you two. I quote direct from the 3 sites I mentioned:

• Robinhood - "Robinhood, a pioneer of commission-free investing"
• M1 Finance - "We do not charge any commissions or markups on trades"
• Webull - "0 Commissions and no deposit minimums."

Obviously they make their money from somewhere, probably interest on deposits, but not on trades.
Perhaps you are just a pair of "older gentlemen"  and out of touch with modern tech. So, if you cannot bring anything to the party (my question was "can anyone recommend one that meets all of the following criteria...") you should have just ignored the question, or even just said "no". Anyway, it is getting late now and perhaps you should just be making your Horlicks and getting an early night again.

coyrls

No        

AndyGFLees