Investment Platform

Albermarle

Anyway, it is getting late now and perhaps you should just be making your Horlicks and getting an early night again

and maybe you should be getting back to your bedroom to play your new fantasy computer game ' Free Financial Services for all ( until they go out of business ) '

Alexland

Not old, never drunk Horlicks but would not have a problem if someone did. Yes go to bed early sometimes as young kids wake up crazy early even at weekends.
There is a serious point that if you are looking to invest your hard earned money then you have an interest in the platform being a viable business and that their charges are clear and reasonable.
The regulations in the UK/EU would not allow a lot of popular but misleading US business models.

AndyGFLees

Alexland, I appreciate the level headed response.
 I am aware of the regulation issue and am comforted by the fact that it is taking time for Robinhood to get the go ahead from the FCA.
On a slightly different subject, I also think that platforms like these, if properly regulated, could open up the market to younger people. In fact this is what I am trying to do on behalf of my son who is 23 and I want to encourage him to think about his future now. I am actually 62 but was lucky enough to get into Bitcoin when it was just $600, so I am sitting pretty for the moment.

tropic_of_Username019

Very cheap investing for people with modest amounts to invest is already available by e.g. buying a cheap global equities tracker with Vanguard. That is a better place to start than apparently free brokers. It's not zero-cost, but it's very low cost. And providers such as Vanguard have more sustainable business models, so are likely to stick around.

And any open-ended fund let you buy fractions of a unit. Unlike with shares, where buying fractions is an unusual service, and makes moving your investments between providers harder. And most open-ended funds have accumulation units (which automatically reinvest the dividends).

Other advantages of a global equities tracker, compared to buying individual shares, include better diversification (you can indirectly buy a piece of thousands of companies, in dozens of countries, with a single purchase) and less time wasted (because you only need to purchase units in 1 fund, not many different shares).

So I think you are just looking in the wrong place, if your aim is cost-effective investments for people with small amounts to invest. (OTOH, if you meant that younger people probably want something with a snazzy app that makes them think they're Gordon Gecko, then you may be looking in the right place, after all .)

Alexland

The apparently free brokers are not zero cost there is a cost to the customer in how they place the orders with market makers who provide them with the best incentives. The customer loses out as they are not buying at the best price available otherwise why would the market makers need to provide incentives? It's all very opaque and grubby, the customer never knows how much that transaction just cost them, and I doubt the FCA would find it acceptable. I would rather introduce my kids to paying a fair but low price for a platform whose order execution policy is in their best interests.

AndyGFLees

Tropic, just short reply from me but I have absorbed your detailed advice - many thanks.

bowlhead99

AndyGFLees said:

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.

Sure, they hope to make money sustainably from somewhere. Robinhood paid multi million dollar fines to the SEC last year because they were creaming off money for themselves from trades rather than giving customers best execution price; they are making their money by diverting or referring trades to people who will give them a kickback commission rather than getting you a better price for the stock you're trying to buy. 

The money they earn by not paying you an interest rate or by charging you for margin funding will decline given the base rates for borrowing, deposits and lending have gone through the floor. You could check other current threads in this forum to see how convenient it is when your broker goes out of business and you can't trade your stock for a year while waiting for the agency to be transferred to a new firm that is a survivor rather than going bankrupt through lack of revenue or regulatory shutdown. Hint: it's not convenient, especially when markets drop 30% and you can't sell while that happens because you don't have access to what you thought you held.

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.

Yes, perhaps we are older gentlemen and resistant to change. Or perhaps we are investment professionals who know a !!!!load about running regulated financial services businesses in multiple jurisdictions, having directed them and sat on working groups for industry bodies that direct best practice on valuation theory and investment fund reporting. I mean, we're all anonymous here, so we could be anyone. 

Though I know which of those two brackets I fall into, and have made over ten thousand posts here to share my business knowledge and investment experience for free. You don't need to appreciate it, and if you think an explanation of why you will struggle to find what you want is not helpful to the matter at hand, then feel free to ignore it.

Saying that you can't find anyone who gives you what you want, while offering examples of companies that don't offer you what you want here in the UK - and demanding that people GTFO if they can't give you what you want - is not likely to endear you to the forum community.

As you suggest, we could have just said 'no', but if we had given you a simple 'no', you'd inevitably have asked why we were contributing to the thread just to give you the answer that we didn't know what provider you should use, which was the question you had posed - and you would have told us to go back to our Horlicks.

Perhaps others will take over the mantle of trying to help you out, educate or entertain you.  Good luck with it.

Thrugelmir

Business models such as HL and AJ Bell are partly built on customer deposits. Leaving cash on overnight deposit. Though a dropping base rate will reduce net income generated. Shares I purchased yesterday the 27th aren't due for settlement until the 31st. Brokers sit on this cash during the intervening period. 
The zero cost retail  brokers with little other source of income may find themselves seriously squeezed.  

AndyGFLees

Thanks all for your feedback.