Mobile investment platforms

Locornwall

I was wondering with the likes of Freetrade or eToro, when you buy shares are they actually real shares, considering they can be fractional?

DireEmblem

Yes you are purchasing the same share, or part share as you would if you did the same through Interactive Broker or one of many others.  You are just using a different intermediary/trustee to help facilitate the trade in your name.

For the record I think eToro pay the 0.5% stamp duty for UK trades, and I have to say I am not a fan of the free trade interface.  If you are looking to use either or another, check out some of the signup offers as most offer a free share type thing.

Locornwall

That’s my next question, what’s the best platform between eToro and Freetrade?

underground99

Locornwall said:

That’s my next question, what’s the best platform between eToro and Freetrade?

If you want to invest in UK and US stocks, have your account displayed in pounds and be able to use a UK tax wrapper like an ISA, Freetrade is fine. 

If you don't want an ISA and are happy to run your account in dollars, or you want to trade on more foreign stock exchanges or take exposure to crypto or use leverage or use a social media engine to 'copy-trade' other traders, you'd choose eToro.

Locornwall

I would like to use a general account, as I’ll be investing in vanguard using an isa. I’d like to invest in us and uk shares. I may be interested in crypto at some point. So I take it etoro is the best platform?

DireEmblem

If you're using a general investment account, then there is no reason why you couldn't open multiple.  That way when you buy/sell stocks and ETFs, you can use the platform that your most comfortable with, or provides you with the most cost effective trades.

You could then write back in a couple of months/year/whatever to give your feedback to the forum on your thoughts from using each service.

maxsteam

DireEmblem said:

For the record I think eToro pay the 0.5% stamp duty for UK trades

No. If there's no stamp duty on UK trades then you are probably buying CFDs or some other instrument rather than the shares themselves.

Something to be extremely cautious of with eToro is that they offer you the option to follow other people's trades. This may sound like a good idea but it hands all your trading decisions to the platform and, in my opinion, should be avoided.

If you've not dealt in shares previously, it may be best to start by investing small amounts in large companies while you learn. I am curious why you seem to have decided against mainstream brokers. There is no simple answer to which is best. It's down to personal preference. My personal preference is to stick with mainstream brokers as much as possible.

grumiofoundation

maxsteam said:

If you've not dealt in shares previously, it may be best to start by investing small amounts in large companies while you learn. I am curious why you seem to have decided against mainstream brokers. There is no simple answer to which is best. It's down to personal preference. My personal preference is to stick with mainstream brokers as much as possible.

If investing small amounts (obviously 'small' is relative for different people) via 'mainstream' brokers you run the risk of wiping out large swathes of your profit (if any) in transaction fees. 

DireEmblem

maxsteam said:

DireEmblem said:

For the record I think eToro pay the 0.5% stamp duty for UK trades

No. If there's no stamp duty on UK trades then you are probably buying CFDs or some other instrument rather than the shares themselves.

You have misread what I said.  I did not say no stamp duty on UK stocks, but that  eToro pay the stamp duty, its on their website:

https://www.etoro.com/news-and-analysis/market-insights/stamp-duty-the-hidden-truth/

"However, there is a way to avoid this tax and still invest in the stock market. To maximise your investment, eToro absorbs the costs of stamp duty on UK stocks."

Locornwall

If you are referring to main stream brokers such as Hargreaves Lansdown, their fees are considerably more. That’s why many people are looking at the app investment platforms.

maxsteam

DireEmblem said:

You have misread what I said.  I did not say no stamp duty on UK stocks, but that  eToro pay the stamp duty, its on their website:

I suspect that that page is talking about CFDs. There's no stamp duty on CFDs. The page is not entirely clear. The language can be used to say, for example, that they are letting you use CFDs to trade stocks.

grumiofoundation said:

If investing small amounts (obviously 'small' is relative for different people) via 'mainstream' brokers you run the risk of wiping out large swathes of your profit (if any) in transaction fees. 

It depends which broker you use. I introduced my daughter to the stock market by putting £200 into a Degiro account. There are expensive mainstream brokers and there are inexpensive ones.

The main reason that I am resurrecting this post is that I recently looked at the TrustPilot reviews for eToro. I found them extremely alarming. Too many people have encountered problems when it came to making a withdrawal. Every now and then problems occur on any platform but the problems tend to get sorted out in the end. There are too many people saying that they had problems withdrawing money from eToro and not enough people saying that the problems eventually got sorted out. I personally would avoid eToro after looking at TrustPilot.

As there are comments from eToro users here, I would be interested to hear how any of their withdrawal requests went.