Any advice on which investment app to choose?

EverythingCounts

Hello all

Over the last few months I’ve been doing lots of reading about investing to try and get a basic understanding of things. I’m now at a point where I’m about to open a Stocks & Shares ISA and start investing some money.

Having looked at the websites of various investment apps I’ve narrowed it down to Vanguard, Trading 212 and AJ Bell.

I like the look of Vanguard, it’s well presented and I found it the easiest to navigate and understand, they also appear to have low fees. I understand that they only offer Vanguard funds but I’m only looking for a global index tracker.

I wasn’t so keen on the look of Trading 212 however they have very low, in some cases no fees if I’ve understood correctly and plenty of fund options. I did think could I get a Vanguard fund through them cheaper.

I like the look and feel of AJ Bells site and again found it easy to use but the fees look a little higher.

Does anyone have any practical advice they can offer from using these apps? Is there anything else I should look out for? Has anyone had any issues transferring in or out using these apps, are any better than others?

As I’m just starting out I want to keep it simple and go for a global index tracker, as I’m in the UK do I need to look out for anything currency wise or pick a specific type? And is an ETF a better option than a fund, or is there little difference when it comes to cost or anything else?

Thanks in advance.

Exodi

If you're just starting out with investing and opening a S&S ISA, note that last year Vanguard introduced minimum fees of £4 per month for account balances under £32,000, on top of their 0.15% platform fee.

This means an account with £1,000 would pay an effective annual fee of 4.95%. Certainly something to be aware of if starting out. As you also say, they limit the options to their funds only, which are very good, but not always the best.

Note this might not apply if you had another account (e.g. a Personal Pension or GIA) with them, as it's based on your total Vanguard balance, across the accounts.

Trading 212 charges no fees in most cases, and is also limited in the sense it only offers ETF's - however much more variety than Vanguard. In terms of global index trackers like you've mentioned, there are several strong options, e.g. VWRP (Vanguard), FWRG (Invesco) and ACWI (SPDR). ACWI recently significantly dropped their fee so I think it's probably the best global index fund on Trading 212, but tracks a different index (MSCI vs FTSE) and has less holdings so could be argued as slightly less diversified.

Usually the biggest complaint about Trading 212 I see is the gamification of parts of the app. If you stick to principles and invest sensibly, Trading 212 is likely the best option.

AJ Bell (or more specifically Dodl I suppose) levies a 0.15% platform fee and in contrast to Trading 212, tends to offer mainly OEIC mutual funds, with only a few ETF's.

None of the options have dealing fees (well Vanguard does if you opt for the live trade service on ETF's, Trading 212 also offers this for free). I think the only way to incur cost on Trading 212 is to buy non-GBP denominated assets. This shouldn't apply to you as you should only be looking at GBP denominated index funds.

Rollinghome

As the name suggests, ETFs (Exchange Traded Funds) are traded on the stock exchange like shares. That means they can be bought and sold at any time the London Stock Exchange is open. The transaction is normally instant, and you know, again normally, the price you will pay before you trade. There can be a small spread between the buying and selling price. ETFs are likely to be registered in Ireland or Luxembourg which avoids paying UK stamp duty.

Funds are bought and sold from the fund manager through a platform for a "forward" price that is typically calculated once a day at midday. You may have to place your order the night before or first thing in the morning to get the next pricing point. So you won't know the price in advance. If you are content with that then they are the most straight-forward.

In practical terms there is not much other difference between them, but depending on the platform there may be differences in trading fees. Many platforms will let you trade funds for free or for less than ETFs. Some have a cap on ETF platform charges but not on funds. Unusually, Scottish Widows have the same trading fee for shares, ETFs and funds, and no platform charge.

The best platform for you will depend on how often you trade, for how much, the size of your portfolio etc. There's a free, easy to follow guide that might be of interest here: https://www.which.co.uk/money/investing/investment-platforms-and-fund-supermarkets/best-investment-platforms/best-and-worst-investment-platforms-a2Rra4r9bgT8

Albermarle

Be aware there are providers who have a full website, but have an app as well

Plus there are a few providers who are app only.

EverythingCounts

https://forums.moneysavingexpert.com/discussion/comment/81987626#Comment_81987626

Thank you for the detailed response.

I have read comments about the Trading 212 apps gamified approach and the notifications aimed at getting you to trade, but I guess you can switch that off and ignore it.

I need to narrow it down to a few index funds and then compare, although is there a huge difference in the big index tracker funds, I assume they are generally tracking the same thing? I get that you can choose to include/exclude small caps and other options.

EverythingCounts

https://forums.moneysavingexpert.com/discussion/comment/81987649#Comment_81987649

Thanks for the response, very useful.

I will make a note of the fees for both ETFs and funds. I don’t plan trade often, although I will be buying every month hopefully with what I can afford each month, so it will be an ongoing monthly thing, so I guess I am buying regularly which will incur fees.

And thanks for the link.

InvesterJones

https://forums.moneysavingexpert.com/discussion/comment/81987788#Comment_81987788

Regular investing is free with Scottish windows share dealing, and no platform fee to hold either funds or ETFs, so just the £5 to sell when the time comes.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81987774#Comment_81987774

The differences between global index trackers is not that much, neither is whether they are an ETF or a fund. Much more of a decision is whether to invest in 100% equity, or not. Probably a good decision if you have a long term view ( >10 years), and can live with periods where it could drop dramatically.

You do not mention your age or your objectives, but if you are investing for retirement, a pension is the usual go to, due to the tax benefits.

friolento

Any reason why you discarded Freetrade (owned by IG)?

EverythingCounts

https://forums.moneysavingexpert.com/discussion/comment/81987963#Comment_81987963

No reason, I just didn’t look at them, but I will now.

I’m assuming you rate them?

EverythingCounts

https://forums.moneysavingexpert.com/discussion/comment/81987847#Comment_81987847

I will turn 55 in a few months and I have a work pension pot of about £500,000 which I’m still contributing towards. I plan to continue working for another 2 or 3 years, not quite sure how I will take my pension yet, possibly a split between annuity and drawdown.

So whilst I’m still working I want to build up a S&S ISA over the next few years, I’m hoping I can put around £1000 a month in so hopefully build a reasonable pot in that time. Due to pension and other savings I should be able to leave the S&S ISA for potentially 5 or 10 years, I might have the choice of when to take from it so happy to put it into an index tracker.