Best Investment Trading Apps – Forbes Advisor UK - Forbes

Until recently, the idea of managing your stocks and shares from your mobile device – in effect, having a dealing room in your pocket – would have seemed a fanciful notion. 

But today's smartphones are making this a reality. Private investors are increasingly using trading apps, not just to execute the occasional stock transaction, but to run entire investment portfolios.

Whether you're new to buying shares or a seasoned stock market investor, here's a look at the rise in trading apps and how to choose one to suit your needs.

Getting started

For those looking to invest via the stock market, the days of "calling one's broker" are long gone. 

Most investors who want to buy and sell shares, build a portfolio of investment funds or trade sophisticated instruments such as 'contracts for difference' now do so through an online dealing account.

Over the past two decades, investment platforms representing some of the biggest names in stockbroking and fund management have catered for this need, mainly with services aimed at a desktop or laptop-orientated customer base.

In the past couple of years, however, there has been a noticeable shift from desktop to mobile trading by private investors. 

Two factors have helped accelerate this phenomenon. First, the evolution of increasingly powerful smartphones, and second, the rise in the number of share trading apps.

The figures are significant. According to analysts App Radar, there were an estimated 3.1 million Android downloads of the top 10 UK investment apps via Google Play Store in 2020/21. 

App Radar doesn't record iOS figures, which account for Apple users. But it says the split between Android and iOS downloads is about 50/50. Taking this into account, App Radar estimates that, overall, there are now around nine million people using trading apps in the UK.

Rise of apps

Some of the newest investment trading services, offered by 'neo-brokers', are only available via a mobile app.

To keep pace, providers of traditional, desktop investment platforms have developed their own trading apps for customers to use.

The largest traditional UK platform, Hargreaves Lansdown, says its app had nearly 700,000 users at the end of 2021. It says more than a quarter of a million clients use its app daily. 

One of its rivals, AJ Bell, announced last November the 2022 launch of Dodl, an app aimed at younger customers. One of Dodl's key features is that it will allow investors to buy shares 'commission-free'.

Commission-free trading has become a major selling point for trading apps that rely on other fees to make their money. See below for more information about trading charges in general. 

Charges, however, should not be an investment app user's sole focus.

Which trading app should I pick?

Keeping the amount that you pay to trade and invest  to a minimum will end up boosting the returns made by your underlying investments. 

But, as with so many decisions to do with our finances, when it comes to choosing a trading app, there's no clear-cut choice that will suit everyone. Much of the decision will depend on what you are looking for from a service. 

Aside from charges, there are a number of other considerations you need to bear in mind to get the most out of your trading app experience. These include:

• How user-friendly do you find the app?
• What investments do you want to trade? Shares, funds, or more sophisticated investments?
• If you're new to investing, does the app allow you to practise trading or trade virtually before taking the plunge?
• Aside from trading costs, what other admin charges does the app impose?
• Is there a minimum investment?
• Can you use the app to trade tax-efficiently through a stocks and shares ISA?
• Is your app regulated by the UK's Financial Conduct Authority (FCA)?
• Are there any extra benefits/rewards?

Trading apps for various scenarios

The trading app market is getting crowded. Here is a selection of apps that cover a range of scenarios, from novices to more sophisticated investors.

1) eToro – good for beginners and social

eToro describes itself as a "bridge between the old world of investing and the new" and claims to be "the only place where investors can hold traditional assets, such as stocks and commodities, alongside 'new' assets such as the cryptocurrency Bitcoin".

The app offers a decent mobile experience and, along with several of its rivals, provides the added appeal of zero-commission trades.

eToro also allows users to follow and even copy the trades of legitimate investors with proven track records. FCA regulated.

2) Freetrade – good for easy investing and guides

Freetrade's basic service offers commission-free trading and provides access to large and mid-cap stocks in both the UK and US, as well as initial public offers (IPOs) and special purpose acquisition companies (SPACs). 

It also provides limited access to a range of companies listed on the German and Finnish markets. 

Freetrade Plus costs users £9.99 per month but offers considerably wider investment choice including all other London-listed shares as well as access to all other European shares. FCA regulated.

3) Fidelity Personal Investing – good for funds

Fidelity enables investors to choose from over 2,500 funds, as well as shares from the FTSE 100, FTSE 250, FTSE All-Share and FTSE AIM 100. Other available investments include investment trusts, exchange-traded funds (ETFs) and some Irish shares. 

The service allows a user to link family members' accounts to see everything in one place, while a Watchlist tracks the performance of up to 50 investments at any one time. FCA regulated.

4) Trading212 – good for practising trades using virtual money

Trading 212 offers unlimited commission-free trades with access to over 10,000 stocks and ETFs from the UK, US, Germany, France, Spain, Netherlands and other markets. 

For those looking for more sophisticated investments, Trading 212 also offers over 3,000 contracts for difference (CFDs) on stocks, forex, gold, oil and indices. 

Users can start with a free, lifetime practice account that uses virtual money. FCA regulated.

5) IG – good for more experienced investors

IG allows users to trade on more than 17,000 global markets, including shares, indices, options and commodities. 

It features interactive charts, news, automatic trading alerts and real-time signals. Users can spread bet or trade CFDs on commodities, and options trading is available on various assets timed daily, weekly and monthly. FCA regulated.

Trading costs

The investment space is cluttered with variable fees and charges from one provider to another, so it can be a complicated business for investors – whether app-based or desktop-based – to work out what they will actually pay.

When it comes to buying and selling shares, some providers impose a flat fee per trade. Others structure their charges to benefit users who trade the markets more frequently. 

Users may also find themselves billed according to the size of their investment. Accounts provided by longer-standing platform providers often come with a monthly subscription or admin fee.

If you're planning on buying overseas shares – for example, you fancy gaining exposure to US tech stocks priced in dollars – then you'll probably be charged a currency fee for doing so. 

Meanwhile, if you're an infrequent trader – say you take a year between trades – your account might be hit with 'inactivity' charges.  

Several app providers promote their 'commission-free' trading status. It's a welcome and increasingly popular option across the investing space. But bear in mind that, just because trades are free from commissions, it doesn't necessarily follow that your account will be totally devoid of charges.

Brokers make their money in other ways, such as withdrawal fees and charges for currency conversion.

Before signing up to a particular investing app, work out what sort of investor you plan to be. Having an idea of how much you're going to invest, how often you plan to trade, and which markets will be your primary focus can help determine the best and most cost-effective app for your needs.

If sheltering your investments from tax is a primary concern, make sure your provider has the scope to offer a stocks and shares ISA – a wrapper that allows an annual allowance of £20,000 of shares and funds to grow tax-free.

Beware 'indiscriminate' trading

Two of the main attractions of investing via an app are the ability to trade quickly and, assuming you choose the right provider, at little or no cost. 

On the face of it, this sounds like a winning combination with the potential for enhanced investment returns on your portfolio. However, research from a team at Frankfurt's Leibniz Institute says that it's still important to tread warily, even when you've got the investing power of a small dealing room sitting in the palm of your hand.

The academics suggest a move to app-based trading can do investors more financial harm than good if they're not careful.

The researchers tracked the transaction of 15,000 customers of two large German retail banks over several years. They discovered that, when people placed trades via a mobile app, they were 8% more likely to buy "riskier lottery-type stocks" than when they bought via a computer.

Deals placed via apps were also 12% more likely to be for "past winner" stocks, in other words, those that had enjoyed a recent surge. The researcher concluded that "our findings caution against the indiscriminate use of smartphones as the key technology to increase access to the financial markets".