What is an investment platform?
An investment platform, sometimes called a fund supermarket, allows investors to buy and hold a range of investments in one place online, and sometimes with a smartphone app.
The crucial point is that investment platforms are designed for people who are making their own investment decisions. This is referred to as ‘execution only’.
Please note: this article is for information purposes only and does not constitute financial or investment advice.
- Find out more: best investment platforms in the UK
What does ‘execution only’ mean?
While the platform might provide useful guides and data, you’re wholly responsible for selecting and buying investment products.
You’ll therefore need to know your investment goals and understand your risk appetite.
The Financial Conduct Authority describes ‘execution only’ as a ‘transaction executed by a firm upon the specific instructions of a client where the firm doesn’t give advice on investments relating to the merits of the transaction and in relation to which the rules on assessment of appropriateness do not apply’.
What is a ‘do-it-for-me’ or ‘robo-adviser’ platform?
Do-it-for-me platforms, sometimes referred to as robo-advisers, offer a halfway house between investment platforms and traditional financial advice.
Most ask you for your investment aims and assess your attitude to risk through a questionnaire. It then recommends a tailored portfolio of funds, gilts and bonds.
While you generally can’t specify the exact investments you want to hold, many platforms offer themed portfolios – for example, ethical investments or investments in technology.
What investments can I buy on a platform?
Some investment platforms only offer investment funds.
But many others also offer access to stock-exchange-listed investments, such as shares, investment trusts and exchange-traded funds (ETFs), as well as bonds and other investments.
Make sure you know what’s on offer before opening an account – read our reviews of the best investment platforms in the UK 2025.
Which Isas do investment platforms provide?
As well as offering access to funds and other investments, investment platforms allow you to put your investments inside one or more of these tax-efficient wrappers:
Within these wrappers, dividend income is untaxed, even if it exceeds the annual dividend allowance (£500). Dividends in an Isa or Sipp don’t count towards your tax-free dividend allowance.
Interest from corporate bonds and gilts, and from funds that invest in these assets, is tax-free. There’s no capital gains tax on any investment profits within either Isas or Sipps, and your profits don’t count towards your tax-free capital gains allowance.
Outside of these tax-efficient accounts, you can also hold a general investment account, which is useful if you’ve used up your Isa allowances.
If you’re planning your retirement, most investment platforms allow you to manage your pension in an income drawdown plan or buy an annuity
What else do investment platforms offer?
Customer service and price should be paramount when comparing investment platforms.
But it’s also worth looking at the following:
- Investment news Some platforms publish daily updates on investments online and in newsletters, often with expert commentary thrown in. Some now have their own videos and podcasts. While this can be useful, avoid making snap judgments and focus on your long-term investment goals.
- Research tools Look out for smart lists of funds and shares that can be filtered in a way that suits you. Some platforms may use ratings from Morningstar and other data providers – make sure you understand what these ratings indicate before relying on them too heavily.
- Blended/portfolio funds Many platforms offer blended/portfolio funds – essentially funds that are made up of other funds. They’re useful if you know your appetite for risk but don’t want to pick individual funds yourself. Blended funds are usually aimed at a specific risk appetite.
- Recommended fund lists Most platforms employ analysts to put together lists of recommended, or ‘favourite’ funds. Be cautious when using recommended fund lists, as they’re not tailored to your risk appetite or goals.
What will I be charged for using an investment platform?
When investing through an investment platform, the charges displayed by a fund manager aren’t the only ones to consider.
Investment platforms charge account or service fees, which come in two forms: fixed fees and percentage fees.
Percentage fees
This is when platforms take a fee as a percentage of the value of the investments you hold. Many platforms reduce this fee for larger portfolios.
So, you might be charged 0.5% on the first £100,000, then 0.3% on the next £150,000. Others will stop charging fees for investments over a certain threshold.
Percentage fee structures will best suit investors with £25,000 or less, although it’s worth checking because some of the lowest percentage charges will also be good value for portfolios worth more.
Fixed fees
Some brokers levy fixed annual or monthly fees in pounds and pence.
Fixed fees are usually better suited to investors with £50,000 or more in their portfolios, as they usually work out cheaper than percentage fees.
Transaction fees
You might be charged each time you buy and sell a share, investment trust or exchange-traded fund.
Less common are fees for buying and selling traditional funds.
Many platforms that charge transaction fees will provide discounts for frequent trading, or offer free trades in exchange for paying a higher annual fee.
No-fee platforms
One of the most significant changes to the stocks and shares Isa market is that you can now find platforms that charge no account or trading fees and instead make their money in other ways.
This could be through foreign exchange fees or keeping cash interest, though few will get enough money to survive from these alone.
Or it can be about getting customers in the door with the intention of upgrading them to paid products, such as managed portfolios or premium tiers that give access to more investments. This strategy can have far more serious implications if the paid product in question is a contract for difference (CFD), which is a very high-risk investment in which most investors lose their money, and you can even lose more money than you put in.
InvestEngine is a Which? Recommended Provider with a no-fee model, while Freetrade, another no-fee platform, received our Great Value endorsement.
Foreign exchange fees
Transactions on international shares and funds will incur foreign exchange fees, and these will vary by platform – we found they ranged from 0.45% to 1.5% on amounts up to £5,000.
Some platforms offered lower rates for bigger trades.
Exit fees
You might be charged if you transfer investments from one platform to another.
However, many platforms have scrapped these fees, while others will offer to cover switching fees as an incentive to join them.
If you have a large portfolio, you might find that your ongoing savings from lower fees eclipse the switching fees you’ll need to pay.