The best investment apps UK are a gamechanger. Whether you want to pick your own individual stocks, hold a managed portfolio or buy and sell all sorts of different asset classes, there’s an investment app in the UK for you.
I remember as a young teenager at birthdays and christmases when I would find my bank account swell suddenly to a new level. As an anxious mind and lifelong saver – not to mention slightly greedy b*stard – I always found myself questioning how I could make this last. I didn’t want this saving to be wiped out in brief shopping spree but would have held on if I could use it to increase my overall income.
A particularly ruthless friend managed to come to an arrangement with his parents that let him invest in the stock market under the age of 18 and I felt very envious – even to this day wondering what those extra years did for the investment.
This didn’t really change with my first job when my bank account grew again. Even when I turned 18 it seemed that a lot of traditional means of investing were hard to access and typically quite expensive, thus requiring a large amount to invest to make it worthwhile.
Yet just a few years later when I finished university I was struck by the number of investment apps that had sprung up on adverts on the London underground. They shared a common philosophy of reaping the rewards (and, for compliance purposes, losses) of the stock market for minimal low fees. The first were the classic robo-advisors like Nutmeg and Wealthify that use technology to manage thousands of investment accounts with minimal work, but I quickly became fixated on finding more.
With my first job out of university I knew my habitual saving would let me grow my wealth fast and so I immediately looked for the best options for investing what remained of my salary each month. One of those turned out to be startup investment platforms Crowdcube and Seedrs, which let you invest very small amounts in brand new startups.
The revelation was not so much the chance to invest in future unicorns – these platforms had hosted Brewdog, Monzo and Revolut as alumni – but the opportunity to see the very latest entries to the Fintech boom and try them out. I was an early (and very small) investor in Chip, WiseAlpha and Freetrade as some exciting finance apps. At least, I find them exciting.
As such I have grown to have a good understanding of the best investment apps in the UK and so can break down for you the kind of investment apps you may want to try out. I am no financial advisor and do not give any financial advice but instead offer my views of these investment apps from an innovation and user experience standpoint.
Types of Investment Apps
Robo-advisors are probably the best investment apps for beginners because they require very little expertise to use. While they often sound like the site of quantative trading robots big investment banks and hedge funds use, in reality they are very different. The aim is not to make hundreds of transactions in lightening speed so your robot can outwit another trader’s robot. Instead, the technology simply allows lots of portfolios to be managed in a cost-effective manner.
Robo-advisors still use portfolio managers who are responsible for investment decisions, but much of the workings of your own portfolio will be automated from this.
When you sign up to a robo-advisor you will be taken through a survey that aims to find out what your investment goals are and what your risk tolerance is. This is basically the fundamental rule of investing and will determine much of your financial future. Humans typically overestimate their risk tolerance so be sure to answer these questions as truthfully as you can. From these answers you will be recommended a risk level and an indication of the kind of results you might be able to achieve, tested against positive and negative scenarios.
The important thing about a robo-advisor is once you have made your choices, sit back and let your portfolio work over years and years. Set up a direct debit so you contribute every month without even thinking about it.
The real gains from the stock market are made over decades, not years. And unfortunately investment apps have gamified investment, making it as addictive to check your portfolio as it is to check instagram. This leads to stress and panic, while the small fees you pay for a robo advisor should ensure you ultimately make a stable return over the long term.
Trading apps are a little more complicated. You have stockbroking apps that let you buy and sell shares as well as other assets like oil. You also have apps that rely on Contracts For Difference or CFDs which may market themselves as traditional investment platforms but in reality are very different and dangerous.
CFDs use leverage to amplify gains and losses – meaning you borrow money from the broker when making your trades to multiply your investment many times. If you win then you win bigger tha n you would with your own money. But if you lose, it hurts much, much more. You can tell a CFD trader because by law they are required to state in advertising how many accounts lost money in a given year – it’s normally about 70 – 80%.
On the other hand, proper stockbroking apps in the UK are a great way to invest at low cost that allow you to build your own portfolio. This was a natural move for me because I found robo-advisors too hands-off and wanted more control over my investments.
When we talk about investments we generally mean stocks and shares. However, there are apps out there for all sorts of other investments which carry their own risks and potential rewards. I’ve mentioned a few such as Crowdcube for startup investments and Coinbase for cryptocurrency but make sure to approach these complex approaches with extreme caution.
Best Investment Apps UK
I’m a huge fan of Freetrade, so much so that I invested in them on Crowdcube and wsa interviewed by the Financial Times about them. I love the irony that I invest with them as I hold my portfolio with them while I also own shares in Freetrade itself as a company. But enough of that boasting.
When Freetrade came to market no one was really offering share dealing for a reasonable price. You had robo-advisors that choose your investments for you. You had CFD traders letting you “buy shares” when actually they were ripping you off with fees for holding trades overnight and other complex trading processes. And you had traditional stockbrokers like Hargreaves Lansdown charging £10+ to buy a share, £10+ to sell it and an ongoing percentage fee of your portfolio value.
Freetrade offers share dealing that really is absolutely free. Robinhood in the US had been doing this very successfully from its Silicon Valley home but there was nothing like it in the UK until Freetrade.
You can buy a huge range of single stocks from around the world as well as Exchange Traded Funds – diversified baskets of hundreds of shares you can buy for just a small amount.
How do they make money? They make interest on the cash held in thousands of accounts – which may sound shady but is common practice. They charge £3 a month for an ISA and have recently brought out Freetrade Plus for £9.99 a month which offers additional stocks, limit orders, increased support and the ISA included.
As an early adopter and investor at Freetrade I’ve been to many of their events and met their core staff. They have an inspiring mission that aims to disrupt both expensive old stockbroking platforms and CFD providers and make investing in the stock market accessible and affordable to everyone.
Nutmeg was one of the first big robo-advisors and with 75,000 customers it is now the largest digital wealth manager in the UK.
As with most of the robo advisors on this page, Nutmeg will split your investment across a diversified range of investments. So whether you are investing with £100 or £100,000 you will always have a broad portfolio that you don’t need to worry about.
Nutmeg also offer a Lifetime ISA which is quite rare among investment apps as this was one feature that led to me create an account with Hargreaves Lansdown.
Wealthify was my first robo-advisor and I still have an ISA with them from when I started. They have a beautiful design and accessible dashboard that clearly shows what you’re invested in and how you’re performing. I also enjoy getting emails when there’s been volatility in the market – such as Brexit jitters or Coronavirus – and they have made some changes to my portfolio to account for some of that risk. As a young investor there was also some comfort in knowing that Wealthify is backed by the insurance giant Aviva.
Despite being 20 years old Interactive Investor is a pretty innovative investment app, at least before the most recent wave of free investing platforms like Freetrade and Trading212 Invest. They offer a flat monthly fee of £9.99, as opposed to the ongoing percentage charged by a lot of traditional brokers like Hargreaves Lansdown.
That means fees don’t grow in proportion to the portfolio. For that reason they are better suited to larger portfolios than small ones, although even small investors should be considering what their portfolio will look like in 20 years’ time.
They also charge a fee for trades of £7.99 but you do get a free credit each month for your subscription fee, plus if you set up regular investing then that is also free.
Overall Interactive Investor is a friendly middle between totally free best UK investment apps and more traditional investment portfolio providers.
Hargreaves Lansdown is a well established UK investment platform that represents all that is good and bad about such traditional players. Their investment app is a little clunky but you do have access to a wide range of investments, including investment funds with which HL have often negotiated discounts on fees. Most funds you can actually buy and sell for free, but individual stocks and other assets incur a costly transaction fee every time you buy or sell them.
Hargreaves Lansdown also charge an ongoing fee for holding your portfolio with them.
While they may be old and expensive, Hargreaves Lansdown is certainly broad. For instance, there were very few providers I could find who could give me a Stocks and Shares Lifetime ISA. At the time it was only Hargreaves Lansdown, AJ Bell and Nutmeg that could provide this service.
They also have a very comprehensive universe of assets to buy and sell.
Crowdcube and Seedrs
Crowdcube is an interesting form of investment app as it is for startup investing. This is a very different process compared to a trading app and investing in publicly listed shares.
Startups appear on the platform and pitch for your investment. In return you receive equity – shares in the company which are illiquid until the company is either bought out, goes public in an IPO or buys back shares themselves. As such you should expect to say goodbye to your money and any future returns for about ten years.
What’s more is that startup investing is extremely high risk. Nine out of ten new businesses fail. The game with most startup investing and venture capital is to try and score one or two mega-successes that will make up for all your losses. Frankly, equity crowdfunding systems like Crowdcube and Seedrs are so new it is difficult to establish how effective they are.
Some argue that startups only go to a crowdfunding platform if they have been rejected by VC firms. What’s more is Crowdcube and Seedrs essentially work by getting lots of low-level investors involved, while traditional “angel” investing tends to focus on a group of people who are skills of benefit to the company and will invest upwards of £25,000. As such they typically rely on a lot of “buzz” and incentivise investors with perks like freebies from the company they invest in.
There are plenty of reasons not to trust Crowdcube. But then why have I used it consistently to invest in a number of startups? Personally I love the democratisation of venture capital and am very proud of the companies I have invested in despite the slim chance of a successful exit. I have never invested more than a small amount to me and best of all, they hold regular events in London where despite my small investments I have been able to network with very inspiring people and startups over drinks and canapes.
Crowdcube startups also benefit from the UK Governments Enterprise Investment Scheme which means you can claim back up to 30% of your investment through a tax rebate. Plus there are some very generous tax perks if you do eventually make a good return on an investment.
Trading 212 are historically a CFD trading platform – meaning they offer trading accounts with leverage that can result in big gains and huge losses.
However, they have now brought out Trading 212 Invest since 2017 which is a direct competitor to such investment apps as Feetrade and Hargreaves Lansdown. In fact, their offering is very compelling with a large stock universe from around the world and no fees.
It still looks very much like a trading app with graphs that focus on technical traders trying to identify patterns. This is quite apart from Freetrade that is constantly criticised for its poor graphs. But again this addresses the two different approaches to an investment app vsa trading app in focusing on long term fundamentals or short term patterns.
However, do not forget that this fundamentally a CFD provider and this is where they make the most money. If you sign up for Trading 212 Invest I would not be surprised if you find yourself targeted and tempted by their CFD offerings. Stock trading with CFDs is much closer to gambling, which not only makes it volatile but also addictive.
MoneyBox is a very popular robo advisor through its system of rounding up your small change from transactions and investing it. The idea is you can reap the rewards of investing without feeling like you have to set money aside.
Personally I’m not a fan and that’s for a number of reasons. One is that it relies on spare change and yet is also dependent on digital transactions. This seems counter-intuitive to me and is more of a tax, rounding up your £2.65 coffee to £3. You might have tossed the physical change in a bag and forgotten about it with a cash transaction but with a digital transaction that change doesn’t exist and stays safely in your account.
How this actually works is the total of all your spare change gets deducted at set intervals – so you’ll end up with a few pounds being deducted from your account in one transaction.
My other issue with it is the psychology. It promises investment returns with none of the mental work. You actually get rewarded for spending money rather than saving it. Investing should be a conscious decision.
That said, the investment app is very popular and has succeeded in getting many young people into investing and that cannot be faulted. The returns tend to be small because you will only be contributing such small amounts. However, Moneybox does overcome my issue with investment apps that they are too addictive and tempt you to time the market by separating you from so much of the investment process.
Much like Trading 212, Etoro has brought out a free investment app alongside its CFD trading platform. Again this has proved very popular but be careful should you be tempted towards Etoro’s CFDs and Forex trading products.
Etoro’s overall business model is very interesting with what it calls “social trading” where you can copy other traders automatically. In general though I have always found it overly complex and find it hard to trust. You should not be giving your investment or trading strategy over to someone who has no idea about who you are and your financial situation.
No real overview of investment apps would complete without addressing cryptocurrency. This is a very volatile and speculative type of investing that is not for the faint-hearted.
Nevertheless, Bitcoin is now more than 10 years old and worth more than a large-cap stock like Coca Cola. It is unlikely to go away any time soon while other cryptos like Litecoin continue to compete.
There are plenty of reasons to both avoid and invest in bitcoin and it is hugely divisive on that front amidst the best investors.
Personally, I lean to the more ambitious end of the scale with people who believe that if Bitcoin truly does have the potential to rocket 100x in price, then it is worth having a very small amount invested in it that you can afford to write off.
With a currency that is just blocks on a ledger it is important to have a secure means of buying and selling it, and indeed holding it although experts insist holding bitcoin requires special storage and not just an exchange.
Coinbase is one of the largest and possibly safest bitcoin exchanges in the world and has a very easy to use app. You can even earn a small bit of cryptocurrency for free with Coinbase Earn by completing miniature courses on different currencies.