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From Novice to Ninja: How One Millennial Went About Choosing the Right Investment Platform

By Sarah Penney 

In my Millennial Money series, I’ve been sharing my journey as a newbie investor, writing about how I’ve been trying to educate myself on the ins and outs of the markets, keeping myself up to date, and seeking out helpful resources to steer me to make good financial decisions. 

In this article, I’m turning to the practical side of things. After deciding you’re going to become an investor, the next big step is choosing the right platform to execute your investments. Let me tell you, this part was unexpectedly tricky for me, I found the mass of options and information a bit overwhelming, and it was a small roadblock that I didn’t think I’d stumble across.  

While pretty much all investment platforms – also known as trading platforms – essentially offer the same services, each has its own mix of products, fees, and service quality that sets them apart. 

What kind of investor do you want to be?

When it came down to researching which platform ticked all the right boxes for me, figuring out my investing style was key. Did I want to focus on individual stocks, dive into funds or ETFs, or hand over the reins to a robo-adviser to manage my portfolio? 

Ultimately, I decided I wanted to start small and pick a few ETFs and stocks to invest in. Once you’ve made this decision and start googling, you’ll be bombarded by comparison chart after comparison chart, each of which seems to compare different things! I found Boring Money’s reviews and comparisons the most useful. 

In the end, I settled on using Freetrade and eToro. Both platforms are user-friendly and offer a wide range of investments. 

Initially, I opted for eToro because it was highly recommended by friends, is user-friendly, and doesn’t charge platform fees or commissions. Plus, I was pleasantly surprised by the treasure trove of valuable content, advice, and the supportive community that the platform offers. 

Given my preference for an ISA for my investments and noting that eToro only offers an ISA through a partnership with MoneyFarm, I also signed up with Freetrade. It’s simple to navigate and was another popular choice among my friends. The sleek and intuitive user interface of the Freetrade app makes researching and adding Investment Trusts, ETFs, and stocks to my portfolio simple. Their proactive approach in notifying me about new investment opportunities and keeping me in the loop about dividends adds to the positive user experience. However, the platform fee is high. 

Don’t forget about your cash! 

Something that I wish I’d clocked during my research, and that I’m very glad to have discovered now, is that platforms often offer interest on uninvested cash at rates significantly higher than traditional banks. For instance, Freetrade is currently offering 5% AER on uninvested cash in an ISA (which means you also don’t need to worry about paying tax on the interest). On the flip side, eToro’s interest rate depends on your account balance, for example, having $10,000 can earn you a 2% interest. 

There’s more on offer than just investment execution 

The two platforms I’ve selected sit on two sides of the platform service spectrums. Freetrade leans more towards a do-it-yourself approach, offering over 6,000 investment options and putting the power in the hands of the investor to make their own choices.  

eToro, on the other hand, also offers a range of features to assist in investment decision-making (or to take the decision-making away). Their Smart Portfolios feature offers portfolios curated by eToro analysts (and guided by BlackRock), which investors can adopt as ready-made investment portfolios. They also have their CopyTrader service, which they became famous for in the early days, this allows you to mimic the moves of successful investors in real-time.  

Personally, while I appreciate the myriad of tools on offer, for now, I’m content with taking a gradual approach, slowly building my portfolio with a long-term perspective in mind. I think that once my confidence has grown a little though, I’ll take a closer look at some of eToro’s Smart Portfolios. The services they offer are exciting and I’m sure add a little bit of spice to an investment journey! 

Keep in mind how your needs are likely to change 

As I progress on my investment journey, I’m also interested in exploring what other platforms have to offer, especially in terms of enabling shareholder engagement. It feels like as you mature in your investment journey, there’s a natural progression from beginner-friendly platforms towards more comprehensive services that cater to evolving needs. 

Being involved with The Engagement Appeal has opened my eyes to the importance of investor engagement, and the fact that this needs to be a two-way street. Investors need to be proactive in their engagement with the companies they invest in, and vice versa. The platforms I invest through don’t seem to prioritise engagement, at least, they don’t make it easy to find out how I would register for the AGMs of companies in my portfolio, or vote on shareholder resolutions. I know there are platforms, such as Interactive Investor, which are much better at this.  

At some point in the future, I’ll look to transfer some of my investments, so that I can be a more engaged investor. 

Sarah Penney is TEA’s Millennial Money Writer, covering personal finance and investing from the perspective of a young millennial building a career, travelling the world and navigating the world of investing. She explores subjects that promote understanding of markets, investment trends, and macroeconomics, through her lense. 

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