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What Is an Investment Platform?

Written by, Marija Petkova

Updated May, 11, 2022

If you’re considering investing, an investing platform might be a good place to start. 

 What is an investment platform, how does it work, and how to choose the right one?

Let’s find out.

What Is an Investment Platform and How Does It Work?

Investment platforms are digital sites where you search for and buy a range of shares, funds, and bonds

Most investment platforms offer information about investment trends, what performs best on the market, as well as analysis of different investment styles. 

In addition to helping you keep up to date, any online investment platform allows investors to track their investments, provides detailed information about how their stocks are performing and gives access to their trading history

Arguably, the biggest benefit of investment platforms is that investors have total control of their investing decisions. Many of these platforms also have mobile applications that allow investors to trade from their phones. In fact, those that are user-friendly are able to encourage more interest in investing.

Types of Investments

Different types of investments have their own rules and risk factors. Here are the most common types of investments.

  • Shares 

Buying shares in a company means owning a piece of that company. When the price of the shares is growing, investors make a higher profit. When the situation is reversed, investors’ shares lose value and their profit suffers. In case the company goes under, the investors can lose all of their investments. 

  • Funds 

A fund is a collective investment, where investors pool their funds and spread them across different underlying investments. Investors can invest in a region or country, or a commodity such as oil, gold, and tech. Since they invest together, there is reduced risk. There are several types of funds like index funds, money market funds, and ETFs where each of them have differing features too.

  • Bonds 

Bonds are units of corporate debt, whose prices are linked to interest rates. When investors invest in bonds, they essentially lend money to corporations, companies, the government, and other organisations in exchange for interest payments.

You may be interested in: Are Premium Bonds Tax Free?

How to Choose the Best Platform for You 

There are a lot of investment platforms in the UK, and choosing the best one for you, can be tricky, especially if you’re new to the market. 

When choosing an investment platform, you should consider: 

  • Costs: How much the platform charges for their services.
  • Mobile app: Investment platforms with apps allow investors to work on the go. 
  • Types of investment platform: Always make sure to check if the platform offers the types of investments you’re interested in. 
  • Reviews: What existing and past users of the platform have to say about it. 

Top 5 Investment Platforms for Beginners

If you’re seriously considering joining an investment platform, here are the top 5 investment platforms on the market.

Nutmeg 

Nutmeg is one of the largest investment platforms in the UK. This platform is easy to use, can help investors build and manage different portfolios, and uses technology to keep the charges low

Evestor

If you are looking for simple choices and low-cost investment portfolios with full transparency, then Evestor is the right platform for you. Evestor offers low, medium, and high-risk portfolios, with low annual fees. You can also invest in stocks, shares, and a pension via the platform. 

Vanguard

Vanguard is another great UK investment platform for beginners with an intuitive user interface that is easy to navigate. It allows users to invest by purchasing a ready-made fund portfolio or building their own portfolio and invest into stocks and shares ISA, or into a brokerage account.

Moneyfarm

Moneyfarm offers different ready-made portfolios that match various goals and investing styles. The platform has a good portfolio performance and is perfect for beginners looking for a reliable platform that manages their investments

Wealthify

Wealthify is a beginner-friendly platform that offers plenty of useful user guides to help them better understand the investment process. Once you sign up on the platform, choose what type of investor you would like to be and Wealthify prepare an investment plan and manage it for you. There is no minimum investment and you can withdraw funds without being subjected to penalties. 

Bottom line 

Investment platforms are one of the best ways to join the world of investing. There are plenty of platforms to choose from. They offer different types of investment and vary in costs. Beginner-friendly platforms generally have useful tools, guides, and a simple mobile app.

                           

Frequently Asked Questions And Their Answers

Do I have to pay for an investment platform?

All investment platforms charge investors for using their services. Some are more expensive than others, so it’s best to make sure you do thorough research before joining one.

What are the main types of investments?

The most popular types of investments are funds, bonds, and shares. Shares are considered to be the riskiest type of investment.

What is an investment platform with an “Execution-only” label?

“Execution-only” platforms don’t provide any advice on the benefits or the risk of an investment. As such, they are more suitable for experienced investors.