UK’s Tier 1 Brokers: Which One Is The Best For You?
Definitive guide to choosing a UK stock broker - PART 4
This is part 4 of Bankeronwheels.com’s Definitive Guide to choosing a Stock Broker in the UK.
The late 1980s through to the mid 2000s were a good time to be an investing adult in the UK. Fees were coming down, choice was going up. You no longer had to buy your shares via a man in a pinstriped suit and a top hat in an office. At first you could deal by phone, then online. The government introduced Personal Equity Plans – the precursor to the ISA – and SIPP accounts for retirement were launched.
Economic growth and soaring asset prices meant those building their careers in this era have done well. They want cost effective, safe and user-friendly platforms to facilitate investing and managing a lifetime of pension and ISA savings.
This generation of investors do care about names. They have some loyalty to brands and prefer long-standing firms, with a good track record in terms of both reputation and profitability. They care about strong customer service as their needs and aims are more complex than slamming some cash into an ETF once a month.
Today, our focus is on Tier 1 Brokers – classic, long-established brokers targeting the wealthier demographic in the UK.
KEY TAKEAWAYS
- The UK ‘Big Three’ started in the 80s and 90s: are mostly businesses built up in the finance-friendly boom years of the late 1980s and 1990s in the UK. Some like AJBell and Hargreaves Lansdown were telephone dealing pioneers, some like Interactive Investor got in early to the world of the internet and online banking and payments. Some international names later joined the UK ones like Interactive Brokers, Vanguard or Fidelity.
- Business models are robust and profitable: charging both account fees and dealing commissions on hundreds of billions of GBP of assets under administration. Some offer or work with advisors, some run in-house mutual funds alongside those offered by major fund providers. Most are listed on public markets.
- You may need to shop around: But Interactive Brokers and Hargreaves Lansdown outpace competition for ISA and GIA accounts. IBKR tops our cost ranking for SIPP, followed by Fidelity. AJBell takes two third places for ISA and SIPP. You may need to choose different brokers for different account types.
- Platform features: Interactive Brokers leads here with the widest possible range of tradeable securities, access to exchanges worldwide and advanced features like share lending, margin loans and multicurrency. Other brokers cover basics well.
- Tax Wrappers: AJBell and Hargreaves Lansdown dominate in terms of tax efficient account range. Fidelity, Interactive Investor and Vanguard also cover most but not all bases.
⚠️ Banker On Wheels Broker Classification System: Unsure whether a Tier 1 broker is for right you? Check this guide to UK Broker Tribes first.
UK's leading Standalone brokers
in this guide we focus on pure-play brokers
🔎 These brokers are not affiliated with banks
Focus of this guide
To categorise brokers we use two dimensions:
- Pure Players vs. Banking Group Brokers – Pure players (right side of graph) are independent from a Systemically Important Banking Group. They specialise in brokerage business. This article will focus on a subset of this wider group. While some pure players may have a banking licence, these activities are non-core to the business, and not systemically important. Then, there are Brokers that are part of a Systemically Important Banking Group (left side of the graph).
- Sophistication and Product-Suite – Within the pure players we make distinction between Tier 1, Tier 2 and Tier 3 players based on considerations like price, sophistication or size of client portfolio. Today, we will focus on the Tier 1 players. Tier 1 brokers typically cater to investors with medium to large-sized portfolios.
common characteristics
What have TIER 1 Brokers in common?
Often more expensive than Neobrokers
Tier 1 Brokers usually have a few decades of time in the industry behind them. The business model is established, and the firms are comfortably profitable, with combined revenues from dealing commissions, custody fees and retained interest on cash. They focus on providing access to a wide range of shares, funds, trusts and ETFs, at reasonable cost with strong administrative and customer service competency.
but with established business models and Good customer service
They’re large organisations, with tens of hundreds of billions GBP assets under administration. Their platforms are designed around a website rather than an app, although most have functional apps too and these are getting better with time. You’ll likely be able to get through to a reasonably knowledgeable customer assistant on the phone or pursue any questions by email and get a reply quickly unlike neobrokers. Most are listed on an exchange and those not listed are parts of colossal players in the industry like Vanguard, Fidelity or Abrdn.
Pros & Cons of Tier 1 Brokers
- Tried and tested business models
- Strong customer service
- Tax wrappers cover most bases
- Can have slower, more cluttered user interface
- Fees generally higher than neobrokers
- Tendency to nudge customers into overtrading, bias to action
Suitability
Potentially Suitable
May be hard to navigate or manage for beginners, more expensive
Suitable
tax wrapers, universe of instruments, but Watch the fees
Suitable
do your research - Some are more sophisticated than others
Is a tier 1 broker suitable for you?
Do you have a Substantial portfolio, and need a tax wrapper?
Managing family accounts or investing for children? Tier 1 Brokers should be the first place you look.
- Age: Typically mid 30s-70+
- Portfolio Size: Significant, may be over 85k FSCS limits
- Sophistication: moderate to Advanced
- Counterparty Risk Aversion: Moderate
- Investment Horizon: Medium to long-term (20-40 years)
The key goal for such investors is going to be sleeping well at night, knowing their assets are not going to be subject to large counterparty risk and drama related to the firm they invest with. Managing hundreds of thousands or millions of pounds via a mobile app may be a step too far.
Their holdings represent the fruits of decades of effort and while not paranoid about markets or clueless about investment, trust and safety really matter to them. That £85k protected by the FSCS doesn’t buy you many years of retirement, certainly not if you drive a Range Rover.
Fees Matters...but reliability matters even more
They’re investing for long enough that platform sophistication and fees matter, but not long enough that years of legal wrangling to get their assets back after a firm failure won’t be a massive headache.
In this regard, they’re willing to exchange the cheapest fees for a degree of confidence that the broker will be around for the 20 plus years they need it. On a portfolio of a million GBP, paying a few pounds each month in custody and dealing might not feel like a bad deal if it provides that peace of mind.
OUR CRITERIA: Three differentiating factors
1. Safety
Tier 1 brokers are established & profitable
The first line of protection for investors in the UK is the £85k per person, per institution, FSCS compensation limit. Ideally, we will never need to rely on this, but its existence is reassuring. Most customers of Tier 1 brokers will have investments significantly over this limit and cannot rely on it alone to safeguard their financial plans. We look at public listings, ratings from credit ratings agencies, profitability and history as a guide to the direction and strength of the firm. This can’t give us certainty, only more or less confidence. All of our Tier 1 brokers reviewed are regulated by the FCA. Most are listed on a stock exchange or a subsidiary of a larger parent firm listed on an exchange. Founders (as at AJBell and Hargreaves Lansdown) or their descendents (at Fidelity) may have significant ownership of the firm, giving them skin in the gain as their own fortunes are tied to the success of the platform. Despite the financial chaos in 2008, the Tier 1 brokers steered clear of trouble and kept their good name.
some brokers are rated by rating agencies
| Brokerage | Credit Rating |
|---|---|
| IBKR | S&P A - |
| Saxo | S&P A - |
| Swissquote | Unrated |
| AJ Bell | Unrated |
| Hargreaves Lansdown | Unrated |
| Abrdn: Interactive Investor | S&P BBB+ Moody Baa1 |
| Fidelity | Unrated |
| Vanguard | Unrated |
| IG | Unrated |
2. FEES
Low fees matter – but not at any cost.
Investing is about wealth preservation and growth. High fees for either custody or trading hinder us in achieving these goals.
3. Platform Features - Portfolio transfer feature is a must-have
Fewer features, lower scores
We want to be able to navigate platforms quickly, locate investments and see performance data in a straightforward way. Poor platform design is an obstacle to the clarity we need as long-term investors. We want a good range of funds, especially ETFs, available to build our portfolio. It’s better for our knowledge rather than the platform to be a limiting factor in how we invest. Good service for portfolio transfers in and out of the broker matter for the customers of Tier 1 brokers, since they may be consolidating investments and pensions from many accounts onto one platform.
additional consideration: tax efficiency
More accounts get The mention badge
We can successfully invest our money but see our gains eaten away by tax if we stray outside of the network of UK tax efficient accounts. See article 1 in this series for the impact capital gains, dividend and interest taxes make on investment returns! Limited account availability means complicating our financial life by using multiple platforms to cover our bases. Of course, not every investor needs every type of account, but availability is a strength. A wide range of accounts is particularly appealing to the typical mid-to-later-life customers of Tier 1 brokers, who may be investing for a spouse, partner or children.
1. safety considerations
- Gold: VANGUARD
- Silver: AJBELL
- Bronze: IBKR
- Also Raced: SWISSQUOTE, IG, II, FIDELITY, HARGRAVES LANSDOWN & SAXO
Well defined & transparent business Models
Tier 1 brokers need to act as a haven for decades of savings and a hub for the finances of a family. Competence is critical. All the Tier 1 brokers based in (or with subsidiaries based in) the UK are registered and regulated by the FCA and all are subject to FSCS guarantees. They all make their money from a combination of custody fees (generally charged as a percentage) and trading commissions, generally flat or scaled to your trading activity. Significant income is also derived from retained interest – the interest received on the cash holdings of investors is not passed on at the same rate.
We’ll look briefly at how the brokers we reviewed keep the lights on financially. We can break down this segment of the broker landscape into two sub groups.
long standing & big aua
| Brokers | Year Established | AUA | Market Cap |
|---|---|---|---|
| Hargreaves Lansdown | 1981¹ | 155 | 5.2 |
| Interactive Investor | 1995² | 70 | 2.5 |
| Vanguard | 1974 | 15⁴ | Private, mutual⁴ |
| AJBell | 1995 | 80 | 2.0 |
| Swissquote | 1996 | 53⁵ | 4.5 |
| IBKR | 1977 | 336⁵ | 14.6 |
| Fidelity | 1969 | Unpublished | Private, family owned³ |
| Saxo | 1992 | 91⁵ | Private³ |
| IG | 1974 | 3 | 3.9 |
¹ Undergoing deal to be taken private by consortium of private equity and sovereign wealth funds. Still listed as of date of writing.
² Interactive Investor is a subsidiary of the asset management firm Abrdn and the market cap listed is for Abrdn.
³ Refers to parent company not national subsidiary – Fidelity, Vanguard have not been operating in UK until recently.
⁴ Vanguard Investor UK is wholly owned by Vanguard, which is itself owned mutually by the investors in Vanguard funds. AUA figures for Vanguard are for the UK operation.
⁵ AUA figures for Swissquote are for the entirety of the Swissquote Group. AUA for IBKR and Saxo are for the business as a whole, not UK only.
Category one: Big guns of buy & hold
These firms facilitate retail investors in buying, holding and selling the core basics of a portfolio – stocks, bonds, funds and ETFs.
Vanguard: The Golden Standard for safety & trust
Vanguard stands by Blackrock and SPDR as one of the Big Three asset managers. As of October 31st, 2024, the Vanguard Group (sole owner of Vanguard UK) had 9.3 trillion USD under management worldwide. If something affect Vanguard’s capacity to operate, this would become a matter of huge regulatory and even political importance. The Vanguard group is wholly owned by the investors in its US ETFs and index funds. In this regard, Vanguard’s UK business is the gold standard for safety and trust between the individual investor and the broker. It’s backed by a giant but owned by individual investors. With no trade commissions, income is generated from account fees and the ongoing charges on their funds.
Hargreaves Lansdown and AJBell: Strong Plain Vanilla Firms
Hargreaves Lansdown and AJBell have transparent business models based on account fees, trade commissions and retained interest. Both firms also run their own mutual funds, which attract business through familiarity. Both are profitable and currently listed the London Stock Exchange. AJBell and Hargreaves Lansdown have around £86 billion and £155 billion AUA respectively as of 2024. However, as of writing of this article, HL is in the later stages of a deal with private equity and sovereign wealth funds to take it private. PE ownership has a mixed track record for serving customers well, which detracts from our view of HL going forward.
Interactive Investor: part of Abrdn using a fixed fee model
Interactive Investor (II) operates on fixed fee system, with different price levels for the value of assets held in an account. These fees include some free trading activity each month, beyond which additional trades are subject to commission charges. II is owned by Abrdn, a significant, LSE listed global asset management firm with 500 billion GBP AUM.
Fidelity: Another strong American Company
Fidelity International is the global wing of the US family-owned brokerage firm Fidelity. It charges both commission and a percentage-based account fee, decreasing for larger accounts. Like Vanguard, Fidelity has its own range of low fee passive and active funds which it promotes via its platform, a significant revenue source.
Category Two: Sophisticated International brokers
These brokers aim to attract both retail and professional investors and as such provide a wider range of tradable securities, extending to derivatives. They also have a wider range of account types, some with features for very frequent traders.
Interactive Brokers: low fees & high sophistication
IBKR is a US based, professional level investment platform used by hedge funds and family offices as well as retail investors worldwide. IBKR is listed on the Nasdaq and is consistently profitable. Very low fees on very high volumes of trading activity (across stocks and bonds, ETFs and FX, derivatives and crypto) across the platform are the core of its commercial viability.
IG: a model with trading fee at the core
IG began its life in the 1970s as a contract for difference broker, allowing investors to speculate on the price of gold and financial assets. This expanded further into options, futures, FX and commodities trading. IG serves both retail and professional clients in these areas. This trading activity remains its core business and profit center, although it now runs a smaller execution only investment platform on the side. In this regard, its business is vulnerable to customers wising up and behaving more rationally. It has no platform fees for its ISA but does charge commission on trades. It outsources its SIPP to another provider, charging both commission and an annual flat fee. IG is consistently profitable and listed on the LSE.
Swissquote: high dealing fees
Group Holdings is a banking group founded in the 1990s with subsidiaries dedicated to FX trading (in the UK) institutional investors (in Singapore and Hong Kong) and everyday digital banking services, with facilities for retail investors (in Switzerland, Luxembourg and the UAE). The group is listed on the SixSwiss exchange. Retail investor activity is not the group’s main source of income, but with rising assets under administration and relatively high dealing fees, it is a key component. The firm has Swiss and European banking licenses, oversight by ESMA and the local regulators of its specific branches (the FCA regulates the UK FX operation). Swissquote is also used by professional & institutional clients. Switzerland is famous for its banking privacy rules and politically neutrality.
saxo: targeting both retail & corporate customers
Like IBKR, Saxo aims to be viable for both professional and retail investors, with many of the extra features and products that wider audience may need – derivatives, margin loans and multicurrency accounts. Unlike the other complex brokers above, Saxo is a private company. 49% of the firm is owned by the conglomerate Zhejiang Geely Holding Group. 29% is held by the founder, Kim Fournais. Mandatum, a Finnish wealth and asset manager owns 19%. The rest is held by current and former employees. Commission and custody charges are the bedrock of its business.
2. fees
- Gold: HARGREAVES LANSDOWN
- Silver: FIDELITY
- Bronze: INTERACTIVE BROKER
- Also Raced: VANGUARD, SAXO, AJBELL, SWISSQUOTE, INTERACTIVE INVESTOR & IG
Cost Simulation Assumptions (GIA accounts only)
| Model Feature | Assumption |
|---|---|
| Investor | UK |
| Instrument | UCITS ETF |
| Account | General |
| Initial Investment | £ 100,000 |
| Monthly | £ 1,000 |
| Time Horizon | 20 years |
| Gross Return | 8% |
⚠️ Our Methodology: The medal for this category is based on the GIA cost account simulation only. It assumes a 20-year accumulation period. We did it to make fees comparable for all providers. It is also part of our European cost comparison methodology. But, special mentions for the ISA and SIPP best offers are given in the Tax Consideration section at the end of the article.
IBKR and Hargeaves Lansdown have best GIAs
- Hargreaves Lansdown is free of charge for those holding ETFs in GIAs. With a low cost ISA coming out at just £900, this makes it attractive for those who have a pension elsewhere and don’t need a SIPP with HL. HL’s SIPP is expensive at £4000 for our models’ assumptions.
- Fidelity is cheap for GIA accounts, second only to HL. It’s SIPP is also cost effective, only bettered by IBKR. Investing via Fidelity in an ISA is more expensive than most of the competition however.
- Interactive Brokers comes out at the lowest cost across the board. If you want a SIPP, GIA and ISA on the same platform, you’ll come out ahead in terms of fees if you use IBKR.
- IG – Despite buy and holders not being its focus, IG is cost effective for both GIA and ISA accounts, with no account fees and just £684 in trade commissions. Its SIPP however is to be avoided as it is extremely costly versus even the next most expensive option!
AJBell & Interactive Investor: An average offer
- AJBell is more expensive than HL and IBKR for ISA accounts and slightly more costly than IBKR for a GIA. It’s SIPP is significantly cheaper than HL’s, but more expensive than IBKR’s.
- Interactive Investor’s flat fee scheme is transparent and easy to understand, but is more costly than the percentage-based versions at the other big brokers.
Vanguard, Swissquote and Saxo: far too expensive
- Swissquote lacks ISA or SIPP accounts, so investing with them will be treated as using a GIA if you’re a UK resident. This is seriously expensive versus the competition.
- Saxo is too expensive across the board for us to recommend. Its fees will have to drop very significantly before it becomes a viable option for UK investors.
- Vanguard has sailed into troubled waters in cost terms recently. The pioneers of low cost investing, they are sadly nowhere near the top of our league table for cost effective investing, due to high custody charges. This needs to change if they are to retain their credibility as a brand in the UK. It is cheaper to hold Vanguard funds on other platforms than to work through Vanguard’s own, which is a shame.
Vanguard and SAXO are to be avoided across accounts
| Brokers | ISA | GIA | SIPP |
|---|---|---|---|
| IBKR | £647 | £647 | £647 |
| AJBell | £1,182 | £1,182 | £2,742 |
| Hargreaves Lansdown | £900 | £0 | £4,000 |
| Interactive Investor | £2,878 | £2,878 | £3,118 |
| Saxo | €14,204 | €14,204 | €14,204 |
| IG | £684 | £684 | £4884 |
| Fidelity International | £2,075 | £342 | £2,075 |
| Vanguard Investor UK | £6,769 | £6,769 | £6,769 |
| Swissquote (lux) | N/A | €3,494 | N/A |
3. Platform
- Gold: INTERACTIVE BROKERS
- Silver: INTERACTIVE INVESTOR
- Bronze: HARGREAVES LANSDOWN
- Also Raced: IG, VANGUARD, FIDELITY, SAXO, AJBELL & SWISSQUOTE
Our Tier 1 brokers separate into two main classes when it comes to features. First designed around facilitating buy and hold investing into stocks, bonds, funds and ETFs and those facilitating more complex portfolio management with multiple currencies. Second derivatives and potentially return boosting services like share lending and margin loans.
IBKR: the undiscussed Winner
Interactive Brokers falls squarely into the second group and is the clear leader amongst Tier 1 brokers in terms of features. It is a professional level gateway to markets and portfolio management. IBKR allows you to trade almost any instrument on almost any exchange in the world. It facilitates funding your account in multiple currencies to avoid constant FX transactions. You can opt into share lending to potentially squeeze a basis point or two more annual yield from your portfolio. If you want to lever your portfolio up with margin, IBKR will provide it at competitive rates. Derivatives can be held to manage risk. All these advanced features make it ideal for sophisticated investors with the knowledge and training to successfully deploy them. That said, it is critically important to know your own needs. For many investors this array of tools will be a distraction from doing the basics well and for others they could be tempting ways to get far out of your depth.
Importantly, it allows you to opt in as elective professional investor opening up investing to the US ETF universe and other products.
AJBell, Hargreaves Lansdown, Fidelity and Interactive Investor: great for buy & hold
AJBell, Hargreaves Lansdown, Fidelity and Interactive Investor are all high quality, easy to use buy and hold big guns. They all have a good range of ETFs available for portfolio construction, all facilitate regular investment plans, all have high quality customer service.
- Interactive Investor has the best user experience of the four, having recently been heavily spent on upgrading its website. It also offers multicurrency SIPPs, which can be very valuable given the tax agreement with the US (no withholding taxes).
- AJBell and HL give options to manage your account by another family member
- Fidelity is let down a little by its more limited range of ETFs compared to those others we reviewed.
All have a bad habit of giving you slightly too much financial news and commentary. It’s not particularly important to know which shares have been rising and falling in recent days or hours and can only cause anxiety or nudge you into pointless activity.
Vanguard: if you want Vanguard products only
Vanguard gives you a straightforward and clear platform. You can only invest in the funds and ETFs Vanguard provides, but since these are generally good this is not a huge issue. You can set up recurring investment orders and sell one investment into another while rebalancing (rather than waiting for cash and then investing it). Their customer service responsiveness is excellent, and they’ve recently released a mobile app for those who like to check their investments on the go. It’s very simple, but it does all the jobs it needs to do. The portfolio visualisations are pleasing to the eye, especially compared to the overloaded dashboards of some other brokers. There’s not a lot to do on the platform and this is a compliment in our opinion.
IG: Focused on traders
IG is an odd beast.
The heart of the firm is very much in its CFD trading platform. Investing of the kind we advocate at Banker On Wheels simply isn’t a priority for IG and this is reflected in an information heavy, trader-centric environment. As well as self-managed investing accounts (ISA & GIA) It has a robo advisory service platform called Smart Portfolios, with funds managed by Blackrock. Its pension product is managed by an external firm, Options.
You can invest in a wide range of ETFs, shares and funds – but frustratingly cannot set up regular investments into your portfolio to put it on autopilot. There’s nothing unusually bad about the product provided, but it’s good to feel that your investment experience is the main priority for the broker. In this case, we feel that the effort from IG has instead been focused on traders, which makes it hard to recommend for our use case.
Saxo & Swissquote - IBKR-Like but not quite
- Saxo is hot on the heels of IBKR in terms of trying to bridge the gap between retail and professional investing platforms. Margin loans, CFDs, derivatives and share lending are all available alongside the more familiar ETFs, shares and funds most of us invest in. If you need these, you may want to check out Saxo and IBKR side by side to see which best meets your needs. If you don’t, the same concern we already mentioned applies – why tempt yourself with complexity?
- Swissquote tries to do everything. You can trade a great range of ETFs, shares and funds. You can get margin loans, lend your shares and use options and futures. We found the platform rather cluttered and hard to navigate, however. It’s a good deal more complex than the buy and hold giants like Vanguard and Fidelity but doesn’t feel as professional as IBKR or Saxo.
Conclusion
🏆 Best UK Tier 1 Broker: Interactive brokerS (GOLD)
🥈 Silver: HARGREAVES LANSDOWN 🥉Bronze: AJBELL
tier 1 podium
| Brokers | Company | Fees | Platform | Overall |
|---|---|---|---|---|
| IBKR | 4.6 | 5.0 | 5.0 | 4.9/5 |
| Vanguard | 5.0 | 1.5 | 3.5 | 3.3/5 |
| Interactive Investor | 5.0 | 2.0 | 4.0 | 3.7/5 |
| AJ Bell | 4.5 | 4.0 | 4.0 | 4.2/5 |
| Hargreaves Lansdown | 4.0 | 5.0 | 4.5 | 4.5/5 |
| IG | 3.5 | 3.0 | 3.75 | 3.4/5 |
| Fidelity | 5.0 | 4.0 | 3.5 | 4.2/5 |
| Saxo | 4.0 | 1.0 | 4.5 | 3.1/5 |
| Swissquote | 4.5 | 1.0 | 4.0 | 3.1/5 |
Gold Medal: Interactive Brokers is a powerful, comprehensive investing platform with professional level tools for portfolio construction and management. If this level of sophistication is something you both need and can use effectively, it is a clear winner. What’s more, IBKR manages to offer you this feature set at very modest cost, significantly undercutting some of the classic UK Tier 1 brokers on fees and commissions over a long-time horizon.
Silver Medal: Hargreaves Lansdown is an excellent choice of platform for confident investors who need a full range of family friendly accounts including Junior ISA and SIPP accounts. Fees are excellent, ETF availability is high, customer service is responsive and competent.
Bronze Medial: AJBell is another great option for investor looking into great ETFs availabilities and tax wrappers. Some fees are a bit higher than Hargreaves Lansdown – but a recent buyout deal by private equity firms leaves AJBell as the largest brokerage in the UK with a public listing. This gives it the edge in our view, from a company trust perspective, in respect to Fidelity that scores very closely. AJBell is also the only company with Hargreaves Lansdown to offer the full set of UK tax wrappers.
What matters most in tier 1 category?
Company (35%) and Platform (35%) have slightly higher weight
We apply the following weights to our subscores:
- Company (35%) – Confidence in the competence and prudence of their broker is critical to the users of Tier 1 Brokers. Lifetime pension and ISA savings and savings for the future of young family members will be far more than the 85k FSCS guarantee
- Fees (35%) – Investors using Tier 1 Brokers can handle non-zero fees, but with the hundreds of thousands or even millions GBP invested, expenses stack up. Nobody wants to pay thousands of pounds more for the same product from an unnecessarily pricey platform.
- Platform (30%) – The investors using these brokers are not particularly concerned with slick, mobile ready presentation of platforms. However, they put great value on the availability of investments to choose from and tools like regular automatic investing.
tax Consideration
Complete Suite: HARGREAVES LANSDOWN & AJ BELL
- Cheapest ISA: Interactive Brokers & IG
- Cheapest SIPP: Interactive Brokers
Tier 1 brokers should offer a wide range of tax advantaged accounts. They have the scale, customer base and administrative capacity to offer them and mid-to-later life customers managing family finances need them.
Tax wrapper summary
| Brokers | ISA | SIPP | GIA | Lifetime ISA | Junior ISA | Junior SIPP |
|---|---|---|---|---|---|---|
| HL | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ |
| AJBell | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ |
| Interactive Investor | ✅ | ✅ | ✅ | ❌ | ✅ | ❌ |
| Swissquote | ❌ | ❌ | ✅ | ❌ | ❌ | ❌ |
| Fidelity | ✅ | ✅ | ✅ | ❌ | ✅ | ✅ |
| Vanguard | ✅ | ✅ | ✅ | ❌ | ✅ | ❌ |
| IG | ✅ | ✅ | ✅ | ❌ | ❌ | ❌ |
| IBKR | ✅ | ✅ | ✅ | ❌ | ❌ | ❌ |
| Saxo | ✅ | ✅ | ✅ | ❌ | ❌ | ❌ |
Full Tax Wrapper Offer: Hargreaves Lansdown & AJBell
AJBell and Hargreaves Lansdown excel in this regard. You’re offered the standard trio of stocks and shares ISAs. GIAs and SIPPs, but also the Lifetime ISA for those saving towards a first home or flexible retirement use. Junior ISA and Junior SIPP accounts are ready to go for those with children. They provide integrated account viewing – a nominated lead account can view and manage all ISAs, SIPPs and GIAs for a family
Fidelity, Interactive Investor and Vanguard: Lack the full suite
- Fidelity is a close second, lacking the Lifetime ISA but covering all other bases.
- Interactive Investor and Vanguard are slightly more limited again, offering neither the Lifetime ISA or Junior SIPP option.
The Other brokers are not good for family oriented investors
Things become less attractive for family focused investors at the remaining Tier 1 Brokers. None of Saxo, IG, IBKR or Swissquote offer Junior accounts or Lifetime ISAs. Saxo, IG and IBKR succeed in offering the core three of ISA, SIPP and GIA. Swissquote does not offer ISA or SIPP accounts, which will seriously limit its appeal to investors based permanently in the UK.
Tax Report Functionality
All the brokers reviewed offer annual account activity summaries to assist in filing your tax returns.
🏆 UK's Best Tier 1 broker
Interactive Brokers
CATEGORY RANKING: EXCELLENT
4.9
/5
Key Pros:
- One of the most sophisticated brokers
- Listed on NASDAQ and Rated by S&P
- Very competitive fees
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What other categories are available in the UK?
Tier 1 brokers are great options for confident investors with substantial portfolios, who need a wide range of tax-efficient accounts. If you have a smaller portfolio or are extremely cost sensitive, you might want to read our guide to Tier 2 brokers. If you want the security of your investment portfolio being administered through a major bank, check out our review of Bank Brokers.
Good Luck and Keep’em* Rolling!
(* Wheels & Dividends)
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