The Best Stocks and Shares ISA Providers

Want to open a stock & shares ISA but don’t know which provider to go to? Today we’ll take a look at the best stocks and shares ISA providers.

It can be daunting looking for the best stocks and shares ISA provider. A quick google search will find you a plethora of different options. The problem is, how do you find the right one.

Some of the providers out there have only been around five minutes. Others use the lure of low or even no fees in order to suck you in. Others use different gimmicks.

So here’s a thought I want you to bear in mind.

If a broker isn’t charging any fees, be sure, you’ll probably be paying for it in a different way.

Nothing good comes for free. Most of these brokers offering zero fees are doing so to get customers through the door because they can’t get you in any other way. The problem is, they still need to make money. So you tend to pay your fees elsewhere, perhaps in the spread, or in a monthly custody fee instead.

If you don’t know what the difference is, don’t worry. I’m about to walk you through everything you need to know to find the right stocks and shares ISA provider, and I’ll also give you my Top 3 providers.

So what considerations are important when choosing between different Stocks and Shares ISA providers? Let’s run through the important ones.

Transaction Fees

Most reputable brokers will charge you a transaction fee. This is a charge you pay every time you buy shares. This will usually be the same fee amount whether you buy 10 shares or 1000 shares. This is important because the transaction fee will usually dictate the minimum number of shares an investor will want to buy.

If the transaction fee is £10, you wouldn’t want to buy £50 worth of shares. This would leave you down 20% from the very beginning. It therefore makes more sense to buy £500 worth of shares, only costing you 2% of the capital. Be mindful of brokers not charging a transaction fee. They will very likely be charging you in some other way.

Custody Fees

Again, most reputable brokers will charge you a custody fee. This is usually a monthly or yearly fee for simply having a trading account open with them. The way these fees are arrived at can vary between brokers, but ultimately they tend to be around the same figure.

range of markets

Range of Markets

Some brokers have a wonderful selection of stocks available to their customers. Some however can be quite restrictive.

It can be incredibly frustrating to find a wonderful business you want to invest in, only to find when you log into your brokerage account, they do not offer shares in that particular stock.

A reputable broker will have a wide range of available shares you can buy. Personally, I want access to all stocks on the London Stock Exchange. That’s FTSE 100, FTSE 250, FTSE Small Cap, FTSE Fledgling and FTSE AIM markets.

Customer Service

Every now and again something may go wrong. You may make a mistake with an order, or simply need to speak to someone about a different type of investment. This is where customer service is key. Many of the smaller brokers have bad reputations for customer service. So it pays to read independent reviews and get the opinions of fellow investors. Ignore the reviews on their websites.

These are handpicked and biased to market their product. There is no incentive for the brokers to provide 100% transparency. Instead, look at chat groups where investors hang out. You might even find some first hand opinions in our Facebook Group. Choose a broker whom others have had good experiences using.

Withdrawal Policies

With long term investing, withdrawing funds is a rare thing. But there may come a day when you need to. Peace of mind is important. So be sure to check the brokers policy on withdrawals. And again, ask around. Has anyone had any trouble withdrawing their funds before? This is another reason why it often pays to use a well established brokerage that has stood the test of time.

So with that, let’s take a look at my Best 3 Stocks and Shares ISA Providers

Hargreaves Lansdown

Transaction Fee: £10

Custody Fee: 0.45% of the Account size per year

I’ve personally used Hargreaves Lansdown now for a long time. Founded in 1981 and listed on the London Stock Exchange in 2007, they have the best range of stocks and shares I’ve seen, hands down. Hargreaves Lansdown provide access to every FTSE stock I’ve ever looked for. Even tiny 25p a share AIM stocks. Their customer service is top drawer. When I contacted them over email they were quick to respond and extremely helpful. I’ve also used their office hours online chat window service and found them very keen to assist.

I have never needed to withdraw my funds, but they have a clear withdrawal policy. Hargreaves Lansdown are also doing very well as a FTSE stock and the last 10 years of financial records show they have always been a very profitable stock themselves. They have a very easy to follow platform and a plethora of research data that investors can delve into about every UK stock.

With regards to the 0.45% Custody Fee, a £10,000 account will pay £45 a year, which works out as £3.75 a month. A £25,000 account will pay @112.50 which is £9.37 per month.

Click here to open a Stocks and Shares ISA with Hargreaves Lansdown today.

Interactive Investors

Transaction Fee: £8/month
NOTE: You get 1x free trade a month however before charges apply, and if you setup the Regular Investing which requires a minimum commitment of £25/month deposit then the transaction fees are free.

Custody Fee: £10/month

Founded in 1995, Interactive Investors are another of the big investment platforms providing Stocks and Shares ISA’s. In January 2020, ‘ii’ introduced free regular investing. The first of the big investment companies to do so. The free regular investing meant the company would scrap their Custody Fees for anyone who made a certain number of trades per month. Unfortunately, for most long term value investors, qualification for this is unlikely due to the low number of transactions made each month. Interactive Investors have acquired Motley Fool Share Dealing in 2015, TD Waterhouse in 2016, The Share Centre in 2020 and Equiniti Group in 2021.

The company were named ‘Best Low Cost Stockbroker’ in 2020 by ADVFN. And they place your funds in a bank account which is established as a statutory trust status which means your money is kept in an account separate from theirs.

AJ Bell

Transaction Fee: £1.50 – £9.99

NOTE: Again, if you invest £25 a month or more using their regular investment service you only pay £1.50 in transaction fees.

Custody Fee: 0.25% of your portfolio value to a maximum of £3.50 per month.

Also formed in 1995, AJ Bell are another great provider of Stocks and Shares ISA’s. Their platform doesn’t offer as many of the shares as we’d like which can be frustrating, however, they are one of the cheapest big broker platforms out there.

I will finish off here, however, by clarifying that transaction fees and custody fees are only really something you would concern yourself over if you had a very small account and were just starting out small. An investor making a £1000 purchase of shares each month will not be too bothered about whether he or she pays £2 or £10 in fees to execute the deal.

And there you have it….

Above all else, you can be sure that these Stocks and Shares ISA Providers have stood the test of time and have not just rocked up out of nowhere, about to fade back into oblivion with your capital. They have withstood crashes, sub-prime mortgage crisis, the 2008 banking failure and the 2020 global pandemic and are still leading the way.