Most individual savers will need to use a platform to invest in investment companies.
Platforms are online services that allow you to buy, hold and sell investment company shares. They also allow you to hold other investments such as individual company stocks and open-ended funds, so you can manage all your investments in one place.
Many platforms offer you the ability to hold your investments inside an ISA, SIPP or Junior ISA. All platforms will also offer an ordinary trading account with no special tax benefits (sometimes called a “general investment account”).
How to choose a platform
Before you choose a platform, think about these questions:
- Does the platform offer all the investments you want to buy? (Note that a few platforms do not offer investment companies).
- Does the platform offer you the tax wrapper(s) you need, such as an ISA, SIPP or Junior ISA?
- What are the platform’s costs? (Such as dealing fees and annual admin charges.)
- Does the platform provide other services that you may need? (Such as telephone dealing).
If you can, it is a good idea to talk to someone who already uses the platform.
The AIC publishes a range of information that is designed to help investors choosing a platform.
Alternatives to platforms
A few investment company managers offer savings schemes. Like platforms, these schemes have their own costs and charges. Unlike platforms, they will typically be limited to the investment companies managed by the group that runs the scheme.