With cash ISAs offering rock-bottom returns – just 20p for every £100 in some cases – is it any wonder that more of us are deciding to take our savings elsewhere? Thanks to a proliferation of financial apps, it’s now easier than ever to manage your money from your mobile phone. But with new platforms seemingly arriving each week, how are newcomers meant to know where to look?
Here’s our pick of the best apps for first-time investors:
AJ Bell Youinvest
Investment platform AJ Bell is often cited as the best option for smaller and medium investors, largely due to its low platform fees. Like most established providers, it offers an excellent range of investments to choose from, with access to more than 2000 funds and shares. Perfect for anyone who thinks they can spot a winner. Meanwhile novice or risk-averse investors can buy into the company’s ‘passive funds’ – off-the-peg selections assembled by AJ Bell’s fund managers. In recent years, they’ve easily outperformed cash ISAs.
AJ Bell’s mobile app – Youinvest – works on both Android and iOS devices and is currently rated 4.7 on Apple’s app store. While it might not have the flashiest-looking interface, it’s refreshingly functional, allowing you to research, purchase and sell investments with minimum hassle.
As one of Britain’s most downloaded financial apps, Revolut has already made a sizeable dent in the retail banking market, particularly amongst younger customers. Now the fintech heavyweight has its eyes on the investment market – no doubt looking to cash in on the day-trading craze amongst online millennials.
Ever the disruptor, Revolut has one advantage on its established competitors: it doesn’t charge you for making trades – although it does limit the number of transactions that basic (i.e. non-paying) customers can make. There’s no doubt that Revolut makes investing easy, but it does come with some drawbacks: the list of available investments is currently limited to US-listed stocks and is significantly narrower than the established platforms. If you’re looking to combine individual equities with more conservative options – like tracker funds – you’ll need another platform to use alongside it.
While it might not look like the flashiest option – at least judging by its slightly dated website – Manchester-based Interactive Investor has quickly cemented its reputation as a solid platform for knowledgeable investors.
The biggest difference between Interactive Investor and its competitors is that it charges customers a flat annual subscription rate, rather than a fee based on the value of your portfolio, making it a more cost-effective choice for those which larger pots to invest. The standard stocks and shares ISA currently costs £9.99 a month, and includes one free trade.
Their mobile app is quick and easy-to-use, with good security settings (two-factor authentication and the like). As well as monitoring their real investments, users can also create a virtual ‘wishlist’ portfolio and keep track of those shares over time. Good practice for newcomers looking to hone their skills in a risk-free environment.
Charles Stanley Direct
Investment giant Charles Stanley has been managing money since the 18th century. But for all its old City polish, it has also established itself as a quick mover in the digital realm. Its online platform – Charles Stanley Direct – offers a comprehensive portal for managing all of your money, from pensions to ISAs and investments. Last year it was picked as ‘Best Buy’ by the consumer finance website Boring Money.
Clients speak highly of the huge range of investment options on the platform, and the quality of market research available to customers. Like all established brokers, it does charge a fee – £11.50 – to buy or sell shares. Although it does waive the monthly portion of your annual portfolio fee for each month that you make at least one trade – making it a cost effective option for active customers with mid-sized portfolios.
The Charles Stanley Direct app is free to download and easy to use. The views can be customised, allowing users to go straight to the information that is most important to them.
Another disruptor with its eyes on the millennial market, Freetrade does exactly what its name suggests – allowing customers to buy and sell investments without paying a trading fee. Its slick and speedy app has won great reviews from first-time investors. More interestingly, though, it’s also won the praise of more experienced types, who have been impressed at the range of potential shares and funds it offers.
As with any low-cost services, there are some small catches. Uniquely amongst investment platforms, Freetrade has no telephone customer service – although it does have a chat interface. Sophisticated traders may also be put off by the fact that free trades are only processed at a set daily interval each day (3pm London time). That’s fine if you’re leaving your investments to acquire value – but not so good if you’re looking to take advantage of sudden changes in the market throughout the day.
Finally an option for anyone who wants to sit back and let somebody else do the work. Digital wealth manager Nutmeg made a bit of a splash a few years back as one of the first robot-driven investment services to reach the market. All investors had to do was answer a few quick questions – such as choosing their risk appetite – and Nutmeg’s artificial intelligence would select and maintain a portfolio best suited to their liking.
So how did it go? Some five years later and Nutmeg’s robo-controlled stocks and shares ISA have bagged numerous industry awards and managed to earn a decent return for investors. Its higher-risk portfolio – which focuses entirely on shares rather than funds – reportedly delivered a 56 per cent return for investors over a five year period. Not bad at all. Expect to be hearing more about AI investors before long.