How do I choose a broker: what really matters?

The three main criteria

Brokers should be compared on three main things: availability of the ETFs you want to buy, in GBP or GBP Hedged terms; low fees on lump-sum purchases or automated regular investing plans; and solid regulation, authorised by a recognised authority such as the FCA (UK), the AMF (France), BaFin (Germany) or equivalent.

The broker in your financial ecosystem

Before choosing a specific broker, it's worth stepping back and looking at the bigger picture: how many accounts do you already have open across different banks or providers, and what role do you want this new broker to play alongside them?

A key question is whether you need a broker that also acts as your bank (with its own account number and sort code, a debit card, handling your salary and everyday spending) or whether you'd rather keep your day-to-day bank account separate from an investing account dedicated purely to your portfolio. Both approaches are valid: a combined account simplifies everyday management (one login, fewer transfers to track), while a clean separation between your everyday bank and your investing account makes it clearer where everyday spending ends and invested capital begins.

There's no universally "right" number of financial providers, but it's worth actively aiming for balance: too many providers (a main bank, several brokers, scattered secondary accounts) push up overall costs (multiple fees, duplicated charges) and add management complexity — more logins to remember, more statements to check, more chances of losing track of something. A single provider for everything (bank, investing account, emergency fund), on the other hand, concentrates operational risk: if there's a technical issue, a temporary account freeze, or trouble at the institution, your entire financial position can become temporarily inaccessible or exposed all at once.

A reasonable compromise for many investors: a main bank for everyday management (salary, spending, emergency fund) and a separate broker — even if it's part of the same banking group, but with a distinct investing account — dedicated purely to long-term investing. This keeps the number of providers in check without putting everything in one basket.

Tax wrapper: ISA, SIPP or GIA

For a UK investor, choosing the right tax wrapper has a significant impact on returns. A Stocks & Shares ISA shelters gains and dividends from Capital Gains Tax and dividend tax entirely, up to an annual allowance (currently £20,000, though allowances can change) — it's usually the first wrapper to fill before considering others, and there's no restriction on holding globally diversified ETFs like MSCI World trackers inside it.

A SIPP (Self-Invested Personal Pension) offers tax relief on contributions and tax-free growth, but locks the money away until at least age 55-57 (rising over time) — well suited to long-term retirement saving, less so for goals with a shorter horizon.

A GIA (General Investment Account) has no annual limit and no restrictions, but gains above the annual Capital Gains Tax allowance and dividends above the dividend allowance are taxable. Most investors use a GIA once they've used up their ISA allowance for the year, or for money they may need before retirement age.

Many investors combine an ISA (or SIPP) for tax-advantaged saving with a GIA for additional investing once allowances are used up. Always check which account types a broker offers before opening one, and check the current allowances and thresholds, since these can change.

Capital protection: compensation schemes and asset segregation

Two different mechanisms protect your capital at a broker, and it's important not to confuse them.

Asset segregation is the principle that the securities (ETFs, shares) you buy remain your legal property, held separately from the broker's own assets. If the broker goes insolvent, your securities don't form part of the insolvency proceedings and are returned to you (or transferred to another broker) — this is the most important protection mechanism for anyone investing in ETFs.

The Financial Services Compensation Scheme (FSCS) is a separate system that covers eligible cash and investments up to £85,000 per person per authorised firm if the firm fails — it's a backstop alongside, not a substitute for, asset segregation.

Always check that the broker is regulated by a recognised authority (as covered in the three main criteria) and that it clearly states how client assets are segregated: this should be public information, verifiable on the broker's website or in its terms.

Currency and FX costs

If you buy ETFs listed in a currency other than pounds (e.g. USD or EUR), the broker typically charges an FX fee, often not obvious at first glance because it's built into the exchange rate applied rather than shown as a separate cost. This fee typically ranges from 0.1% to 1% per transaction, depending on the broker.

The good news: most ETFs aimed at European and UK investors (including those tracking indices like MSCI World) are also listed in GBP on the London Stock Exchange, letting you avoid currency conversion entirely at the point of purchase, even though the underlying index holds dollar- or euro-denominated stocks. Always check the listing currency of the specific ETF you want to buy, and whether your broker charges FX fees even on GBP-listed ETFs.

Interface, support and operational reliability

Beyond cost and regulatory criteria, a few practical factors affect your day-to-day experience: how easy the app or web platform is to use (particularly for setting up automated regular investing), how responsive customer support is when something goes wrong, and how stable the platform stays during periods of high market volatility — when login volumes spike and some brokers, particularly newer ones, have previously shown slowdowns or outages right when they're needed most.

Before committing significant amounts, it's worth testing a broker with a small initial deposit: try opening the account, using the app, and see how long a first transfer takes to clear before moving your full capital across.

Some well-known examples in the UK

Among the brokers most widely used by UK investors for this type of strategy: Trading 212 (Stocks & Shares ISA + Invest account, zero platform fee, free regular investing), InvestEngine (ISA + GIA + SIPP, 0% platform fee on DIY portfolios, auto-rebalancing) and AJ Bell (ISA + SIPP + GIA, shares/ETF custody capped at £42/year). This is an informational, non-exhaustive list, not personalised advice: other valid brokers exist beyond this list.

Always compare several options and check current terms directly on each broker's website before opening an account.

Practical checklist before opening an account

• Check the availability of the ETFs you want to buy, in the currency and on the exchange you prefer.
• Compare fees on lump-sum purchases and automated regular investing.
• Check the regulation and the relevant supervisory authority.
• Check which account types are offered (ISA, SIPP, GIA) and which suits your situation best.
• Clarify how your assets are protected (asset segregation, FSCS compensation).
• Consider the broker's role in your overall financial ecosystem: how many providers you already have, and whether this broker simplifies or complicates your setup.