What is a broker? Investment platforms explained
What you'll learn
Understand what an investment platform is and what to look for when choosing one.
An investment platform (often called a broker) is the shop where you buy, hold and sell investments. It is not the investment itself. You open an account, add money, and use it to buy things like index funds or shares, which the platform then holds safely on your behalf.
Most people access an ISA or pension through a platform. The platform handles the admin: dealing, statements, dividends and tax wrapper paperwork.
What you pay
Platforms make money from fees. The main ones:
| Fee type | What it is | Watch for |
|---|---|---|
| Platform fee | Yearly charge to hold your account | Percentage vs flat fee |
| Dealing fee | Charge per buy or sell | Adds up if you trade often |
| Fund charge | Cost of the fund itself (not the platform) | Separate from platform fees |
| Exit / transfer fee | Charged to leave | Some now waive this |
A percentage fee can be cheaper on a small pot; a flat fee can be cheaper on a large one.
What to look for
- Total cost for your likely pot size and trading habits, not just one headline number.
- FCA authorisation and clear client-money protection.
- The wrappers you need (ISA, pension) and the investments you want.
- A usable app or website, plus how easy it is to transfer in or out.
This lesson does not name a "best" platform. The right one depends on your pot, your wrappers and how often you trade.
Key takeaways
- A platform (broker) is where you buy and hold investments - it is not the investment.
- Fees come in layers: platform, dealing, fund and exit charges.
- Percentage fees suit small pots; flat fees often suit large ones.
- Check FCA authorisation, the wrappers you need, and the total cost for your situation.
Illustrative only: rough yearly platform cost on a £20,000 pot at three made-up fee levels. Real fees and structures vary widely. Your actual cost depends on the platform and your holdings, and this is not a forecast.
Frequently asked questions
Is a platform the same as the investment?
No. A platform is the shop and the safe-keeping. The investment is what you buy through it, such as an index fund. One platform can hold many different investments.
Is my money safe on a platform?
Authorised UK platforms ring-fence client assets and most are covered by the FSCS up to a limit if the firm fails. It is worth confirming a firm is FCA-authorised and reading its protection terms before committing.
Can I move to a different platform later?
Yes. You can transfer holdings between platforms, often "in specie" (without selling). It can take time and some platforms charge exit fees, so check before you start.
General information, not financial advice. The value of investments can fall as well as rise, and figures and rules can change; check the current position before acting.