This year I did a bit of a deep dive on several UK friendly brokers to figure out which one(s) to switch to in the world of interest rates greater than 0%.
Of course they never tell you up front what the problems are, but you find out eventually, so familiarity breeds contempt. I’ve been with a big bank broker dinosaur for a long time and boy do they screw things up for me a lot.
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I have less experience of the others so I know they will screw something up, but I don’t know what yet. Feel free to slate them in the comments section, I’m sure they deserve it!
Aside from technical features, it is sort of interesting to consider what psychological biases sticking these brokers in your face on a daily basis will present. Obviously they want you to trade a lot rather than make money and have various stimuli built into the platforms to trigger that market monkey brain overtrading instinct.
They have various restrictions on what you can trade. I’ve picked on a set of Uranium related tickers as a topical example.
Trading 212
+ Gameified sign up process is quick and easy.
+ Simple interface, both web and phone app seem well made.
+ “Free” trades! 0.15% currency conversion fee though!
- Comes pre populated with meme stocks, a social feed, and notifications when some random stock pops or drops presenting you with a BUY button - what could possibly go wrong?
+ Daily interest on full cash balances GBP 5% USD 5.1% CAD 3.50% (via a QMMF) which is better than all UK savings accounts but unclear if that is guaranteed to FCSC £85,000 limit. “Quality” Money Market Fund being the operative word, but it could still blow up. Last time I got these rates it was with IceSave in 2008 and I did need the FCSC bailout to get my money back, so I have PTSD.
+ Does pay dividends
- Doesn’t tend to show the bid ask spread. That’s a bit sus.
+ Can lend your shares to shorts who want to lose money and pay you for interest on it.
- Can’t trade TQQQ SOXL etc. “because it is a leveraged ETF … and they cannot be traded on the platform.”
+ Has Wisdom Tree commodity ETFs including triple leveraged.
+ Can trade a variety of bitcoin and meme related stocks because those are obviously safer.
+ Can trade Kazatomprom, Yellowcake and various Canadian TSX listed Uranium miners.
- Can’t trade Sprott Physical Uranium ETF (U.UN)
- Has a GPT like chat bot AI assistant which I’m not convinced is quite up to date with their current policies.
+ Can export transactions as CSV
+ BETA API can place orders, allegedly but I haven’t tried to evaluate!
T212 seems convenient as a piggy bank and/or currency changer especially for smaller accounts and simple trades.
It is a small but growing business: with 165K customers in 2022, £41M profit, so they extract ~£250 profit/year out of each customer somehow and the directors earn a pretty penny. Recently they turned over a lot of the directors, which was not explained. I presume they are not going broke unless they completely fake their accounts or something haha… still not sure I would trust this with large sums. You can read their accounts to make up your mind I guess:
https://find-and-update.company-information.service.gov.uk/company/08590005/filing-history
TradeZero
- Day trading oriented, so it might as well be called Trading *to* Zero because you will just lose money over time and I certainly have in this account. The charting defaults to 1 min timeframe and guess what happens when you look at that.
+ Can trade TQQQ etc. and most other US listed tickers I’ve ever tried with no restrictions.
+ Can short just about anything except stocks under a buck or two but you’d be foolish to do that anyway.
+ 6x leverage for day trading, 2x overnight.
+ Has stops, GTCs, limits, range trades, market close orders.
+ Long trades are mostly $1/side unless you limit order lots of 200 shares outside the market price, then free.
Shorts are more $5 + varying fees. It does add up eventually for stupidly frequent trades.
+ Has after hours trades.
+ Can export transactions as CSV.
- No dividends.
- No interest.
- App interface can be buggy and prone to fat finger trades.
- Web interface is pretty simple. I’ve had some annoyances with connecting to the server on occasion.
- Web/app clients can’t trade options, have to use windows emulation for desktop client on Mac. :/
HSBC UK Invest Direct - The Boring Big Bank Broker
I’ve been with this for a long time. It sucks but maybe if you need to Keep It Simple Stupid for long term holds and want some guardrails and no foot guns it’s not all bad:
+ Flat but expensive dealing fees $29.95/side, OK for large orders, exchange rate seems sensible here but NOT on the currency accounts in the main bank.
- UGLY but simple Web 1.0 interface, no app.
- Limits and Market Orders only, no leverage, no margin.
- No after hours.
+ Can trade YCA.L UEC CCJ and various other US listed Uranium miners but not KAP.L, so go figure.
- Can’t trade various tickers or ETFs like anything bitcoin related, US REITs, Chinese ADRs or anything else they decide is “dodgy”. Maybe that is a good guardrail, maybe it isn’t.
- Tends to be slow to add new listings IPOs etc.
- Stock reverse splits and symbol changes can take weeks to process while you can’t do anything which means you can get stuck in a position in a shitty stock! I’ve had profits round trip to losses on me because of this once, so that’s an extra gotcha for shitcos here… :P
+ Can trade gilts (aka BritCoins?) if you’re into that for £39.95 / side!
- Still no interest on cash balances :P
+ Does pay dividends
- Hideous PDF reporting format that makes tax time a real chore.
Limited, but you can’t get into too much trouble with these limitations, at least, if you don’t want enough rope to hang yourself. Probably not gonna go broke or at least will get a bailout if it does.
Expect to see this quite frequently when trying to log in:
Sorry, our service is temporarily unavailable. Please try again later or contact Customer Services on 03456 08 08 48.
HSBC Canada
+ Surprisingly completely different to HSBC UK, just to prove that the UK sucks for brokers.
+ Can trade U.UN and most US and Canada tickers.
+ Web 2.0 interface
+ Stops, GTCs
- $25 quarterly fee
Utterly idiotic form filling is required periodically and God help you if you change your address, because they can lock you out of your account for months on end if they don’t get the forms they want to wind their way through their bureaucracy on time.
Interactive Brokers UK
+ The Professional Choice.
- You have to pass an options trading quiz in the arduous sign up process or you won’t be allowed to do options. Buying calls seen as “tier 2”.
- You have to ask special permissions to trade levered ETFs, foreign stocks, various higher tiers of risky options trades, futures, and so on.
+ Does pay interest, but not on the first 10K and with some complicated sliding scale on the rest depending on your balance topping out at 4.733% GBP / 4.830% USD but works out to not great for smaller accounts < 100K.
- Has an entire Multigenerational Family of Ultra Complicated Interfaces with many options:
- Trader Workstation which is some klunky old Java App for desktop.
+ Phone App which is relatively useable, seems to inline TradingView charts.
+ Web App not too bad either, presents the daily propaganda news, fundamentals and ESG credentials for your Wall St Analyst approved serious companies.
+ Option strategy wizard is … spooky! maybe clever dunno. Would be nice if it just automatically copy traded Nancy Pelosi LEAP calls.
- Can trade the Wisdom Tree commodity ETFs, although that is at $4/side.
+ Algorithmic trading API !!
They haven’t screwed anything up majorly for me yet, so that’s my preferred option!
Alas the charting is all fairly horrible in all brokers and thus TradingView still has a reason to exist.
If anyone wants to share their experiences with bad brokers go right ahead, because these don’t get written up nearly enough IMHO.
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