How to choose an investment platform: a neutral checklist

Start with the company, not the app

An investing app or website is a brand. Your account is opened by a specific company, licensed by a specific regulator, and one brand often uses different companies for clients in different countries. Find the legal name of the company that would hold your account in the client agreement, then look it up in the regulator’s own register; our guide on how to check a broker’s licence shows how, step by step. We do not recommend platforms in this guide — the checklist works for any of them.

1. Licence and protection

• Is the company authorised for what you will do — buying and holding shares and ETFs for you — and not only to give advice or introduce clients?
• Which investor compensation scheme covers that company, and up to what limit? The UK’s FSCS, for example, tells investors to check that the provider is authorised and that the activity is regulated, and to “Ask your firm to confirm that the activity they are carrying out for you is a regulated activity and FSCS protected.”
• If the company is a US broker-dealer, is it a SIPC member? SIPC treats a non-US citizen with an account at a member firm the same as a US customer, up to $500,000 including $250,000 for cash. Our guide on investor compensation schemes explains what such schemes never cover.
• Who keeps your investments (the custodian), and are they held in your name or in a pooled account?

2. The real cost of one trade

Add everything up for the order size you will actually use:

• commission per order — fixed, percentage or per share — and any minimum charge;
• currency conversion — the fee or exchange-rate margin when you buy foreign shares, and again when you sell and withdraw;
• spread on the share or ETF;
• custody, account or inactivity fees, charged monthly or yearly;
• the fund’s own expense ratio if you buy an ETF.

On small, regular amounts, a fixed monthly fee or a minimum commission can cost more than every percentage fee combined. Our guide to ETFs works through an example in plain numbers.

3. Markets and products

• Which exchanges can you reach: US, European, your local market?
• Do you buy real shares and ETFs, or contracts that follow their price? ESMA, the EU securities regulator, warned that “derivatives on fractions of shares are not corporate shares”. Our guide on fractional shares covers the difference.
• If you buy fractions, can you move them to another platform? ASIC’s Moneysmart notes: “You may not be able to transfer your investment to another platform in the same way that you could transfer directly owned shares.”
• Are bonds or sukuk available if you want them?

4. Money in and out in your currency

• Which deposit methods work where you live — local bank transfer, card, mobile money — what each costs, and in which currency the account is kept.
• Which withdrawal methods exist, what they cost and how long they take; withdrawals should go only to an account in your own name.
• Can you keep a balance in US dollars, or is every deposit and withdrawal converted?

5. Tax forms and statements

• For US shares, expect to fill in Form W-8BEN for the platform. The IRS instructions are clear on where it goes: “Do not send Form W-8BEN to the IRS. Instead, give it to the person who is requesting it from you.” Our guide on dividend withholding tax explains why it matters.
• Does the platform give yearly statements of dividends, tax withheld and sales that your own tax authority will accept?

6. Leaving later

Check the cost of transferring your holdings out, or of closing the account, before you deposit. Holdings that cannot be transferred have to be sold, which can mean fees and tax on any gain.

Warning signs

• No legal company name or licence number on the website or in the agreement.
• A licence from one country while you are served by a company elsewhere.
• Promised returns, pressure to deposit quickly, or requests to pay into a personal account or a crypto wallet.