The UK brokerage market is mature, tightly regulated, and shaped by a mix of retail platforms, full-service wealth firms, execution-only shops, CFD and spread betting providers, and a handful of institutions that bridge into prime services. A client opening an account in Britain deals with a fairly standard set of decisions: which legal entity will hold the account, which products are available to a retail profile, what the true all-in costs look like after custody, FX, and tax frictions, how orders are routed under local conduct rules, and how cash and assets are protected if a firm fails. The details below sketch how the system works in practice so you can compare offers without being distracted by glossy feature lists.
Regulation and permissions in the UK
Authorised firms operate under the Financial Conduct Authority. The permission set on the FCA Register matters because it tells you whether a company can arrange deals, hold and control client money, provide advisory services, or operate a multilateral trading facility. Many brands trade under groups that include several entities; the name on your client agreement is the one that counts. Client money and custody arrangements are governed by the Client Assets Sourcebook, which sets segregation rules, reconciliation routines, acknowledgement letters with banks and custodians, and disclosure duties. A UK broker should be able to tell you which bank holds client money, which custodian holds UK and overseas securities, and how daily reconciliations are performed. That information should match the permissions listed for the firm you’re actually contracting with.
You can find and compare FCA regulated brokers by visiting Investing.co.uk.
Investor protection and what it really covers
The Financial Services Compensation Scheme provides a backstop for eligible claims when a regulated investment firm fails. Coverage is not a shield against market loss; it applies when the firm cannot return client assets or where there has been a failure of the investment business. It sits alongside the segregation regime described above. If you spread accounts across brands that share the same legal entity, the compensation limit applies once to that entity, not once per app icon. For most investors the segregation framework does the heavy lifting: assets are held off the broker’s balance sheet and reconciled daily, while client money sits in pooled trust accounts at approved banks. It is still worth reading the specific disclosures, because some firms operate on an “agent” model where securities are held in an omnibus account at a third-party custodian and voting or elective corporate actions are handled via that chain.
Execution-only, advisory, and discretionary service models
Execution-only brokers accept orders and do not tell you what to buy. Advisory brokers provide recommendations but leave final decisions to you. Discretionary managers make decisions and trade your account within a signed mandate. Fees, responsibilities, and complaint paths differ across those models. A platform may advertise research and model portfolios while still operating as execution-only; what matters is the client agreement and the service permissions, not the marketing tone. If you want autonomy, execution-only is the usual fit. If you prefer a human who will take responsibility for portfolio changes, discretionary management sits on a different fee line and a different standard of care.
Product menus and retail restrictions
A UK resident opening a standard retail account will usually see UK and international equities, ETFs, investment trusts, mutual funds, bonds where supported, listed options at some firms, and cash facilities. Retail leverage on contracts for difference and rolling spot forex is capped at levels set by conduct rules, with negative balance protection and standardised risk warnings. Sale of certain high-risk instruments to retail clients is restricted. Spread betting is widely offered and is a derivative with its own tax treatment; it is not the same as owning the underlying share and carries financing and spread costs that matter if you hold beyond the same day. If you plan to trade US-listed options or smaller overseas markets, check access up front. A number of UK brokers support US options with per-contract charges and an options suitability process; others do not. Bond access varies more than people expect, with many platforms limiting primary access and offering only a small secondary list to retail.
Account wrappers: ISA, SIPP, and unwrapped accounts
Brokerage accounts in Britain commonly sit in three containers. A general investment account is the unwrapped baseline and exposes gains and income to standard taxation. A stocks and shares ISA shelters eligible investments from capital gains tax and income tax within the wrapper; eligibility rules cover instruments rather than strategies, so check whether a given ETF or foreign listing qualifies. A SIPP gives a retirement saving route with its own contribution limits and drawdown rules; the investment platform that hosts the SIPP may differ from the brand you see in the app. Junior ISAs and Junior SIPPs mirror these structures for children. Fees, available instruments, and corporate action handling can vary between wrapper types on the same platform, so it is sensible to read the separate charges and services document for each.
Pricing: the real bill, not the headline
Most UK platforms present a headline commission and then layer custody, platform, fund dealing, foreign exchange, and add-on data costs. Custody may be a percentage of assets with tiering or a flat fee per month. US and euro trades typically incur an FX conversion spread that can exceed the nominal commission on small tickets. Some firms let you hold foreign currency sub-balances so you convert once and trade many times; others convert per trade by default. Options and international venue access often trigger exchange and regulatory pass-through fees. Dividend processing on certain ADRs attracts depositary charges. Add periodic charges that are easy to miss: paper statement fees, phone dealing charges, out-of-hours dealing premiums, or exit and transfer-out fees. To compare apples to apples, map a year of your intended behaviour—number of trades, average size, foreign versus domestic mix, cash idle time—then tally commission, custody, FX, and any likely financing or borrow lines. That exercise tends to change which platform looks “cheap.”
UK market frictions many newcomers overlook
Buying most UK-incorporated shares on a UK venue attracts stamp duty or stamp duty reserve tax; ETFs and AIM-quoted companies have different treatment, and certain transactions are exempt. A small Panel on Takeovers levy can apply above a transaction threshold. Settlement cycles for cash equities and the availability of guaranteed same-day withdrawals from client money are operational details that differ by platform and by the banks they use. If you routinely move funds in and out, read the cut-off times for same-day CHAPS and the holding periods applied to card deposits before funds are available for withdrawal. Corporate actions are usually processed on a “best efforts” timetable via the custodian chain; elective events can carry administration fees and earlier internal deadlines than the issuer’s public date. Fractional shares are common on retail apps but bring nuances for voting and for how mandatory reorganisations are handled when a position rounds down.
Order handling, best execution, and payment routes
UK rules prohibit payment for order flow, which removes one source of conflict common elsewhere. Brokers still have choices to make about where to send your order. London Stock Exchange order books, systematised internalisers, and overseas venues each come with different liquidity profiles and costs. A good firm’s order handling policy should be readable and should state how it weighs price, costs, speed, likelihood of execution, and settlement. Time-in-force settings matter if you place good-till-cancelled orders; not every venue treats GTC identically, and some platforms translate your instruction into day orders that renew. If you trade US stocks from a UK account, understand how your broker routes to US venues and whether your order participates in opening and closing auctions, which often drive a large share of daily volume.
Cash, interest, and securities lending
Client money earns interest at the bank where it is placed. Many platforms share part of that with clients after a spread; others keep more. The rate may be tiered by balance and can change without much notice. A growing number of brokers run fully paid securities lending programmes that allow them to lend shares you hold and share a portion of the fee income with you. That carries voting and recall consequences and should be opt-in with a clear disclosure of how collateral is held and how revenue is split. Margin accounts charge interest based on a benchmark plus a platform spread. If you expect to hold leveraged positions for more than very short periods, this spread can dominate the cost line and is more important than a small headline commission difference.
Platform tools and data that actually get used
Most investors and active traders use only a small set of functions: clean charts with daily and weekly views, reliable alerts, a position page that shows cost basis and lots, a corporate actions feed that arrives in time to act, a simple earnings or event calendar, and exports that load into tax software. Level 2 market data for UK shares and options analytics can be helpful for specific methods but live behind extra data licences on many platforms. If you need US options chains, check whether your broker provides live OPRA data or a delayed stream, and what the monthly vendor fee looks like. If you care about automation, API stability and rate limits matter far more than marketing claims; read the technical docs before you assume you can replicate a workflow you saw elsewhere.
Tax reporting and statements
A UK broker should provide consolidated tax certificates and dividend schedules that align with the tax year, not just the calendar year. For US holdings, a correctly completed W-8BEN held on file reduces withholding on eligible dividends under treaty rates. If you hold Irish-domiciled ETFs or funds, withholding and reporting takes a different path. ISAs remove most of this from the tax filing workload but do not remove a client’s need to understand distributions and corporate actions. The simplest way to test whether reporting will suit you is to ask for sample statements and a sample tax certificate before you fund in size, then check whether the format matches your accountant’s software rather than assuming it will.
Options, futures, and shorting equities
Retail access to listed options exists on several UK platforms but is less uniform than equity access. You will be asked to complete an appropriateness assessment and to select approval levels that match covered and uncovered strategies. Assignment handling, margin treatment for spreads, and early exercise around ex-dividend dates are points worth confirming in writing. UK retail access to on-exchange equity shorting is limited; many platforms route short exposure through CFDs, which introduces overnight financing and different tax treatment. For larger or more technical books, a move toward an institutional-style broker or prime broker opens inventory and cross-product margining but brings higher minimums and different onboarding checks.
International access and FX
UK investors frequently buy US-listed securities and European names. The FX conversion method used by your broker will shape your costs. Some firms apply a fixed markup on the interbank rate per trade; others let you convert a lump sum at a tighter spread and hold it in a dollar or euro sub-account. Corporate action proceeds and dividends may arrive in local currency and be auto-converted unless you’ve elected to keep foreign currency balances. If you plan to collect foreign dividends, read how the platform handles rebates and tax credits, whether it supports relief at source for certain markets, and whether small depositary bank fees on ADRs are passed through.
Operational resilience and support
Outages happen. The difference across firms is preparation and communication. A UK broker with good hygiene publishes planned maintenance windows, runs a public status page, and provides a phone dealing number staffed by humans who can place or close positions after a brief identity check. If your method relies on pre-market or auction participation, ask specifically how to place those orders by phone during an app outage. Settlement exceptions and corporate actions require specialist teams; response times from those teams during busy seasons tell you more than a sales page ever will. Before moving serious assets, it is sensible to run a small deposit, a small withdrawal, and a test corporate action election to see how the process works end-to-end.
Due diligence you can complete in an afternoon
Confirm the exact legal entity name and firm reference number on the FCA Register and make sure the permissions match the service you expect. Read the client assets disclosure to see where cash and securities are held. Scan the order execution policy and the charges document, including FX and inactivity lines. Ask whether the platform supports foreign currency sub-accounts, whether it runs a securities lending programme and on what terms, and how interest on client money is shared. Check sample statements and sample tax documents, not just screenshots. If any answer is vague, assume the operational experience will be the same and choose a different provider.
Picking a fit without guesswork
Write down what you actually do: monthly ETF purchases into an ISA, periodic stock selection in a general account, occasional US options, or short-term trades using CFDs or spread bets. Map that activity to the products each platform supports, then price a realistic year including FX. If your plan leans on US markets in size, place more weight on FX treatment, access to opening and closing auctions, and US tax handling. If your plan leans on UK small caps, place more weight on settlement reliability, corporate action handling, and an order ticket that supports auctions properly. If you expect to hold significant cash, the interest-sharing policy matters more than a small commission tweak. Open accounts at two firms if you must, run both for a month with modest balances, and keep the one that makes the dull parts—funding, statements, and corporate actions—boringly reliable.
Closing note
The UK market gives private clients a wide set of choices, but the differences that matter are not hard to measure. Safe custody under clear permissions, an execution policy you can read without guesswork, a fee schedule that matches your actual behaviour, stable tools, and support that answers when systems wobble—put those at the front of your checklist and the decision becomes much simpler.