Exchange-traded funds, or ETFs, have become one of the most popular ways for everyday investors to build a diversified portfolio without needing to pick individual shares. An ETF pools money from many investors to buy a broad basket of assets — often tracking a market index — trading on an exchange throughout the day just like an individual share. For platforms, ETFs are a bread-and-butter product, but the way they're charged for can vary significantly, which makes comparing platforms specifically for ETF investing worthwhile.
1. How platforms charge for ETF investing
Some platforms apply a percentage-based custody fee to your whole portfolio, which can work out expensive for a large ETF holding, since the fee keeps scaling with your balance. Others charge a flat monthly or annual fee regardless of portfolio size, which tends to favour larger ETF investors. On top of custody fees, check the specific dealing charge for buying and selling ETFs, since some platforms charge less for fund trades (including ETFs) than for individual shares, or offer discounted regular investing plans.
2. Regular investing plans
Many platforms offer a "regular investing" service, letting you set up an automatic monthly purchase of chosen ETFs, often at a reduced dealing fee compared with a one-off trade. If you're planning to invest a set amount every month — a common, disciplined approach known as pound-cost averaging — this feature can meaningfully reduce your overall trading costs over time.
3. Range of ETFs available
Not every platform offers the same breadth of ETFs. If you have a specific index, sector, or region in mind, check the platform actually lists it before assuming coverage. Broader platforms tend to offer wider ranges, including more specialist and international ETFs alongside the most popular, broad market-tracking options.
4. ETFs inside an ISA or SIPP
ETFs can typically be held within a Stocks and Shares ISA or a SIPP, keeping any growth or income tax-advantaged. If you're building an ETF portfolio for the long term, it's usually worth prioritising the tax wrapper first and then checking that your chosen platform offers a good ETF range within that specific account type.
5. Ongoing charges figure (OCF)
Separately from the platform's own fees, every ETF carries its own ongoing charges figure, deducted directly from the fund rather than charged by your platform. A broad, popular index-tracking ETF typically has a very low OCF, while more specialist or actively managed ETFs can charge considerably more. Always check the OCF for the specific ETF you're considering, since this affects your return regardless of which platform you use.
6. Frequently asked questions
Are ETFs cheaper to trade than individual shares?
Often yes, particularly through a regular investing plan, though this varies by platform. Compare the specific dealing charges for funds versus shares on your shortlisted providers.
Can I hold ETFs in a Stocks and Shares ISA?
Yes, ETFs are commonly held within ISAs, keeping any growth and income free from tax, subject to your annual ISA allowance.
What's the difference between an ETF's ongoing charges figure and my platform's fee?
The ongoing charges figure is deducted by the fund itself and applies regardless of which platform you use, while the platform fee is a separate charge for holding and trading through that specific provider.
Do all platforms offer a regular investing plan for ETFs?
Not all of them, and where it is available, the discount and minimum investment amount can vary. Check this specifically if pound-cost averaging into ETFs each month is part of your plan.
7. Conclusion
Choosing a platform for ETF investing comes down to comparing custody fees against your expected portfolio size, checking for a discounted regular investing plan if you'll be contributing monthly, and confirming the specific ETFs you want are actually available. Pair this with the right tax wrapper — an ISA or SIPP — to keep as much of your return as possible.
