Investment platform

But what exactly is an investment platform?

It’s an administrative service that provides a solution to the ordeal of a long and complicated financial procedure. Investors often tend to buy stocks or shares from a wide range, in order to achieve adequate diversification, which means to spread and mitigate the risk of losses. But this results in piles of documentation. And that is why an investment platform is the solution to the aforementioned problem, as not only does it offer a simplification of the investment process, but often involves discounts for participants. These fund platforms are places online where stocks and shares of companies,  ideas, etc. can be bought as well as managed. So to put it shortly, investment platforms are the place where you can manage all of your different investments, without compromising on diversity. 

Fund platforms’ vocabulary can be puzzling to amateurs, so let’s tackle down the basics: fund supermarkets and wrap accounts. The fund supermarket name derives from the similarity to malls, as it is a place where everything is stored and stocks can be bought cheaply - all online. Apart from existing on a website, some of them are also available as mobile applications for the customer’s convenience. But there is a growing number of options to fit different needs and aims  and we advise our readers to look around before deciding to stick with one or the other platform. Wrap accounts on the other hand, also referred to as tax wrappers, are the means to manage one’s financial plans, operations, and the investments portfolio. Many financial institutions provide such services for a small charge. They ameliorate the process of investments, as the clients are provided with all of the consolidated documentation (tax statements etc), and also because the clients have only one counterpart to interact with while still diversifying the risk, which enhances both  the safety and accessibility of the investments. Examples are stocks and shares: ISAs, Lifetime ISAs, SIPPs, that is, self- invested personal pensions.

But how can I choose the platform that is best for me?

Luckily for beginners in this area of finance, lately automated investment markets have emerged. They are referred to as robo-advisers, and examples are Nutmeg or evestor. Their charges are cheap, and they offer a lot of advice for new investors. But if one prefers an older and more established platform, some of them also introduced digital advisory services to their customers, although in majority, they are less engaging (they are often called DIY websites; and the name indicates that the customers can choose all of their investments by themselves. It is an option recommended for experienced users).

There are a variety of things any user can invest in. It is worth remembering that the area one chooses should be compatible with answers to a few questions, such as “does the project’s agenda align with my personal vision?”, “what is the human capital of the project?”, “was the project vetted?”, “do I prefer to buy company shares, or invest in a wide range of funds?”, etc. You might want to check whether  the platform has a barrier entry and if so, how high or low is it set. Some platforms offer a simple and clear division of potential investments, including the level of risk (for example, low, medium, high) - that is a good feature if you are only getting into the stock market. There are platforms such as Fidelity offering a full service (for instance, graph simulations of expected returns), and those that reduce their activities to minimum, and hence giving the customer as much freedom and privacy as possible. And thus, the internet offers possibilities to back financially projects involving high technology, environmental or cultural projects, and visionary inventions. 

Ultimately, the most important factor is your comfort and satisfaction, so after having done your research - trust your gut when choosing the investment platform for yourself. And please do be aware that this article only involves basic information and in no way is it suggesting a particular strategy. If the reader wants to proceed with any kind of action, they should seek independent advice best suited to their circumstances and preferences. Let us know if you found answers to your questions in the article!