Best ETF Brokers in 2025

What is an ETF or Exchange Traded Fund?

An ETF (Exchange Traded Fund) is a financial product that allows you to invest in a basket of assets in a single transaction. It is an index fund traded on the stock exchange, the objective of which is to replicate the performance of a benchmark index, such as the FTSE 100, the S&P 500 or the MSCI World.

Unlike traditional actively managed funds, an ETF follows passive management: it replicates the composition of the index it tracks, with lower fees compared to active funds. It is continuously tradable on the markets, just like a share, which allows investors to buy or sell their shares at any time of the trading day.

ETFs are very popular due to their numerous advantages:

• Immediate diversification: By purchasing an ETF, the investor positions themselves on several assets in a single transaction.
• Reduced fees: ETF management fees are generally much lower than those of traditional investment funds.
• Accessibility: It is possible to invest in ETFs with a modest amount, and some brokers offer fractional purchases.
• Transparency: The composition of ETFs is generally accessible in real time, allowing investors to know exactly what they are investing in.

Advantages of ETFs

ETFs offer instant diversification: a single transaction allows you to invest in a set of assets reflecting the composition of the tracked index. For example, an ETF replicating the FTSE 100 allows access to the 100 largest companies in the UK.

What is an ETF broker?

An ETF broker is a financial platform that allows investors to buy and sell exchange-traded funds (ETFs). Depending on your investment strategy and risk appetite, there are two main ways to invest in ETFs through brokers in the UK:

• Brokers offering direct ETF investment through accounts such as a Stocks & Shares ISA, General Investment Account (GIA), or a Self-Invested Personal Pension (SIPP).
• Brokers offering ETF CFDs, which allow you to speculate on ETF price movements without actually owning the underlying assets.

Here’s a comparison between these two types of ETF brokers:

Which broker type should you choose?

• If you're a long-term investor aiming for passive wealth building, choose a broker that lets you invest directly in ETFs through tax-advantaged accounts like a Stocks & Shares ISA or a SIPP.
• If you're looking for short-term speculative trades with leverage, CFD brokers may appeal — but they come with significantly higher risk.

How to choose an ETF broker?

Choosing an ETF broker is an essential step for investing effectively in the stock market. There are brokers that allow you to buy ETFs directly and brokers that offer CFDs on ETFs. Each type of platform caters to different investment strategies. Here are the criteria to consider to make the right choice.

1. Accessibility to ETFs

Not all brokers offer the same access to ETFs. It is important to check:

• Available ETFs: Some brokers offer a wide selection of physical ETFs, while others only offer CFD's on ETFs.
• Access to international ETFs: Some brokers allow you to invest in European and US ETFs, while others restrict their offering to certain geographical areas.
• Eligibility for a Stocks and Shares ISA: If you want to optimise your tax situation, favour a broker offering ETFs compatible with a Stocks and Shares Individual Savings Account (ISA).

2. Brokerage and Management Fees

Fees directly influence the profitability of your investment. Here are the main costs to compare:

• Order fees: commission applied to each purchase or sale of an ETF. Some stock brokers offer free orders, while CFD brokers often apply a spread (the difference between the purchase and sale price).
• Management fees: levied annually by the ETF issuer (typically between 0.05% and 0.50%).
• Inactivity fees: some brokers charge fees if no order is placed over a given period, particularly CFD trading platforms.
• Conversion fees: for ETFs listed in foreign currencies, there may be exchange fees on transactions.

3. Platform Ergonomics and Tools

Whether you are a beginner or experienced investor, an intuitive and high-performance platform is essential. Check for:

• The quality of the research tools and filters to easily find ETFs.
• The existence of a mobile application to manage your investments in real time.
• The availability of advanced charts and technical indicators for active investors, particularly those trading CFDs.

4. Account Type and Taxation

The type of investment account offered by the broker will directly affect how your ETF profits are taxed:

• Stocks & Shares ISA: This tax-efficient account allows you to invest in ETFs without paying any capital gains tax or dividend tax, up to the annual ISA allowance (£20,000 for the 2024/2025 tax year). Ideal for long-term passive investing.
• General Investment Account (GIA): Offers full access to UK and international ETFs. Gains are subject to capital gains tax (above the £3,000 CGT allowance) and dividends are taxed after the £500 dividend allowance.
• Self-Invested Personal Pension (SIPP): Suitable for retirement savings. Contributions benefit from tax relief, and investment growth is tax-free, but withdrawals are taxed as income after age 55 (57 from 2028).
• CFD trading account: Used for leveraged ETF trading. Profits are usually taxed as capital gains, but CFDs do not benefit from ISA or pension tax advantages.

Choose your account type based on your goals (tax-free growth, retirement savings, or short-term trading).

5. Leverage and Risk Management

If you want to use leverage, only brokers offering ETF CFDs will allow you to amplify your positions (generally with a leverage of x2 to x5). However, the risk of loss is increased, as leverage can also multiply losses. Make sure your broker offers:

• Negative balance protection to avoid losing more than your initial capital.
• Stop-loss and take-profit orders to manage your positions effectively.

6. The Quality of Customer Service

Good customer service is essential, especially for active investors. Before opening an account, find out about:

• Available contact methods (phone, live chat, email).
• Support availability (opening days and hours).
• The quality of educational resources offered (guides, webinars, tutorials).

7. Security and Regulation

Only use brokers that are properly regulated to ensure the safety of your assets and compliance with UK law. In the UK, the main regulator is:

• The Financial Conduct Authority (FCA) – ensures that brokers operate transparently and safeguard client funds.

Other reputable international regulators include:

• BaFin in Germany
• SEC and FINRA in the United States
• ASIC in Australia

You should also check whether the broker participates in the Financial Services Compensation Scheme (FSCS), which protects client funds up to £85,000 in case of insolvency.

Which ETF Broker is Best for Beginners?

If you're new to ETF investing, choosing the right broker is crucial for building confidence and making your first steps simple and cost-effective. The ideal broker for beginners should offer:

• A user-friendly, intuitive platform for easy navigation
• Low trading fees and no hidden charges
• Access to a wide range of low-cost index ETFs
• The ability to invest via a Stocks & Shares ISA or SIPP for tax benefits
• Responsive customer service based in the UK or available in English
• Educational resources like tutorials, webinars, and demo accounts

Before selecting a broker, beginner investors should also consider their investment style:

What are the different types of ETFs available in the United Kingdom?

In the United Kingdom, investors have access to a wide range of ETFs allowing them to invest in different assets and strategies. Here is a summary table of the main types of ETFs, with their description and some popular examples among British traders.

How to Invest in ETFs Online in the UK

Investing in ETFs online is a simple and accessible method for diversifying your investment portfolio. Here are the essential steps to start investing effectively in the UK.

1. Choose a Suitable Broker

The first crucial choice is that of the broker which will allow you to buy ETFs. To do this, you must compare several criteria:

• Brokerage fees: Prioritise platforms with low fees.
• ETF Offer: Make sure the broker offers a wide selection of ETFs (equities, bonds, sector, thematic, etc.).
• Account Type: Check if you want to invest via a general investment account for unrestricted access to global ETFs.
• Security and Regulation: Opt for a broker regulated by the FCA (United Kingdom) or other recognised authorities.

2. Opening an Investment Account

Once you have chosen a broker, you will need to open an account by providing some documents:

• Proof of identity (identity card or passport).
• Proof of address (utility bill, tax notice).
• Bank details (RIB) for deposits and withdrawals.

Account validation can take a few hours to a few days, depending on the broker.

3. Deposit Funds into Your Account

Before buying ETFs, you need to fund your account by making a deposit. Depending on the broker, you can deposit funds via:

💳 Bank transfer (the most common method).
💰 Bank card (faster but sometimes with fees).
📱 Electronic wallets (PayPal, Skrill, etc., depending on the platform).

4. Selecting ETFs to Buy

It is important to choose ETFs that are suited to your strategy. You can invest in:

• Index ETFs (MSCI World, S&P 500, FTSE 100) for a passive and diversified approach.
• Sector ETFs (technology, healthcare, renewable energy) to target a trend.
• Bond ETFs for a more defensive allocation.
• Dividend ETFs to generate passive income.

5. Placing a Buy Order

Once you have chosen your ETF, you need to place a buy order. There are several types of orders:

• Market Order: Immediate purchase at the current price.
• Limit Order: Purchase only if the ETF reaches a defined price.
• Stop Order: Purchase triggered when the price exceeds a certain threshold.

6. Monitoring and Adjusting Your Portfolio

Investing in ETFs requires regular monitoring to ensure your portfolio remains aligned with your goals. To do this:

• Analyse performance: Track the performance of your ETFs via your broker or tools like Google Finance.
• Rebalance your portfolio: Adjust the allocation of your assets if one sector becomes too dominant.
• Invest Regularly: Adopt a Dollar Cost Averaging (DCA) strategy by buying ETFs at regular intervals to smooth out the risk.

What fees are involved with an ETF broker?

Investing in ETFs involves fees that can impact the profitability of your portfolio. These costs vary depending on the type of account, the target market, and the investment method. Here are the main fees to anticipate with concrete examples.

1. Brokerage fees

Brokerage fees are applied to each order to buy or sell ETFs. They can be fixed (example: £1 per order) or proportional (example: 0.1% of the amount invested). Some brokers offer commission-free ETFs under certain conditions, such as a scheduled purchase or one limit order per month.

Example of ETF brokerage fees

Buying an ETF for £1,000 with fees of 0.5% → £5 in fees.

Buying the same ETF with a broker offering one free order per month → £0 in fees.

2. ETF Management Fees

These fees are directly levied by the ETF issuer and slightly impact the fund's performance. They are expressed as an annual percentage of assets under management.

Example of ETF Management Fees

• A global ETF with 0.40% management fees results in an annual cost of £4 for every £1,000 invested.
• An S&P 500 ETF at 0.07% only costs £0.70 for every £1,000 invested over a year.

3. Currency Conversion Fees

If the ETF is listed in US dollars (USD) or pounds sterling (GBP) and the account is in euros, exchange fees apply to buying and selling. These fees vary between 0.1% and 1% depending on the platform.

Example of currency conversion fees

Buying a Nasdaq-100 ETF in dollars for £2,000, with an exchange fee of 0.5% → £10 fee.

4. Inactivity Fees

Some brokers charge fees if no orders are placed for several months. These fees are usually levied after 6 to 12 months of inactivity and may be fixed or proportional to the account balance.

Example of inactivity fees

• An account inactive for 1 year with a fee of 10 per month results in a cost of 120 over the year.

5. Withdrawal fees

Some platforms charge fees to withdraw funds to a bank account. These fees can be fixed (example: 5 per withdrawal) or proportional (example: 1% of the amount withdrawn).

Example of withdrawal fees

A withdrawal of £500 with a fixed fee of £5 results in a cost of 1% of the amount withdrawn.

6. Spreads and overnight fees (for ETF CFDs)

If you trade ETF CFDs, you need to consider:

• The spread: the difference between the buying and selling price, which can be fixed or variable.
• Overnight fees: applied when you keep a leveraged position from one day to the next.

CFD ETF Fee Example

• Purchasing a CFD on an S&P 500 ETF with a spread of 0.2% on a £1,000 position → £2 in fees.
• Holding the CFD for 5 days, with overnight fees of 0.01% per day → £0.50 in cumulative fees.

What are the ETF Investment Strategies?

ETFs offer numerous investment strategies suitable for different investor profiles. Depending on your objectives (growth, passive income, protection against volatility, etc.), some approaches will be more suitable than others.

Here is a summary table of the main ETF investment strategies:

What is the Taxation on ETF Income in the United Kingdom?

In the United Kingdom, Exchange-Traded Funds (ETFs) are subject to taxation based on the type of account in which they are held and the nature of the income they generate. Below is a detailed overview of how ETF income is taxed in the UK.​

1. Taxation of ETFs Held in General Investment Accounts (GIAs)

When ETFs are held in a General Investment Account (GIA), investors may be liable for taxes on both capital gains and dividends.​

Capital Gains Tax (CGT)

Profits from selling ETF shares are subject to CGT if they exceed the annual exempt amount. As of the 2024/25 tax year, the CGT rates are:

• Basic rate taxpayers: 18%
• Higher and additional rate taxpayers: 24%​

Example

 If you realize a gain of £5,000 from selling ETF shares, and your annual CGT exemption is £3,000, you will pay CGT on £2,000 at the applicable rate.​

Dividend Income Tax

Dividends received from ETFs are subject to income tax after the £500 annual dividend allowance. The rates are:​

• Basic rate taxpayers: 8.75%
• Higher rate taxpayers: 33.75%
• Additional rate taxpayers: 39.35%​

Example

If you receive £1,500 in dividends from ETFs, £500 is tax-free, and the remaining £1,000 is taxed at your marginal rate.​

2. Taxation of ETFs Held in Individual Savings Accounts (ISAs)

ISAs offer a tax-efficient way to invest in ETFs. Within an ISA:​

• Capital gains: No CGT is payable on profits from selling ETF shares.
• Dividends: Dividend income is tax-free.​

While ISAs shield you from UK taxes, foreign withholding taxes on dividends may still apply and are not reclaimable.​

3. Taxation of ETFs Held in Self-Invested Personal Pensions (SIPPs)

SIPPs provide tax advantages for long-term retirement savings. Within a SIPP:​

• Capital gains: No CGT is payable on profits from selling ETF shares.
• Dividends: Dividend income is tax-free.​

Similar to ISAs, foreign withholding taxes may apply to dividends and are generally not reclaimable.​

4. Taxation of Foreign ETFs and Withholding Taxes

When investing in foreign ETFs, be aware of potential withholding taxes on dividends:​

• United States: Dividends are subject to a 15% withholding tax if you complete a W-8BEN form; otherwise, the rate is 30%.
• Other countries: Withholding tax rates vary and may not be reclaimable.​

Example

If you receive $1,000 in dividends from a U.S. ETF and have submitted a W-8BEN form, $150 will be withheld, and you will receive $850.

5. Taxation of Leveraged ETFs and CFDs

Gains from trading leveraged ETFs or Contracts for Difference (CFDs) are treated as capital gains and taxed accordingly:​

• Capital gains: Subject to CGT rates as outlined above.​

Example

 If you realize a gain of £3,000 from trading leveraged ETFs, and this exceeds your annual CGT exemption, the gain will be taxed at your applicable CGT rate.

Nishadh Mohammed

Nishadh Mohammed is a seasoned news editor and financial writer, working with HelloSafe since May 2023. Nishadh has developed expertise in financial markets, insurance, and investment products, with a deep understanding of the Canadian financial landscape. He has honed his SEO skills and content marketing strategies while writing for Canadian publishing houses. Armed with a master's in Business Analytics and extensive journalistic experience, Nishadh uniquely combines data proficiency and thorough research to deliver comprehensive and accessible information.