Choosing an online trading platform to manage your investment portfolio is a critical step. Without confidence in your chosen platform or the right facilities, it’s not going to end well. You’ll be less enthusiastic to put time, effort, and most importantly, money, into your investment account to either trade in and out of positions, or to invest sensibly for the long-term.

To get you on the right track here, this article covers in detail what to look for when picking an online trading platform. This way it’s something that you only have to do once and is not repeated.

Desktop or Mobile Access, or Both?

An online trading platform needs to be modern and easy to access. Some people still prefer to manage their trades and to access their investment using a desktop PC with a large widescreen display. This way they can review their spreadsheets and use a complicated piece of software to trade from.

For others, they are desirous of a platform that at least offers mobile trading access. In some cases, they prefer to not need a desktop PC at all and don’t want a company distracted by offering trading services from PC, Mac, and mobile devices too. The best trading platforms will offer mobile trading, however, they’re all different from each other and not all trading apps are easy to use.

In the case of WealthSimple, they only offer trading products. They keep it simple and this has helped them achieve great ratings. This guide to the best trading platforms Canada is one of the many useful resources on their site. Their dedication to providing market access, responsive trading interfaces, and without the distraction of providing desktop access is clearly working for them.

Trading Costs and Other Fees

What does it cost to buy some shares of a stock, pick up a few shares of an ETF, or to acquire a mutual fund?

Are there setup fees, ongoing costs, or different confusing fee structures for many different brokerage transactions that makes it confusing what everything will cost you?

These are certainly some of the very real concerns that investors have. Some platforms have lower fees, so it’s easier to set up a portfolio of investments for the long-term and hold it for years without losing thousands to do so. These cost savings can compound up as they can be included in your initial investment rather than going into the brokerage’s pockets to benefit their shareholders.

How Accessible Are They?

What sort of downtime history does the platform have? Has it had repeated technical issues where people couldn’t log in and trade? Could they log in, see market news but weren’t able to execute buy and sell orders during trading hours due to a technical fault?

If their customers use a mobile app, what are their app reviews like? If they offer a desktop service, or usage through a web browser, are there Google reviews about their platform which are relevant to the decision?

Also, consider usability too. Is the platform or app easy to use? Is it intuitive or forever confusing to use? This may be already reflected in some of the reviews. If the site or app is used or installed before creating an account or has a demo mode, what’s it like to play around with?

Furthermore, see if there are video run-throughs of their site or app on YouTube. Search Google to find them. Usually, they’ll be on the broker’s YouTube channel. It will help clarify what to expect when you’ve signed up and whether you’ll be happy with their interface and won’t get lost in confusion.

What About the Account Minimums?

The account minimum is what money is required as an initial deposit to open the account.

Some brokers have no minimum. Other brokers have higher minimums from a few hundred to several thousand.

For major investors, the minimums are not a concern. However, for people just getting started, it’s a hurdle to overcome which keeps them out of the market even after they’ve committed to getting going.

It’s important to be aware that some brokers have account minimums because their transaction cost may be set as a percentage of the transaction size, rather than either fixed cost or free. Therefore, it’s in their interest to encourage larger transaction sizes because it benefits them.

What Does the Broker Allow Trading In?

Not all brokerage accounts offer the same types of trading. Here are a few worth considering:

Company Stocks

What company stocks can you purchase? Ones from Canada, the US, the UK, Europe, or Asia?

Even when country access is provided, only some of the listed companies may be tradeable. It depends on the platform and what they’re set up to offer. Also, higher-level accounts may provide greater access to international markets compared to lower-level accounts, which is something to watch out for if you’re wanting to trade internationally.

IPOs

Can you access IPOs early or are you unlikely to purchase newly listed companies until their price has already spiked up?

For people interested in startups and faster growth companies, this access is a priority.

ETFs/ETNs

Can you trade the ETNs and ETFs that are available? Is it a restrictive list or an extensive one?

Also, what does it cost to trade them compared to stocks, mutual funds, and other investment types at the brokerage?

Mutual Funds

Mutual funds vary in price considerably. There are some affordable ones in the U.S., but the Canadian mutual funds are often still awfully expensive.

Some trading platforms charge fees to invest in mutual funds which add to the expensive ratio chargeable per year by the fund. This may apply even with so-called no-fee mutual funds too.

Bonds

Bonds may be tradeable via Bond ETFs or ETNs, or listed investment trust that holds bonds, but not necessarily the individual bonds themselves.

If you’re wanting to create a bond ladder, then purchasing individual bonds covering multiple years of maturity is highly beneficial. Without being able to purchase individual bonds, that makes it harder to accomplish.

Options

Can options be traded from the account? Many investors are now using options either to profit from their use or as a protection strategy to limit their downside risk without needing to sell existing investments to de-risk their portfolio. Without options being tradable from a platform, this strategy is taken off the table.

Customer Service

The level of customer service provided by the trading platform can be a deciding factor if you’ve received poor assistance in the past. This can even be more important than the cost of trading or the ease of use of the platform in some cases.

If this matters more to you, then it’s possible to test the customer service team by firing off an email or two with some detailed trading or platform queries. See how they respond to the questions. Do they fall into the usual trap of remembering to answer the first question in the email but forgetting to answer the second, even if you numbered them? Did they provide a detailed answer that gives you confidence or did they fall short?

Also, how long did each response require during regular trading hours? Is the support 24 hours and how does it compare out of hours?

What’s the Resources or Research Center Like?

Most trading platforms provide extensive resources to help traders and long-term investors alike figure out what they wish to invest in.

These resources include stock price checks, historic data, charting, and information on potential investments that helps fill in the blanks.

Is the information based around stocks alone, or does it include individual bonds, bond mutual funds or ETFs, options, and other exotics?

Support for Tax-Efficient or Retirement Planning

Depending on where you’re located, it’s possible that using a structure to protect investments from taxation is preferred. These vary from country to country. Trading platforms should have a range of accounts that can be opened some of which fall into this category to allow investors to limit their exposure to tax on investments.

Retirement planning is also useful. It overlaps into retirement accounts and the administration of them. While some investors may only want to invest outside of such schemes, if you want to protect your investments by taking advantage of tax-efficient investing, then the trading platform needs to cater to that too.

Trading platforms have a lot to live up to. As you can tell there are many different aspects to what you may want to get out of a platform. Whether trading costs are the most important factor or you’re more concerned with access to certain markets or how well questions are answered, is a personal matter. Also, what you need from a given platform may differ over the years too. So, don’t only look at one thing and discount all the others. What you want is a well-rounded partner for your investments that offers enough of the features that you’ll appreciate now and in the future to not have to switch platforms later.