UK Investors: How to Minimise FX Costs When Buying US and Global Stocks

IBKR has the lowest FX spread (0.08-0.2%) of any mainstream broker available to UK investors. Trading 212 is the best among zero-commission neo-brokers at 0.15%. The traditional platforms (Hargreaves Lansdown, AJ Bell) charge 0.5-1% — competitive with banks but expensive vs the neo-brokers.

• IBKR Pro: 0.08% FX — ~£8 per £10,000. Best for large portfolios. Complex interface. ISA not available (IBKR has a GIA only for UK residents).
• Trading 212: 0.15% FX — ~£15 per £10,000. ISA wrapper available. Commission-free. Best for most UK investors wanting a simple, cheap ISA.
• Charles Schwab: 0.3% FX — ~£30 per £10,000. No UK ISA. Better research tools. For investors who value Schwab's US-focused platform.
• Hargreaves Lansdown: 1% FX — ~£100 per £10,000. ISA available. Best platform and service quality, but high FX cost.
• eToro: 1.5% FX — ~£150 per £10,000. All accounts USD-denominated. Copy trading feature unique.

Yes, for UK residents, a Stocks & Shares ISA is almost always the right wrapper for US and global stock investments. Within the £20,000 annual ISA allowance, all gains and dividends are tax-free — no Capital Gains Tax, no Income Tax on dividends.

Trading 212 and Hargreaves Lansdown both offer ISA accounts. IBKR UK does not offer an ISA product. If an ISA is important to you (it should be, up to the £20k limit), Trading 212 at 0.15% FX is the best combination of low FX cost and ISA wrapper.

Trading 212 charges a 0.15% currency conversion fee when buying USD-denominated assets in a GBP account. This is applied once per transaction — not annually. If you buy and hold a US ETF for 10 years, you pay 0.15% once on purchase and 0.15% once on sale.

The alternative: hold a USD balance in Trading 212 and convert GBP to USD in one batch transaction, then buy multiple US stocks using that USD balance. This minimises conversion events and is efficient if you're making multiple trades in the same currency.

Trading 212's ISA has no platform fee and no annual management charge. The 0.15% FX conversion and Trading 212's own bid-ask spread on the underlying asset are the only costs. For passive investors buying US index ETFs (CSPX, VUAG, VUSA), this is an extremely competitive setup.

eToro charges 1.5% on currency conversion because all accounts are USD-denominated. A UK investor depositing £10,000 immediately loses £150 before buying anything. On a passive index investor putting £10,000/year into US stocks:

• FX cost at eToro: £150/year × 20 years = £3,000 in direct FX costs.
• Compounding effect: that £3,000 invested instead at 8%/year = £7,000+ foregone growth.
• vs Trading 212: £15/year × 20 years = £300 direct + ~£700 compounding = £1,000 total.
• Difference: ~£9,000 over 20 years from FX costs alone.

eToro's copy trading feature is genuinely unique and valuable for some investors. If that's the reason you use it, the FX cost is a known tradeoff. For passive investing, it's not the right tool.

1. Under £20k/year investing: Open a Trading 212 ISA. 0.15% FX, no platform fee, ISA tax wrapper. Start here.
2. Over £20k/year: Use Trading 212 ISA for the first £20k, then IBKR GIA for the remainder. 0.08% FX on the IBKR portion.
3. Large existing portfolio (£100k+): Consider IBKR for the primary account. The 0.08% vs 0.15% spread matters at scale.
4. Don't use eToro for passive investing. The 1.5% FX cost compounds badly over time.
5. **Review Hargreaves Lansdown only for SIPP/ISA + superior service, knowing the 1% FX cost.