Commission-free trading changed what investors pay attention to, not what they pay. The disclosures tell a more interesting story than the advertising.
The headline number in UK retail trading has moved decisively in one direction over the past five years: commissions have collapsed toward zero. Platform after platform now advertises zero-commission share dealing, and the marketing reads as though the cost of trading has been solved.
The regulatory filings say otherwise. Analysis of FCA disclosures and the annual reports the major UK-regulated brokers publish themselves puts average revenue at roughly GBP 4,685 per active client per year. That figure has held broadly steady while advertised commissions fell. The revenue did not disappear. It moved into lines that are harder to see.
Where The Money Actually Goes
Four cost lines account for most of the gap between what a platform advertises and what a client’s account actually generates.
The spread at execution is the largest and least visible. It is quoted, when quoted at all, as a ‘from’ figure representing the best case in the deepest markets at the calmest moments. Real fills in fast markets routinely differ.
Foreign-exchange margin is the second. Retail FX margins on international share dealing range from a few tenths of a percent to around one and a half percent per conversion depending on the provider. An investor buying US equities monthly converts on every purchase, which means the conversion cost compounds in a way a single annual fee does not.
Custody and platform fees make up the third, calculated on different bases across providers, so that two identical portfolios can generate materially different charges. Administrative fees, the fourth, typically surface only in the annual statement.
The Scale Of The Loss On Leveraged Products
The picture is starker in contracts for difference. UK retail traders lose an estimated GBP 1 billion a year on CFDs, a figure derived from FCA data alongside the brokers’ own published disclosures. Every regulated CFD provider is required to state the percentage of retail accounts that lose money, and those disclosures cluster between roughly 70 and 80 percent.
That statistic is published prominently by law and, by all available evidence, read by almost nobody. It is one of the few places in retail finance where the industry is required to quantify the outcome for its own customers, which arguably makes it the most useful number a prospective trader can look at.
Why Comparison Is Harder Than It Looks
Comparing published fee schedules is better than not comparing, but it carries a structural limit: a schedule documents what a firm chooses to itemise, in units it chooses to present. This is why aggregated UK trading statistics drawn from regulatory filings rather than marketing pages have become a more reliable reference point than the pricing pages themselves. The FCA disclosures and audited annual reports are prepared to a standard the promotional material is not.
The difference matters most for the investors least likely to notice it. A trader placing occasional domestic trades will find the gap between platforms modest. One drip-feeding into international equities, or holding leveraged positions, can face annual costs several multiples of the advertised rate, without a single line of the marketing having been inaccurate.
The Practical Read
None of this argues that the cheapest platform is the right one, and it is not a recommendation toward or away from any provider. Service quality, market access, account types and an investor’s own trading behaviour all weigh into a sensible decision, and a platform that suits an active trader can be poor value for a long-term holder with the same balance.
The narrower point is simply that the numbers are measurable, they are larger than the headline rate implies, and they are published. An annual audit totalling every charge an account generated, including estimated spread and conversion costs rather than only the itemised fees, takes about an hour and is one of the few return inputs an investor fully controls.
