How to Choose Between Online Brokers vs. Stock Trading Apps vs. Robo-advisors and Micro-investing

Understanding these investment platforms will help make investing better for you.

These platforms have revolutionized how people trade, manage portfolios, and navigate the world of investing.

But which platform will suit your investing style?

We created this guide to help you choose the best investment platform.

Online Brokers vs Stock Trading Apps vs Robo-Advisors vs Micro-Investing Services

Which Investment Platform is Right for You?

When choosing between online brokers, stock trading apps, robo-advisors, and micro-investing services, the best choice depends on your investment strategy and level of involvement.

1. Go for an online broker if you want a hands-on approach and access to a variety of investment products.
2. Opt for a stock trading app if you’re a beginner, prefer mobile trading, and want low-cost, simple options.
3. Choose a robo-advisor if you prefer a hands-off, low-cost investment solution with automatic portfolio management.
4. Consider a micro-investing service if you’re new to investing, prefer automation, and want to start with small amounts of money and minimal effort.

Still unsure? To help you decide which investment platform is best, continue reading.

1. What are Online Brokers?

Online brokers are digital platforms that allow you to buy and sell securities, such as stocks, bonds, ETFs, and mutual funds, without a traditional stockbroker.

How Online Brokers Work

Online brokers offer a self-service model where investors place orders directly on the platform. Many offer research tools, real-time data, and educational resources to help investors make informed decisions. Some platforms also provide more advanced features like margin trading and options trading.

Best For

Investors looking for a more hands-on approach to investing and want access to a broad range of investment products.

Find the best online brokerages →

2. What are Stock Trading Apps?

Stock trading apps are mobile-first platforms designed for simplicity and ease of use.

How Stock Trading Apps Work

Like online brokers, stock trading apps enable you to buy and sell shares, track market performance, and access educational resources. However, they typically offer a more streamlined, user-friendly experience with features optimized for mobile use.

Best For

Beginners or investors who prioritize ease of use and want to trade on the go. They’re also great for those who prefer lower fees or commission-free trades.

Find the best stock trading apps →

3. What are Robo-Advisors?

Robo-advisors use algorithms and artificial intelligence to make decisions about your investments, often with little to no human intervention.

How Robo-Advisors Work

After setting up an account and answering a few questions about your financial goals, a robo-advisor automatically allocates your money into a diversified portfolio, typically low-cost ETFs. The platform then rebalances your portfolio periodically to ensure it stays aligned with your investment objectives.

Best For

Investors who prefer a hands-off approach and don’t have the time, expertise, or interest in actively managing their investments.

Find the best robo-advisors →

4. What are Micro-Investing Apps?

Micro-investing services are designed to make investing accessible to everyone, regardless of how much capital they have to invest.

How Micro-Investing Apps Work

Micro-investing platforms use an automated approach to investing. Most services allow users to link their credit or debit cards, and when a purchase is made, the app rounds up the total amount to the nearest dollar, which is then invested. Some also allow users to make recurring investments, set specific savings goals, or invest in individual stocks.

Best For

Ideal for new investors who want an easy entry into investing and looking to start with minimal amounts.

Find the best micro-investing platforms →

Pros and Cons

Key Considerations to Help You Choose

• Fees: Always check for commission fees, account maintenance fees, and any other charges associated with the platform.
• Investment Goals: Consider whether you want to manage your investments or prefer a hands-off approach actively.
• User Experience: Stock trading apps are perfect if you like to trade on the go. On the other hand, online brokers tend to offer more comprehensive tools, making them more suitable for investors who want detailed analytics and research.
• Security: Online brokers, robo-advisories, stock trading apps, and micro-investing services must be registered with the SEC.

Next Steps:

• 👉 Read: How to Choose Your Investment Approach →
• 👉 Learn: Investing Basics →
• 👉 Explore: Best Investment Apps in the financial marketplace →